The EU Is Working to Improve and Extend Cross-Border Payments Globally
The EU is the world’s second-largest economy but just one part of the global payments market. In October, the Eurosystem announced plans to improve global payments and connect to the rest of the world through a series of new initiatives.
Key Takeaways
- Cross-border payments are transactions between parties in different countries
- The Eurosystem could soon introduce improvements to cross-border payments
- One initiative involves building a cross-currency settlement service based on TIPS, the Eurosystem’s existing instant payment system
- Secondary plans involve exploring ways to link with fast payment systems globally
- The initiatives support the EU retail payments strategy and G20 roadmap goals
What Are Cross-Border Payments?
Cross-border payments are transactions between parties in different countries, usually involving some combination of individuals, companies, or financial institutions.
Global economic activity is helping the cross-border payments industry grow larger. According to FXC Intelligence, the size of the cross-border payments market was $190 trillion in 2023. That value could rise by 53% and reach more than $290 trillion by 2030.
However, cross-border payments come with numerous challenges. Effective cross-border payment systems must provide low transaction costs, fast settlements, conversion between currencies, and compatibility between participating services, financial institutions, and countries.
The Eurosystem now aims to address some of those issues with a variety of improvements to cross-border payments. Here’s how things could change.
EU Could Extend TIPS Internationally
On Oct. 21, the Governing Council of the European Central Bank (ECB) announced new initiatives to improve cross-border payments both inside and outside the EU.
Each effort builds upon the Eurosystem’s TARGET Instant Payment Settlement (TIPS), which has allowed individuals and companies to perform real-time payments 24/7 through participating payment service providers since 2018.
The first initiative involves building a cross-currency settlement service in TIPS. This will allow payments in one TIPS currency to be settled in a different TIPS currency or a central bank currency. Initially, settlements will support the euro, Swedish kronor, and Danish krone.
Another initiative could involve linking with global fast payment systems, including through the creation of a cross-currency settlement service for TIPS based on the European Payments Council’s One-Leg Out Instant Credit Transfer scheme. Compatible global fast payment systems are expected to express interest and join the initial exploration.
Other exploratory work could involve joining the Bank for International Settlements (BIS) multilateral instant payment systems network, Project Nexus, initially focusing on several central banks in Asia. It could also involve a bilateral link with India’s Unified Payments Interface (UPI).
Supporting Broader Goals
Each initiative will help support broader goals, including supporting a G20 roadmap focused on enabling “faster, cheaper, more transparent and accessible” payments.
The plans will also contribute to the Eurosystem’s retail payments strategy, which aims to support consumer and business payments outside the EU.
Accordingly, those goals could improve the financial system globally and in the EU while providing superior options to financial users at every level.
Frequently asked questions
What is a multi-currency account/virtual IBAN?
A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.
You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.
A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.
- Funds can be deposited and withdrawn from the account for a small fee.
- Account holders can send and receive money with other Payset users for free.
- Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS.
- Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
- We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days
Are there limits on the amount of money I can send and receive?
No, there are no transaction limits on Payset multi-currency accounts.
However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.
How is Payset regulated?
Payset is regulated as an authorized Electronic Money Institution by the UK Financial Conduct Authority. Our activities are also regulated by the Payment Services Regulation 2017 and the Electronic Money Regulation 2011 (SI 2011/99).
How do I add money to my account?
How do I send money from my account?
Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.
Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.
Types of Multi-Currency Accounts
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