BIS: Interlinking Fast Payment Systems Could Enhance Cross-Border Payments

Interlinking fast payments systems (FPS) across different jurisdictions could enhance cross-border payments, making them low cost, fast, easy to access and transparent, the Bank for International Settlements (BIS) said Tuesday (Oct. 15).

The organization said this in a press release announcing the BIS Committee on Payments and Market Infrastructures’ (CPMI) publication of two reports offering insights into facilitating the interlinking and interoperability of payments systems.

“Opportunities to foster cross-border FPS interlinking have grown with the proliferation of FPS globally and with trends towards greater interoperability at the technical level,” the release said of the report on the linking of fast payment systems. “The growing use of application programming interfaces (APIs) and the adoption of the ISO 20022 financial messaging standard have opened up new possibilities to facilitate payment system interlinking.”

The report, “Linking fast payment systems across borders: governance and oversight,” suggests ways to develop workable governance and oversight arrangements, per the release.

The CPMI’s second report, “Promoting the harmonisation of application programming interfaces to enhance cross-border payments: recommendations and toolkit,” focuses on the use of APIs.

“APIs are increasingly used throughout the global financial system for various payment functions, enhancing the efficiency of payment data exchange,” the release said. “However, API technical standards are currently fragmented, hindering the potential of APIs in cross-border payments and leading to increased time and expenses, as well as higher risks of errors.”

The report found that API standards can be moved in a more harmonized direction with facilitative processes, best practice design and international data standards, enhancements to the developer experience and a focus on pre-validation APIs, according to the release.

With the CPMI emphasizing that a key priority area for cross-border payments is payment system interoperability and extension, multinational buyers and suppliers across the global B2B marketplace are increasingly honing in on those innovation guideposts as well, PYMNTS reported in June.

Amid the proliferation of digital B2B payments and the impact they are sparking across evolving business models, system extension ensures that B2B payment platforms can integrate with emerging payment technologies and provide advanced features like real-time transaction tracking, automated B2B payment processing and enhanced security measures.