In November 2020, G20 members endorsed the Roadmap for Enhancing Cross-border Payments. It sets quantitative targets to lower costs, increase speed and improve the accessibility and transparency of international payments by the end of 2027. In a white paper published in September 2024, flow outlined the main drivers and key initiatives under the umbrella of the Roadmap.

But what has happened since then and what’s the ECB’s view on the rate of progress?

On 21 February 2025, flow’s Desirée Buchholz and Paula Roels, Head of Swift & Industry Engagements at Corporate Bank Deutsche Bank, met Ulrich Bindseil, Director General for Market Infrastructures and Payments at the ECB’s Frankfurt headquarters to discuss how the Roadmap’s work is organised in practice, why consistent ISO20022 implementation is key and how instant payment systems could be a gamechanger.

Ulrich, cross-border payments have been a challenge for end consumers, companies, and payment service providers (PSPs) for a long time. Why was the Roadmap introduced in 2020 and not earlier?

Actually, cross-border payments were at the top of our minds well before 2020. For example, the Committee on Payments and Market Infrastructures (CPMI), which is part of the Bank of International Settlements (BIS) issued General Principles on International Remittance Services together with the World Bank as early as 2007¹. These principles cover transparency and consumer protection, payment systems infrastructure, legal framework, competition, and governance and their implementation has been the starting point of efforts to reduce remittance costs.

“Libra served as a ‘wake-up call’ to central banks and policy makers”

New for 2020 was that all the earlier initiatives were incorporated into one comprehensive roadmap, with clear deliverables and responsibilities. From my point of view, there are three reasons why this was done that year:

• Firstly, cross-border payment volumes were growing faster than global GDP and continue to do so, driven by cross-border trade flows and labour migration. Therefore, the total welfare cost of inefficiency in cross-border payments had increased;
• Secondly, there was frustration that the spectacular drop in IT and telecommunication costs did not show up in decreasing fees for cross-border payments. So, it was clear that some public action was needed, including in areas under the responsibility of regulators, such as anti-money laundering (AML) and combating the financing of terrorism (CFT):
• Finally, the memorable announcement by Facebook in June 2019 that it intended to launch Libra – a multicurrency stablecoin for general cross-border payments served as a ‘wake-up call’ to central banks and policy makers².

Let’s look at the engine room: how is the G20 work organised in practice?

The Roadmap builds on a three-stage process. The first stage was about identifying the challenges and frictions in cross-border payments and concluded in April 2020. Stage 2 then described the elements of a response, setting out 19 building blocks. In Stage 3 the actual Roadmap was endorsed in October 2020 and further refined in February 2023. The current Roadmap has 15 priority actions. Since 2023, we are also monitoring the measures taken and the progress on speed, transparency, cost, and accessibility of cross-border payments.

The Financial Stability Board (FSB), in close cooperation with the CPMI coordinated the work. The FSB is the overall lead organisation of the G20 work. Originally, it was set up after the global financial crisis in 2008–09 to promote international financial stability. Different from the CPMI – which is the second key player in driving the roadmap – the FSB also includes non-central bank authorities such as Finance Ministries. Other key international organisations involved are the Financial Action Task Force (FATF), the International Monetary Fund (IMF) and the World Bank.

You are the Chair of the CPMI’s payments interoperability and extension task force (PIE). Could you describe its key purpose and how it relates to the overall G20 work?

The idea of the PIE task force is to strengthen the collaboration between the public and private sectors to improve cross-border payments, as so far this work has been led by public authorities. The latter set the legal, regulatory and compliance framework – and the high costs and slow speed of cross-border payments are, in fairness, partly due to the complexity of compliance with various rules across jurisdictions. It is for governments, regulators and supervisory bodies to ensure not only the effectiveness, but also the feasibility and efficiency of compliance. The second function of the public sector in cross-border payments is that it runs real-time gross settlement (RTGS) systems, and sometimes, like the Eurosystem, fast payment systems. But all the other tasks in cross-border payments are performed by commercial banks and non-bank payment service providers (PSPs).

Hence the PIE taskforce: To facilitate regular collaboration between the public and private sectors and translate theory into action. It’s about getting the view and expertise of the private sector, and finding ways to incentivise the private sector to make cross-border payments faster, cheaper, more transparent, and more accessible.

The task force is organised in four teams. In early February, one of them published a report showing that several market infrastructures need to ramp up their work to align with the CPMI harmonised data requirements for ISO 20022 messages. Why is this alignment so important?

In payments, it’s not money that moves, but messages that are exchanged that then trigger changes in positions and ledgers. Messaging is therefore key to the improvement of cross-border payments. The ISO 20022 messages are richer in terms of data fields and therefore – if used properly – allow for straight through processing of global payments.

