## ppea2023062

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---

### EXECUTIVE SUMMARY — Overview and objectives
- The G20 prioritized enhancing cross-border payments in 2020.
- The Roadmap for Enhancing Cross-Border Payments, launched in 2020, set global ambitions and accountability through 11 quantitative targets.
- The targets are global, covering both G20 and non-G20 countries, with a goal for achieving them in end-2027.
- Targets pertain to transaction speed, cost, access, and transparency for three market segments: wholesale payments, retail payments, and remittances.
- Faster, cheaper, more transparent, and more inclusive cross-border payment services can support economic growth, international trade, global development, and financial inclusion.

### EXECUTIVE SUMMARY — Role and importance of Technical Assistance (TA)
- TA addresses diverse country-level and regional needs through analytics, policy and technical advice, workshops, seminars, and training.
- TA is particularly important for corridors between EMDEs where transaction speeds, costs, access, and transparency show considerable variation and urgent needs.
- The original Roadmap explicitly included TA actions for five of the original nineteen building blocks (BBs).
- TA supports implementation of guidance and principles developed by international bodies and can underpin more informed policy dialogue in IMF surveillance work (Article IV consultations and FSAPs).

### EXECUTIVE SUMMARY — IMF and World Bank comparative strengths and mandates
- IMF:
  - Surveillance work assists standard setting bodies; capacity development (CD) is a core mandate and accounts for nearly a third of its budget.
  - Delivers capacity development through bilateral and customized CD, regional capacity development centers, in-person and online training (including open online courses in partnership with edX), and data collection support such as the Financial Access Survey (covers 189 economies, with 121 data series and historical data from 2004).
- World Bank:
  - Undertakes analytical and advisory activities and provides financing to support country policy and institutional reforms, infrastructure, and institutional capacity.
  - Provides global knowledge and convening and contributes long-standing data initiatives such as the Remittance Prices Worldwide (RPW) database, Global Payment Systems Survey (GPSS), Global Findex, and Enterprise Surveys.
- Both institutions participated in developing the Roadmap and brought EMDE perspectives to the program.

### Stocktake findings — alignment to three priority themes
- Coordinated IMF–World Bank stocktake shows recent and ongoing TA supports three interconnected priority themes:
  - (i) payment system interoperability and extension,
  - (ii) legal, regulatory, and supervisory frameworks,
  - (iii) cross-border data exchange and message standards.
- Both institutions’ TA often covers domestic as well as cross-border payments; the stocktake focused primarily on cross-border aspects.
- Coordination at country/project level is important to ensure complementarity and avoid duplication.

### IMF focus areas and 2024–25 delivery commitments
- IMF-identified focus areas:
  - access to payment systems,
  - extending and aligning operating hours,
  - interlinking of payment systems (in particular, fast payment systems),
  - application of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) rules,
  - ISO 20022 harmonization.
- Concrete steps in 2024 and 2025:
  1. identifying regions and topics where cross-border payments TA would be most valuable;
  2. raising awareness of TA to be offered;
  3. contributing, alongside the World Bank, to international work important for the focus areas;
  4. developing material to share experience of, and distill lessons from, cross-border payments TA.
- Additional resources will need to be allocated to the cross-border payments work.

### World Bank focus areas and delivery commitments
- Will strengthen TA links to the Roadmap by:
  - (i) scaling up TA on fast payments and fast payment system (FPS) design for cross-border payments;
  - (ii) incorporating greater access, extended operating hours, new technologies, and international communication standards (ISO 20022) in payment-system design and policies;
  - (iii) leveraging cross-sectoral projects to promote access to and use of digital ID and data exchange across borders.
- World Bank TA takes a holistic, cross-sectoral approach and draws on global knowledge and data (RPW, GPSS, Global Findex, Enterprise Surveys).

### Areas beyond Roadmap priority themes covered by TA
- IMF assists countries in researching and experimenting with CBDCs, including their integration into broader national and cross-border payment systems.
- World Bank assists countries to identify risks and opportunities of innovation and select approaches aligned with policy priorities and capacity.
- TA in areas such as financial inclusion complements the Roadmap’s objectives.
- TA approaches are flexible; focus areas will be re-evaluated internally to incorporate lessons learned.

### Coordination, complementarity, and delivery modalities
- IMF and World Bank will:
  - share experiences,
  - develop joint material and jointly deliver products/activities where appropriate,
  - maintain open channels of communication to ensure consistency and avoid duplication.
- Each institution’s differing mandate, expertise, and capacities have been taken into account.

### Data, monitoring, and convening
- World Bank data initiatives (RPW, GPSS, Global Findex, Enterprise Surveys) play an important role in monitoring progress toward targets.
- IMF’s Financial Access Survey supports policymakers to measure and monitor payments and financial inclusion.

