Tackling Inconsistencies in Cross-Border Payment Regulations: FSB's Six Key Recommendations
Non-banks are increasingly involved in payments, creating more competition by offering alternative payment options and new technologies. Often, non-bank payment service providers (PSPs) rely on banks for access to payment systems.
In July, the Financial Stability Board (FSB) published a report addressing legal inconsistencies that can arise in areas such as licensing, consumer protection, AML/CFT measures, and data protection between banks and non-banks, particularly in the context of cross-border payments. Cross-border payments are generally more expensive, slower, and less accessible than domestic payments. However, inconsistencies in the laws and regulations of different jurisdictions have been identified as potentially leading to complicated compliance processes, which may contribute to higher costs and slower payment processing.
The FSB has made six recommendations in its report to address these potential problems. The recommendations emphasize that competent authorities should fully understand the risks, review legislation and oversight regimes, ensure consistent application and coordination of the rules, protect consumers, and communicate expectations transparently to stakeholders. The FSB received 19 responses to the consultation, which has recently been published. Most responses acknowledge the problem but call for a deeper analysis of the risks involved and for a clearer differentiation of the risks based on the types of operations provided by PSPs.
You can find the full press release by clicking here.
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