EBAday 2025: G20 2027 target a turning point, not a finish line

Finextra

2 days ago

Last year, the newest progress report on the G20 roadmap for enhancing cross-border payments was released by the Financial Stability Board. Discussing the challenges and optimism since, a panel of payment experts at EBAday provided their insights into the obstacles of interoperability and cohesion.
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The panel, moderated by Sulabh Agarwal, managing director - global payments, Accenture was made up of Ainsley Ward, vice president, payments consulting services, CGI; Karyna Hutarovich, vice president, chief product office, Deutsche Bank; Katja Lehr, managing director, EMEA payments and commerce, JPMorgan Chase & Co; Marianne Demarchi, chief executive Europe, Middle East and Africa, SWIFT; and Sara Amara, head of currency and clearing, HSBC.
Agarwal began by posing a Slido question to the audience: What are the challenges in cross-border payments that we want to solve as an industry? In response, the vast majority said interoperability, followed by cost transparency and speed. Tying nicely into the G20's objectives, the panel then began to share their opinions on these exact issues.
Cohesion over innovation
Sara Amara described how there has been a misunderstanding surrounding the way to solve these fundamental problems, stating that 'the challenge of CBP is not lack of innovation, it's lack of cohesion,' and described it as 'too slow, too expensive [and] too exclusionary.' As an example of the current problematic process, Amara explained that it had been easier and cheaper for her to fly back to her home country, deposit cash and fly back. Calling the G20 a north star for transparent payments, Amara reiterated that the solution is not 'tactical, it's structural [...] think about how we're operating, we're operating through fragmented infrastructure.'
Karyna Hutarovic later echoed these thoughts, optimistic in her listing of some of the progress and success achieved, but believing that there is a real issue of consistency across countries and companies. She stated: 'I believe it's great that we all move to the same standards in name, we also need to make sure it's the same in practice. Because ISO 20022 can come in various flavours, if you will. So we need to make sure it's implemented consistently along the entire payment chain.'
The last mile
Following up on the issue of consistency—especially within a geospecific context—Marianne Demarchi explained how one of the fundamental issues to the speed of cross-border payments is not necessarily the adoption itself. The fundamental problem is 'what we call The Last Mile. So it's from the bank who receive the payments, the beneficiary can take some time [...] at the country level, there's some issues—regulatory issues, currency controls, an advisor of the bank needs to call the receiver of the money.' Understanding this, Demarchi said, is crucial because there are efficiencies that exist beyond the current perceptions of cross-border payments, but it is the fragmentation that is leading to delayed expansion.
Responding to Agarwals question of the role of RTP systems within this discussion, Ainsley Ward said 'it solves a number of these issues because the settlement is actually enacted locally, the fact that the transactions are fundamentally final as they pass through the domestic system. Then they are passed through the opposite side [...] and settled again. [...] if you look at the world of international payments, money across borders, you're probably looking at a smaller percentage that moves through the SWIFT network and those regular channels. Lots of money is moving through costly, difficult to use and risky channels [...] because it's faster than settling through banks.'
Turning to the point of solutions, Agarwal asked the audience, via Slido, what they believed should be the focus. Similar to the initial question, there was a clear favourite: interconnected RTP (real-time payments). Trailing behind it were current methodologies, stablecoins and bilateral connectivity.
Common compliance framework
Responding, Hutarovich re-emphasised the belief that technology is not the current issue, but the rules and regulations in place: 'We want to be much faster when we move money across borders. But that's not only the good people and the poorest of the poorest, that's also the fraudster [...] so now it's actually harder to get your money back [...] It doesn't really help if we solve one problem on one end if we haven't solved it on the other end.'
Quizzed on the role of stablecoins and if, given its answer on the audience vote, there was any strength to it as a solution, most panellists echoed this same sentiment.
Hutarovich commented: 'It doesn't matter what rail we're running it on, it's still going to come back to the rules and regulations,' with Amara backing up this explanation and asking for a common compliance framework.
Finally, Agarwal asked for the panellists opinions on the industry's ability to achieve the goals of the G20 roadmap by 2027. Every member said it would not be reached or achieved in its current form and instead sought to reframe the perspective on the deadline.
Ward stated: 'An understanding of the answer should be achievable by 2027. Actually implementing—I've been in the payments industry 25 years—so my answer would be no.'
Hutarovich called the deadline a 'turning point', not a finish line, and Demarchi explained that other banks are realising that their processes are dated and that, on the regulatory side, there needs to be more coordination between the public and private sectors.
Amara concluded that 'delivery has outpaced discussions, which is really positive [...] it's a no, but it's very promising.'