---

### The World Bank provides a suite of financial products and technical advice and analysis — scope and delivery
- World Bank TA encompasses analytics, advisory, hands-on implementation support, knowledge and convening services.
- Brings together multidisciplinary expertise, public and private sector partners, multilateral institutions, and the global development community to strengthen impact and mobilize resources.
- TA can inform and accompany World Bank financing.
- Country/project level:
  - Works with governments, central banks and financial sector authorities to develop tailored TA programs.
  - Supports regional integration by providing TA to regional organizations and member countries and through convening.
  - TA outputs include assessments, policy notes, strategies, legal/regulatory advice, technical documents, toolkits, workshops and trainings.
- Global level:
  - RPW is the only global source of comparable data on the cost of remittances.
  - Develops global knowledge products and guidance and works with standard setting bodies (SSBs) and international fora.
  - Leads the Global Remittances Working Group (GRWG) and coordinates global calls to action to reduce remittance costs.
  - Flagship events such as Global Payments Weeks (GPW) disseminate knowledge and best practices.

### World Bank delivery frameworks, scale, and complementarity
- TA is delivered through established country engagement frameworks and funding mechanisms, supporting approximately 80 countries each year.
- TA funding can come from World Bank budget, external partners, financing operations, or reimbursable advisory services.
- World Bank TA integrates cross-border aspects within broader NPS development, AML/CFT TA, ID4D, DPI, and private sector/digital development programs.

### World Bank remittances findings and drivers of cost
- RPW Q1 2023 remittance cost statistics:
  - Global average cost of sending $200 in Q1 2023 is 6.3 percent ($12.50).
  - Global average cost of sending $500 in Q1 2023 is 4.3 percent ($21.65).
- Empirical relationships (from Box 1 analysis):
  - Availability of services offered by digital MTOs is negatively related to average cost of sending $200 and its transfer-fee component.
  - More developed infrastructure and enabling legal/regulatory frameworks in sender jurisdiction associated with lower average cost of sending remittances and lower average fees.
  - Restrictions on outward P2P transfers in sending jurisdiction linked to higher average cost and fee of sending $200.
  - Floating exchange rate regime in the sending jurisdiction related to higher average foreign exchange margins.
  - Higher GDP per capita of destination country associated with higher average cost.
  - Larger destination jurisdiction population associated with lower costs (scale effects).
  - Restrictions on inward P2P transfers by receiving jurisdiction associated with lower cost of remittances (possible provider incentives/marketing).
  - Floating exchange rate regime in the receiving jurisdiction shows no statistically significant relationship to cost.
  - Existence of a currency union in the receiving jurisdiction is associated with lower average foreign exchange margins but higher average transfer fees.

---

### IMF stocktake — scope, findings, and gaps (March–April 2023)
- Scope: missions including a cross-border payments aspect (bilateral TA, regional seminars, workshops, training) covering early 2021 to April 2023.
- Findings:
  - TA occurred on two of the three priority themes: payment system interoperability and legal/regulatory/supervisory frameworks.
  - No missions identified on the third priority theme: data exchange and messaging standards.
  - TA on legal, regulatory, and supervisory frameworks represent half of the TA offered in relation to priority themes.
  - Over a third of missions were on additional focus areas, mainly CBDC exploration and crypto assets regulation.
  - To date, TA has not been specifically purposed to contribute to reaching the Roadmap targets.
- Institutional developments:
  - IMF increasing capacity under the remit of the Digital Money Strategy (IMF 2021).
  - Cross-border payments are a high priority for the IMF.

### IMF TA approach and focus areas for 2024/25 (organization and delivery)
- Ten IMF focus areas: six under Monetary and Capital Markets Department (MCM) and four under IMF Legal Department (LEG); MCM and LEG will coordinate.
- Delivery considerations:
  - Hiring new IMF staff and collaboration with outside organizations (e.g., CPMI and FSB members) required.
- Expected near-term impacts:
  - TA will help countries build capacity to tackle market frictions relevant to Roadmap targets (access to payment systems, interlinking FPS, consistent AML/CFT application).
  - TA helpful to EMDE corridors with acute cross-border payment issues.
  - Some focus areas (access to payment systems, CBDC, crypto-assets) may indirectly affect cross-border capital flow levels and volatility.
- Longer-term focus areas:
  - CBDC, crypto-assets regulation, and safe payment corridors are critical for long-term evolution but unlikely to have short-term impact by end-2027.
  - G20 workplan for DGI-3 could involve statistics TA on CBDC and crypto-assets under Recommendation 11 on digital money.
- Legal and regulatory TA priorities:
  - Address legal uncertainties and settlement finality in cross-border payments.
  - Address conflict of laws issues and harmonize relevant laws (e.g., prudential and licensing rules).

