Retail payments' performance in relation to the set goals of the G20 cross-border roadmap for the year 2024.
Financial Stability Board Releases Update on G20 Cross-Border Payments Progress
The Financial Stability Board (FSB) has published its latest update on the G20 Roadmap for Enhancing Cross-Border Payments, highlighting progress made in various aspects but also underscoring the challenges that remain to meet the targets set for 2023 and 2027.
The annual report, which includes a consolidated progress report, reveals that while significant strides have been made in improving infrastructure and settlement system hours, the retail sector is yet to fully meet the G20 Roadmap targets. The Roadmap, established in 2020, aims to reduce retail cross-border payment costs to 1% or below, improve speed, expand access, and ensure transparency by 2027.
Progress has been noted in some areas. For instance, innovations like 24x7 real-time gross settlement (RTGS) systems, adopted or under consideration in several countries, have helped improve payment speed and availability, key constraints for cross-border P2P usage. European and UK initiatives on payment infrastructure upgrades and multi-currency instant settlement services also indicate meaningful technical progress.
However, challenges persist. Rising costs and slowing speeds have been observed in B2B & B2P cross-border payments. Interchange fees and costs remain a concern, with regulatory bodies actively investigating and proposing caps to reduce high fees on international card transactions. Transparency gains have been made, but PSP drop-out presents challenges.
The report also provides key performance indicators (KPIs) for the industry for the second year running. It evaluates the speed performance of P2P payments, identifies the most and least expensive regions for P2P payments in 2024, and determines regions with the biggest price changes. Region-level averages for each payment type are produced, providing a comprehensive overview of the retail payments sector's performance against the G20 targets.
Despite the progress, the FSB's data shows that performance against the G20 targets has declined across most metrics between 2023 and 2024. The global average payment speeds decreased in 2024, and rising costs have been observed in various payment types.
The retail section of the G2P Roadmap covers P2P money transfers, B2B payments for MSMEs, B2P payments, and P2B payments. An analysis of how close P2P payments are to the 2027 3% target has been conducted, revealing that while progress is being made, continued effort is required to achieve the 2023 and especially the 2027 targets.
Infrastructure enhancements, regulatory reform, and cross-jurisdictional collaboration remain crucial to reduce costs, increase speed, and broaden access for retail P2P cross-border payments within the G20 Roadmap framework. The FSB and G20 members have reaffirmed their commitment to fully and timely implement the Roadmap reforms, including addressing vulnerabilities and extending financial service usage among individuals and small businesses.
In conclusion, the FSB's annual reporting context shows that progress is being made but full achievement of the 2023 and especially the 2027 targets requires continued effort. The updates provide valuable insights into the current state of the retail cross-border payments industry and serve as a call to action for all stakeholders to collaborate and accelerate progress towards the G20 Roadmap goals.
The Financial Stability Board's (FSB) update reveals that while strides have been made in improving cross-border payment infrastructure, technology, and general-news regarding settlement system hours, the retail sector's progress falls short of meeting the G20 Roadmap targets for cost reduction, speed improvement, expanded access, and transparency by 2023 and 2027.
In the retail sector, the FSB's data shows declining performance against the G20 targets across most metrics between 2023 and 2024, with rising costs observed in various payment types and a decrease in global average payment speeds. The FSB emphasizes that continued efforts are required, particularly in technology advancements and regulatory reforms, to achieve the 2023 and 2027 targets. The report also underscores the importance of infrastructure enhancements, cross-jurisdictional collaboration, and broadening access to financial services, especially for small businesses, to fully achieve the G20 Roadmap goals.
