The pilot is being conducted in partnership with the central banks of Denmark and Sweden, using the TARGET Instant Payment Settlement (TIPS) platform, according to a Monday (June 1) news release.
“Participation in the pilot represents a key milestone in Mastercard’s strategy to build direct connectivity to payment infrastructures and demonstrates how instant cross-border payments can be executed and settled instantly at infrastructure level,” the release said.
Mastercard’s money movement platform, Mastercard Move, was one of the first participants to process transactions using the cross-currency pilot functionality. Payments were settled atomically between euros and Danish kroner, which means “both currency legs” were completed simultaneously to help lessen settlement risk, according to the release.
The pilot shows banks and FinTechs a more efficient way to deliver cross-border payments. Mastercard’s involvement demonstrates to governments and central banks that “regulated non-bank payment service providers can operate safely and effectively at infrastructure level,” aligned with regulations, the release said.
“This pilot shows how cross-border payments can begin to match the speed, certainty and transparency of domestic payments,” Pratik Khowala, global head of transfer solutions at Mastercard, said in the release. “It points to a new model where payments can move across borders and currencies with fewer intermediaries and greater predictability. For Mastercard Move, this is a critical step in building direct connectivity to payment infrastructures that our bank, FinTech and public sector partners can rely on. It also sets a clear path forward as we expand to additional schemes, currencies and corridors.”
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Meanwhile, there are benefits to using federated data platforms amid increasing compliance challenges, PYMNTS reported May 4.
CFOs face a paradox. Centralizing their financial operations could make it harder to stay compliant, but decentralizing teams and data could make it tougher to maintain visibility and control.
Federated data platforms can help them reconcile that tension.
“Instead of centralizing all financial data into a single global warehouse, these systems allow data to remain in local jurisdictions while still being queried, analyzed and governed as part of a unified layer,” the report said. “However, federated data solutions are not a silver bullet. They address only a very specific layer of the cross-border problem, the one surrounding data fragmentation and governance, and not the underlying payment rails behind many longstanding cross-border frictions.”