But deploying its benefits requires two steps: first, technical migration to the new format; second, its actual use with all relevant fields consistently populated and following agreed market practices. Currently, we can still see an inconsistent implementation of ISO 20022, and this undermines some of its benefits for cross-border payments.

How can the CPMI support market infrastructures to improve a consistent implementation of ISO 20022? And what’s the role of the report?

In 2022, the CPMI and the private sector's global Payments Market Practice Group (PMPG) agreed on harmonised data requirements for ISO 20022 messages in cross-border payments. These data requirements establish a consistent minimum set of data to be used throughout a cross-border payment transaction – but require widespread adoption.

Therefore, the work of this PIE task team led by Paula Roels from Deutsche Bank is crucial. The report, that was published on the CPMI website, outlines the necessary steps for each jurisdiction to align with the data requirements, covering nearly 50 payment systems worldwide.

I can assure you that the report was praised consistently in the PIE task force and in the CPMI as an outstanding piece of work. And I share this view. What makes it particularly valuable is the granularity with which it reviews ISO 20022 implementation across jurisdictions and the specific recommendations it has for each. Most cross-border payments reports take an aggregate approach – but with this report each community can really see where it needs to get better. This level of transparency supports momentum for improving alignment.

Ulrich Bindseil, Director General for Market Infrastructures and Payments at the Frankfurt headquarters of the ECB; photo by Desirée Buchholz

Another task team within the PIE taskforce focuses on challenges around payment system access, extending operating hours of real-time gross settlement systems (RTGS) and mitigating FX settlement risk. What can you share from this task team so far?

As you have rightly pointed out, that team has a large remit.

1. In terms of access to payment systems, it is widely acknowledged that granting non-bank PSPs direct access to payments systems enables them to offer faster and cheaper payments to consumers. Yet, there are concerns about expanding payment system access, as non-bank PSPs are not as strictly regulated as banks and regulation varies across jurisdictions. In this task force, banks and non-bank PSPs work together to make recommendations on expanding access.

2. The earlier work of the G20 roadmap also analysed how extended RTGS operating hours could enable wholesale payments to go around the world in a time window where all RTGS are open. Limited or misaligned operating hours can delay payment processing. Yet, the task team found that market participants consider operating hours is less of an issue. Leading central banks, such as the Bank of England³ and the Federal Reserve⁴, are currently also consulting market participants on extended operating hours. We, as the ECB, have extended operating hours when T2 went live last year, and we will also launch further analysis of this topic.⁵

3. Finally, the group looks at access to currencies: In recent years, the proportion of FX trades that are not settled on a Payment-versus-payment (PvP) basis, i.e. simultaneously and without settlement risk, have increased. This was driven primarily by the growing importance of emerging market currencies, which are not covered by continuous linked settlement (CLS). The task force discusses also other methods beyond PvP to mitigate FX settlement risk.

In addition, there is a task team that looks at fast payment systems (FPSs). For example, it addresses the question of how domestic and regional instant payment systems can be interlinked. Could you share three key recommendations that the team has developed to enhance interlinking?

The beauty of FPS is not only that they are fast, but also that they operate 24/7. Therefore, they have no issue with an insufficient overlap of operating hours like RTGS systems may have. But of course, you need some form of linking between the systems.

1. One of the task team recommendations is that FPS operators should always foresee so-called one-leg out (OLO) schemes. In principle, these are message formats which cover the cross-border dimension. Ideally, these OLO schemes are naturally deployed to all current participants and do not require new onboarding.

“Instant payments are gradually moving into the corporate space”

2. Another recommendation is that interoperability should be promoted through common standards, such as an effective ISO 20022 use. In fact, the work for global market practices that has been done for RGTS now needs to be replicated for FPS. And it has already been started with the relaunch of the Instant Payments plus group, chaired by the ECB’s Jean Clement.

3. Moreover, the group has asked regulatory authorities to prioritise the harmonisation of AML and sanctions screening requirements so that the private sector can screen payments more efficiently. Any manual intervention is an impediment when it comes to faster payments, adding to the cost and time of processing.

On the back of that remark, do you expect FPS to replace RTGS in the long run – given that FPS would solve many shortcomings of RTGS such as limited operating hours and lack of speed?

We are seeing a clear evolution here. So far, instant payments have been more associated with consumer payments – also due to amount thresholds. But with the EU Instant Payment Regulation – obliging PSPs to be able to receive and send instant payments at the same costs as a SEPA credit transfer – and amount limits being removed, instant payments are also gradually moving into the corporate space. So, volume shares might change over time, but both FPS and RTGS complement each other very well.

