The European Central Bank has published Working Paper No 3202 estimating the economic impact of interlinking payment systems across countries, finding that trade between countries with directly connected fast payment systems is around 4% higher than between non-linked pairs, even after accounting for existing access to correspondent banking. The analysis uses a new dataset mapping more than 2,000 interlinking connections alongside annual bilateral trade data for 2021-2024, applying gravity-model methods and additional parametric and semi-parametric estimators to support a causal interpretation. The estimated uplift is described as roughly half the effect of a trade agreement and about a quarter of the effect of a common currency area, with larger gains where links allow wholesale transactions, connect smaller economies and operate in regions with higher cross-border payment costs, pointing to reductions in transaction fees as a key channel. The paper situates the findings within the G20 cross-border payments roadmap and ongoing initiatives involving the Eurosystem’s TARGET Instant Payment Settlement service.
European Central Bank 2026-03-23
European Central Bank working paper estimates interlinked fast payment systems lift bilateral trade by about 4%
The European Central Bank's Working Paper No 3202 estimates that interlinking payment systems across countries boosts trade by approximately 4% compared to non-linked pairs. Using data from 2021-2024, the study highlights that the trade uplift is significant, especially in regions with high cross-border payment costs, and is comparable to half the effect of a trade agreement. The findings align with the G20 cross-border payments roadmap and the Eurosystem’s TARGET Instant Payment Settlement service initiatives.