The Bank for International Settlements has published a BIS Paper reviewing cross-border payment technologies and policy work, concluding that retail cross-border payments and remittances remain materially less efficient than domestic payments and that innovation by private actors on its own is unlikely to overcome the main frictions. It argues that limited interoperability, rooted in two-sided market failures and cross-country institutional and regulatory differences, is the most binding constraint and requires proactive, coordinated public sector action. The paper differentiates wholesale cross-border payments, which are described as relatively low cost and fast, from retail and remittance flows, which are characterised as costly, slow, less accessible and less transparent. It notes that the global average cost to remit USD 200 is USD 12 and that transfers can take multiple days, with persistent reliance on correspondent banking, multiple intermediaries and complex compliance checks contributing to delays and opacity. While front-end providers and new back-end models are expanding, including interlinking fast payment systems and hub-and-spoke approaches, progress is presented as incremental and dependent on greater harmonisation of standards, more efficient compliance regimes and stronger governance and competition across jurisdictions; DLT-based approaches, DeFi and stablecoins are discussed as potential enablers but with significant preconditions and risks. On next steps, the paper situates the agenda within the G20 cross-border payments roadmap and describes ongoing public-private efforts to operationalise improvements. It highlights planned work to support adoption and harmonisation of ISO 20022 data requirements through end-2027, development of harmonised APIs including “confirmation of payee” solutions, and further guidance and monitoring on AML/CFT and legal, regulatory and supervisory issues by bodies including the Financial Action Task Force and the Financial Stability Board.
Bank for International Settlements 2026-03-11
Bank for International Settlements paper identifies limited interoperability as the key barrier to cheaper and faster cross-border payments
The Bank for International Settlements published a paper on inefficiencies in retail cross-border payments and remittances, citing limited interoperability as a key constraint. It calls for coordinated public sector action and outlines G20 efforts, including harmonising ISO 20022 data requirements and developing APIs. It also discusses potential enablers like distributed ledger technology, decentralized finance, and stablecoins, noting significant preconditions and risks.