There are no talks to replace RTGS – for good reasons. Banks typically have their liquidity in the RTGS system and put some money on a technical account for instant payments. If we moved everything to instant payments, the architecture of liquidity pools would need to be changed.

Fraud prevention has also been addressed by the second task team of the PIE task force. Would you share some details here?

Yes, of course. Cross-border payment arrangements that are not governed by a single scheme provider – like in the case of global card networks – have a different risk profile. With fast payments, the money is gone once you push the button. As limits on instant payment amounts are being removed, the issue of fraud prevention has become even more important. Therefore, the second report of the task team offers recommendations for both the private and public sectors. These include enhancing data visibility and sharing mechanisms, implementing robust pre-validation processes, encouraging the use of digital identities, and investing in financial education. In other words, adopting measures that have worked in the cards world also work for instant payments.

Let’s go back to the big picture: The roadmap sets quantitative targets for 2027. For example, 75% of cross-border wholesale payments should be credited within one hour of initiation, the rest within one business day – to name just one target. Will they be reached?

The targets were set to be ambitious and to initiate a process. So even though it looks as if not all the targets will be met in time, I remain convinced that setting them was necessary to further improve cross-border payments.

Moreover, it must be acknowledged that when the targets were set, we did not have the quality and granularity of data on cross-border payments which we have now.

For example, you mentioned the speed of wholesale payments. The goal of 75% within an hour will easily be reached as far as the payment network between banks is concerned. But we learned that the real challenge lies in the so-called “last mile”; that is the crediting of the ultimate client account to allow the usage of the funds, after the bank has received the funds through an interbank payment. This delay can also be due to domestic regulations. So, the industry and authorities need to focus also on that last mile to further speed up cross-border payments through correspondent banking.

Another reason for slower progress than expected is the geopolitical situation. Cross-border payments rely on international cooperation, and this is not really what we see improving these days. Yet, it makes the work of the G20 even more important.

“I believe we should be more granular in the reporting on progress, showing data at country level”

The FSB publishes annual reports that tracks key performance indicators (KPIs) on cost, speed, transparency, and access. Looking at the 2024 report, which was published in October,⁶ what are the positive developments you would like to highlight and where do you see more progress needs to happen?

Overall, the report shows that it will take time for the actions outlined in the Roadmap to materialise and for industry participants to adapt, ultimately leading to noticeable improvements for end-users of cross-border payments.

Having said that there are some positive developments:

• Processing time of wholesale payments improved across almost all regions.
• Improvements in retail payment access were observed in the Asia Pacific region and transparency on cost and speed improved across all use cases.
• Digital remittance costs are significantly lower than those of cash remittances and offer potential to approach the 3% target.

What needs to be in done in the next two years to come closer to the targets?

We need to intensify implementation efforts at the jurisdiction, system, and stakeholder levels, including private sector parties. Both private and public payment sector infrastructure operators can enhance the payment rails, while PSPs must deliver services to end users on those rails. In particular, ISO 20022 adoption needs to be pushed further, and FPS interlinking should be implemented for additional currency pairs or multilateral links.

And what are the key lessons after five years?

Good things take time, and this is especially true in payments. This should not be an excuse, though; we need to stay focused and push the agenda forward. The ability to send money abroad safely and efficiently can determine whether or not a migrant worker's parents can visit a doctor, and if their children can attend school.

I believe we were good in identifying and analysing key cross-border payment issues and publishing recommendations. But translating analysis into action is now even more important, and if we turn the clock back to 2020, we could have pushed for that at an even earlier stage.

I also believe we should be more granular in the reporting on progress, showing data at country level, just as it is in the ISO 20022 adoption report prepared under Paula’s lead. Showing granular data is an important catalyst for action, and I think all jurisdictions have some areas to work on. Nobody is perfect and nobody should feel that there is anything to hide.

On a positive note, cross-border payments are still a G20 priority, despite a pandemic and major geopolitical challenges since the inception of the work in 2020.

The Roadmap is not backed by regulatory or legal mandates; instead, adherence is advisory. Will this remain the case or change going forward?

This is very jurisdiction-specific, and I cannot speak for other regions. In Europe, we work on interlinking the Eurosystem fast payment system TIPS with several other currencies, and the Instant Payment Regulation will ensure the widespread adoption of fast payments.⁷ Also, the Settlement Finality Directive (SFD) was changed to allow access for non-bank PSPs.⁸ So, it is up to the jurisdictions to take the findings to their level and to regulate. This is an adoption principle that also works in other fields of standard setting.

Sources

¹ See worldbank.org
² See cnbc.com
³ See bankofengland.co.uk
⁴ See federalregister.gov
⁵ See ecb.europa.eu
⁶ See fsb.org
⁷ See ecb.europa.eu
⁸ See ecb.europa.eu