Citi report highlights common language for global payments

In light of the fresh report, tokenisation, AI, correspondent banking, and embedded real-time payments are driving efficiencies of scale.

Citi report highlights common language for global payments. Photo: Citi

In such an environment, companies and their consumers are expecting payment services that are instant and are available around the clock, and seven days a week.

In our interconnected digital world, moving money seamlessly across borders is vital, whether the payments are big or small.

The fresh Citi GPS report brings together latest thinking on cross border payments, looking at how things stand now and how the payments landscape is to evolve against this backdrop of rapid-fire technological advancement.

Based on the findings from a Citi TTS survey of approximately 100 financial institutions from around the world, the report draws on expert insights from Citi’s Future of Finance team and several external experts.

It looks at how incumbents and new entrants can win in the cross-border payment business by using the latest technology, alternative payments methods, nascent infrastructure rails, and real-time payments capabilities.

The report also checks in on the latest progress in the G20 roadmap- a collective effort to make cross-border payments cheaper, faster, and more accessible.

The report says that banks are continuing to lose market share to fintech, with the survey finding 38 per cent of fintech firms expect to gain 5-10 per cent of the market in the next 2–5 years, echoing results from last year’s survey, in which 89 per cent of financial institutions’ management expect to lose at least 5 per cent market share to fintech.

Currently, cross-border payment systems use different messaging standards across different markets.

While this doesn’t hinder domestic payments, the fragmentation represents one of the most enduring obstacles to cross-border payments, making it difficult for different participants to communicate with one another in a common language.

To address these challenges and create a common language for global payments, ISO 20022 was adopted.

This is a global and open financial messaging standard for financial institutions, set by an independent, non-governmental standard-setting body.

The idea is to reduce fragmented standards for cross-border payments as it provides rich and structured data for each transaction, enabling enhanced analytics, which should in theory benefit all market participants.

The enriched data sets will also promote end-to-end automation through the transaction life cycle and increase machine-readability – enabling faster processing, greater openness, visibility, and interoperability across different regions and financial market infrastructures.

"Citi is at the forefront of cross-border payment innovations in Vietnam. We understand that for local banks, delivering always-on operations, 24 hours a day, seven days a week, is the top priority over the next five years," said Thuy Lai, country head of Trade and Treasury Solutions at Citi Vietnam.

"Substantial investments have been made by Citi to build our cross-border payments network, and we are here to be a close partner for local banks, bringing world-class capabilities to Vietnam," Lai added.

Widespread adoption of digital payments taking hold Vietnam’s payment sector is rapidly growing, with significant advancements in mobile money, QR code transactions, and e-wallet services led by dozens of payment intermediary organisations.

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