Paper ranks the comparative success of various regional payments integration projects that are necessary to support economic growth.
The Swift Institute publishes today a new working paper that looks at the wide range of regional payments projects and the factors behind successful integration. The report produced by Dr. Leo Lipis and Colin Adams for the Swift Institute, entitled
“Cross-border low value payments and regional integration: enablers and disablers”, assesses enablers, disablers and success factors across the existing projects, areas which have received little research previously.
The paper explores nine different payments systems (ASEAN, COMESA, IPFA, NPA, SADC, SEPA, SML, WAEMU and WAMZ) looking at how each defines success. Using the findings from the study, each system was evaluated based on a rubric to rank the comparative success of each project across five enablers. Based on the evaluation the paper finds that WAEMU (West African Economic and Monetary Union) and SEPA (Single Euro Payments Area) are the most advanced projects in terms of integration. While the evaluation may tend to favour systems pursuing tighter integration that are farther along in the process of regional cooperation, it provides a useful overview of the most successful regional payments integration projects from around the world.
The paper highlights the following five major enablers of a successful regional payments project:
- Linkage of payments integration to a political goal
- Common currency or comment settlement currency
- Centralized governance structure
- Existence of a common data standard
- Ensuring that the motivations of the different stakeholders are aligned
While the form of tight payments integration that defines a successful regional project remains rare, there are a number of regions that are in various stages of pursuing this goal and an increasing amount of countries are looking to begin integration projects.
Peter Ware, Director of the Swift Institute says: “The latest Swift Institute research provides a clear view of the enablers and disablers of regional payments integration. It helps to define and set benchmarks for success including the adoption of common standards and technical guidelines for payments projects. With this overview, countries can come together and integrate their payment systems in a variety of ways that can improve economic strength and cooperation for all participants.”