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Informist, Wednesday, Aug 28, 2024

 

--US Fed Waller: Public-pvt partnerships key for cross-border payments

--US Fed Waller: Not enough banks connected to FedNow to link it to UPI

--CONTEXT: Fed board member Christopher Waller at Global Fintech Fest 

--US Fed Waller: Need time to get all US banks connected to FedNow 

--CONTEXT: FedNow is instant payment service developed by US Fed 

 

MUMBAI – Not all US banks and depositories have been on-boarded on the FedNow service so far, and this is a hurdle to interlinking the US's instant payment service with India's widely popular unified payments interface, or UPI, according to Christopher Waller, member of the US Federal Reserve Board of Governors. 

 

"We are still at the beginning of a multiyear journey of establishing a ubiquitous network covering the majority of institutions in our country. Variation around the world in domestic fast payment network adoption means that the value of globally interlinked systems is not yet clear," Waller said at the Global Fintech Fest here today. 

 

On the challenges in interlinking global payment systems, Waller said technology was the easiest part of the process. "We need to get people to sit down in a room and figure out the legalities and regulations," he said on the sidelines of the event.

 

Waller also spoke about how interplay between the public and private sectors might be key to advancing cross-border payments. In India, "the technology-driven payments revolution has been enabled by a public-private partnership to build the technology stack of digital platforms that has broadened financial inclusion and done so at low costs", he said. 

 

The Fed governor also spoke about the risks of enabling fast cross-border payments, as has been the case with domestic payments. "Not all frictions that slow payments down are bad. Certain frictions are purposely built into the global payment system for compliance and risk-management reasons," he said. 

 

The near-term focus of the Fed remains successful implementation of FedNow across the country, Waller said, adding that of the over 9,000 depositories in the US, close to 1,000 had been on-boarded, including all large banks. 

 

On the future of global payment linkages, Waller said, "Variation around the world in domestic fast payment network adoption means that the value of globally interlinked systems is not yet clear."

 

He declined to comment on the US Federal Reserve's monetary policy actions going forward, as well as on the broader US economy.  End

 

Reported by Kabir Sharma

Edited by Avishek Dutta

 

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