FSB targets cross-border payments regulations

“Technological advances in cross-border payments have led to an increase in the number and diversity of payment service providers and the services they offer,” the FSB noted.

The regulations governing these services have had to adapt to these innovations without using global standards.

In response, the FSB proposes recommendations to level the playing field and reduce the risk of regulatory arbitrage by ensuring the “quality and consistency of the legal, regulatory and supervisory regimes” for payment service providers.

“Greater consistency in the treatment of payment services… supports an environment that reduces costs, increases the speed of delivery and improves access to and transparency in financial services,” the FSB said.

The consultation also sets out policy recommendations aimed at reducing friction in data governance – the variety of laws, rules and regulations that apply across markets to the collection, storage and management of data that are an obstacle to improving the cost, speed, transparency and accessibility of cross-border payments, the FSB said.

These issues include payment data inconsistencies that disrupt the smooth processing of cross-border payments, data sharing restrictions that make it difficult to process cross-border payments securely, and increased costs due to data storage and processing requirements.

In addition to policy recommendations in this area, the FSB proposes establishing a forum of policymakers dealing with payments, anti-money laundering regulation, sanctions, and data protection and privacy to help implement the proposals.

The Financial Stability Board said the consultation was part of its work for the G20 on cross-border payments, which has identified faster, cheaper and more inclusive payment systems as a priority.

Comments on the proposal can be submitted until September 9.