The need to link market infrastructures is a hot topic gaining a lot of traction, and panellists at the Sibos conference discussed this during the session ‘Payments systems interlinkages for cross-border payments: What’s the end game?’.
Evelien Witlox, global director payments at ING, explained that this is a hot topic because cross-border payments is an area that has the highest amount of friction in payments.
“The needs of the corporates are unchanged. Payment system interlinkages is about reach and being able to send your payment wherever it needs to go — not only the big corridors, but also the smaller ones too,” said Witlox.
Additionally, the need to link market infrastructures is about the speed of the payment and transparency. Witlox elaborated: “The transparency not only relates to where the payment is but also the cost involved too.”
Witlox added: “We have made important steps in the payment industry such as the rollout of instant payments. Although this is not yet fully completed, it is an important step that could reduce some of the friction in cross-border payments.”
Meanwhile, Russ Waterhouse, executive vice president product and strategy, The Clearing House, commented: “As real-time systems have come into play, they're really changing the dynamic in terms of how payments are made and really meeting the expectations of the customer and are changing society.”
From a US perspective, Waterhouse has observed an increasing trend for paying on demand. He added: “Request for payment is also enabling us to build pace and we're giving consumers and businesses the ability to manage their finances much more effectively.”
Panellists agreed there are a number of challenges in curating payments systems interlinkages such as regulation, standardisation and technology.
Witlox affirmed: “The regulator has an important job to do. There are different regulations in different jurisdictions, so if standardisation and harmonisation can be achieved then that will be an enormous relief on the complexity of the payment.”
