Representational picture of a buyer paying via UPI
| Photo Credit: Okay.R. Deepak
India’s Unified Payments Interface system (UPI) stands out in advancing bilateral hyperlinks with different nations, together with Singapore and the United Arab Emirates, a U.S. treasury official stated.
In a speech at Harvard Law School on Wednesday, Jay Shambaugh, Under Secretary of US Treasury for International Affairs, spoke on new applied sciences and cross-border funds. He stated a set of ASEAN nations have the larger ambition of interlinking their quick fee programs multilaterally.
Mr. Shambaugh stated a number of initiatives are already underway to improve legacy fee programs.
He stated fee service suppliers, system operators, banks, and FMIs are investing in operational enhancements to make their programs quicker, cheaper, extra clear, extra accessible, and extra environment friendly for particular person or monetary sector customers.
“For example, institutions around the world are presently at different stages of implementing the ISO 20022 messaging standard. This standard is more data-rich than its precursors and facilitates straight-through payment processing with faster messaging, lower payment failure rates, and other advantages,” Mr. Shambaugh added.
“Some jurisdictions with strong bilateral economic relationships are going further and interlinking their fast payment systems. India stands out as a jurisdiction advancing bilateral links between its Unified Payments Interface system and those of other countries, including Singapore and the United Arab Emirates,” he stated.
A set of ASEAN nations have the larger ambition of interlinking quick fee programs multilaterally. In each contexts, the ‘G20 Payments Roadmap’ has channelled efforts towards alternatives for tangible, near-term progress, Shambaugh stated.
He identified that one of many three precedence motion areas of this G20 roadmap is “payment system interoperability and extension” which ensures the facilitation of “higher fee system connectivity and operational alignment alongside key corridors”.
“When achieved, this enables the instant transfer and settlement of payments across systems. And monitoring efforts under the G20 Roadmap show that upgrades to legacy systems, including those that predate the G20’s payments work, have already begun to deliver positive results,” he stated.
Mr. Shambaugh stated in parallel, jurisdictions are additionally exploring future states of cash and funds, together with experiments with cross-border CBDCs and DLT-based funds.
“In theory, new technologies in this space present the opportunity of a fresh start for payment systems, although the reality may be more complex. In an idealised vision, we could use these technologies to design cross-border payment systems with all of the beneficial features of legacy systems, plus some additional features that legacy systems do not provide,” he added.
“These additional features might include transparency of costs and institutions in the payment chain; atomic, instantaneous settlement; and programmable payments. Together, these functionalities could help achieve our two core goals of increasing efficiency while reducing risk,” stated the US treasury official.
