Globalisation of payments highlights need for new standards of governance

Globalisation of payments highlights need for new standards of governance

2020 will see a development in the standards governing the flow of money to match the increased globalisation of payment processing, according to Deloitte.

The "Payment Trends 2020" report states that players facilitating transactions across regions are likely to face challenges meeting the standards of different countries when sending cross-border payments.

This will highlight the need for new standards to govern this flow of money and protect customer data.

According to Deloitte, payment companies must "get their data houses in order" in anticipation of public and private efforts to coalesce around the development of global industry standards to govern payments messaging, interoperability and integration.

The report also states that the payments industry should be prepared for central institutions seeking a more active role in its governance.

There have been signs in recent months of this trend beginning to manifest. At the start of August, the US Federal Reserve announced the development of its FedNowSM service, a real-time gross settlement mechanism to support faster payments.

This was followed three weeks later by the Chinese central bank unveiling a state-backed cryptocurrency, tasking some of its largest institutions including Alibaba and Tencent with dispersing it to China's 1.3 billion citizens.

Deloitte sees these developments some of the principal payment trends for 2020.

The report also highlights the importance of payment providers seeking alternative sources of revenue, as the value of traditional differentiators, such as transaction-processing speed, declines.

This will be driven further by evolving customer expectations for greater convenience and rewards, spurring competition between closed and open payment platforms to vie for consumer loyalty.

This will require companies to decide where in the market they wish to compete with regard to products and services they offer and the growth models they adopt to meet customers' expectations for convenience in making payments.

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