Cross-Border Payments In Focus: Global Fintech Fest 2023

In the dynamic arena of global finance, cross-border payments occupy a pivotal position, facilitating transactions that transcend geographical boundaries. Recently, a gathering of esteemed panelists converged on the stage of Global Fintech Fest 2023, illuminating the intricate world of cross-border payments. This discussion journeyed through the challenges, unveiled groundbreaking innovations, and explored the transformative potential that lies within this critical financial domain.

As the discussion unfolded, each panelist shared their invaluable expertise and experience in the field. H.E. Khaled Al Basias, Director Financial Sector Development, Saudi Central Bank, added depth to the conversation by highlighting the ongoing efforts of central banks to foster cross-border payment solutions.

However, it was Shahrokh Moinian, MD Head of Europe, Middle East and Africa (EMEA), J.P. Morgan, with his extensive knowledge, who first identified a critical pain point - the timeline of cross-border payments. The prolonged duration, ranging from 24 hours to several weeks, is a notable friction point. Transaction monitoring, driven by Financial Action Task Force (FATF) rules, presents a significant challenge due to the absence of standardised lists, leading to subjectivity, false hits, and delays. Fraud also poses a substantial hurdle, with bad actors exploiting various avenues to compromise transactions and funds, emphasising the need for enhanced security measures.

In contrast, Abhaya Prasad Hota, Consultant, SWIFT India Domestic Services, recognised as the architect of India's UPI system, offered a unique perspective. He advocated for global infrastructure and government collaboration, emphasising that the success of UPI in India could serve as a model for cross-border payments. While governments and central banks have made progress, the pace remains slow, requiring ongoing coordination.

Hota presented the concept of corridors, such as the one between India and Singapore, where existing systems and settlement mechanisms could be leveraged. This pragmatic approach could potentially unlock new avenues for efficient cross-border transactions.

The discussion painted a vivid picture of the challenges and opportunities within cross-border payments. From the timeline to interoperability and security, the road ahead is marked by innovation, regulatory collaboration, and the quest for seamless global transactions.