The future of payments will be shaped by a diverse ecosystem of players and technologies which promise to enhance the customer experience by adding more choice. At the same time the targets set by the G20 for cross-border payments are stimulating action, with banks, payment service providers and market infrastructures alike all progressing with initiatives to improve the speed and transparency of payments across borders.

As an industry, we talk a lot about the exciting opportunities presented by technological innovation and the resulting service enhancements, but we also need to understand what could be lost. Advocates of new networks and new digital forms of value argue that their introduction will solve many of the challenges our industry is facing. While this debate will rumble on, there can be no doubt that adding more layers to the ecosystem causes fragmentation – which can harm cross-border capital flows and could ultimately lead to increased funding costs and depressed lending.

A recent report from Economist Impact, commissioned by Swift (Growth at a Crossroads),¹ assessed the financial impact of fragmentation. It examined probable drivers and mapped out three potential scenarios and the potential impact by 2030. The scenarios quantify the effect financial fragmentation could have on global and national GDP and employment, ranging from a reduction in global GDP of 1.2% in a best-case scenario, to a worst-case scenario of 6% of GDP being wiped out by the end of the decade. That is the equivalent of US$6.5trn. What is more, in this scenario, 280 million fewer jobs will be created around the world, all because of a more fragmented financial ecosystem.

These findings should serve as a wake-up call for our industry. The reality is that nobody wins from fragmentation – it will impact countries, economies, businesses, and ultimately people’s lives. It’s critical that we understand the consequences and take measures to address it as we build and transition to the future financial ecosystem. Which of these scenarios will play out is still to be seen, but regardless, Swift’s goal remains to enable ongoing capital flow across the world through interoperability of technologies, giving the industry – and its end customers – the continued ability to securely and seamlessly transact with each other.

“Nobody wins from fragmentation – it will impact countries, economies, businesses, and people’s lives”
Heather Lee, Global Head of Payments Strategy, Swift

Standards are the basis for any form of interoperability, and in November 2025, cross-border payments will begin an exciting new era with the end of the co-existence period between MT and ISO 20022 standards, as the latter becomes the common language for payments worldwide. While Swift will continue to support the industry with the transition, improving the quality and richness of data in domestic and cross-border payments will help speed up the move towards greater integration of technologies across the entire payments space, improving efficiency and straight-through processing rates, as well as the effectiveness of financial crime detection.

Amid all this, we are working to ensure that traditional and digital ecosystems can interoperate. This work is vital: without it, we foresee digital islands that undo the hard work that has been put into ensuring that we have a seamless, secure and globally inclusive financial ecosystem.

Swift has been working with its members for some time on experiments that have successfully demonstrated that the network can be used for digital cross-border transactions, whether that is with digital assets, fiat currency, or interoperating the two. For instance, if a business in a country with a central bank digital currency wants to transact with a business in a country without one, they will still be able to do so using Swift. This year we have been taking these collaborative experiments out of the sandbox, starting controlled, live trials on the Swift network.

Adding new technologies and more forms of value to the global ecosystem opens exciting possibilities, but likely introduces more complexity to an already complex system. Swift was created to bring coherence to this complexity across currencies, systems and industries. We remain agnostic to technology, just as we are agnostic to currency or forms of value. How businesses and financial institutions decide to transact with each other is for them to decide. But however the future unfolds, Swift’s core mission will remain the same – to serve the financial community by enabling secure connectivity, reliability and efficiency at scale across the world.

Heather Lee is Global Head of Payments Strategy at Swift

Sources

¹ See swift.com