---

### Outreach, training, and workshops — IMF delivery modalities and Priority Themes
- TA delivery modes include bilateral TA, regional seminars, workshops, and training; outreach will promote Roadmap frameworks (e.g., CPMI access policies).
- IMF can use CPMI community of practice and share TA experiences with permission.

Priority Theme 1 — Payment System Interoperability and Extension:
- Access to payment systems:
  - Improve direct access by banks, non-banks and payment infrastructures to level the playing field for non-bank PSPs.
  - IMF will assist member countries in conducting self-assessments of access policies (CPMI best practices framework, May 2022).
- Extending and aligning operating hours:
  - Limited RTGS operating hours constrain processing times; CPMI report (May 2022) outlines three potential scenarios for extending RTGS hours.
  - IMF will assist countries consider suitable end states and provide regional training/workshops without endorsing any specific end state:
    - (i) an increase in operating hours on current operating days,
    - (ii) inclusion of current non-operating days (usually weekends and holidays),
    - (iii) full 24/7 operations.
  - Definition preserved: The global settlement window is the period when the largest number of RTGS systems simultaneously operate; currently considered 06:00 to 11:00 Greenwich Mean Time (GMT) on working days.
- Interlinking of payment systems:
  - IMF will support FPS interlinking initiatives bilaterally and multilaterally, coordinate between TA recipient countries and those they wish to link with, and provide multilateral training/workshops in conjunction with CPMI and BIS Innovation Hub (BISIH), sharing experiences including Project Nexus.

Priority Theme 2 — Legal, Regulatory, and Supervisory Frameworks:
- Application of AML/CFT rules:
  - Promote efficient legal, regulatory, and supervisory environment while maintaining safety and integrity.
  - IMF will support risk-based supervisory frameworks, beneficial ownership transparency (Guide to Beneficial Ownership Transparency, IMF 2022a), FATF travel rule implementation, and regional training.
- Access to payment systems (non-banks):
  - Assist countries in evaluating amendments to align with FSB and CPMI recommendations and reduce barriers to non-bank PSP participation.
- Adoption of ISO 20022:
  - IMF will include ISO 20022-related amendments in AML/CFT TA once FATF updates Recommendation 16.

Priority Theme 3 — Data Exchange and Messaging Standards:
- Harmonized ISO 20022:
  - IMF will promote adoption and provide technical support and regional outreach for consistent global implementation following CPMI consultation (CPMI 2023).

Additional Focus Areas:
- CBDC:
  - Retail CBDC issuance explored in over 100 countries; over 40 requests for assistance from low-income and emerging market economies since 2020.
  - IMF focus: facilitate peer learning and act as trusted advisors; develop a CBDC Handbook envisaged to have about 20 chapters over the next four to five years.
  - CPMI-BISIH-IMF-World Bank report (July 2022) and IMF paper (April 2023) on CBDC informed IMF approach.
- Crypto-assets:
  - IMF and FSB have advanced policy and regulatory recommendations; IMF will prepare outreach and training to promote IMF and FSB recommendations.
- Safe payment corridors:
  - Aim to reduce remittance costs, de-risking, and correspondent banking pressures in lower ML/TF corridors.
  - IMF and World Bank published A Draft Framework for Money Laundering/Terrorist Financing Risk Assessment of a Remittance Corridor (September 2021); IMF promoting pilot risk assessments with volunteer countries.

TA delivery in 2024–25 — targeting, awareness, international contribution, knowledge management
- Targeting and prioritization:
  - IMF will identify regions most underserved by TA, regions lagging in FSB updates, and high-cost corridors per World Bank RPW.
  - LEG contribution subject to availability of funds and donor discussions.
- Awareness-raising:
  - Outreach events at IMF-World Bank Spring and Annual Meetings in 2024 and 2025; promotion in IMF MCM Technical Assistance Annual Report (IMF 2023d).
- Contribution to international work (examples and timelines):
  - Interim report to the G20 on FPS interlinking governance, risk management, and oversight considerations (due Oct 2023);
  - Development of harmonized global ISO formats for cross-border payments (due October 2023);
  - Alignment of market practice guidelines (by July 2024).
- Knowledge management:
  - Summarize and analyze cross-border payments TA experiences; create a repository, collect training materials, and disseminate good practices.
- Re-evaluation in 2025:
  - Re-evaluate TA approach and Roadmap priority actions based on lessons from first two years; focus on actions with insufficient progress (international guidance and principles; APIs; unique identifiers; service level agreements).

---

### Developments outside priority actions — multilateral platforms and World Bank approach
- Multilateral platforms (multi-jurisdictional cross-border payment systems) are being considered for TA suitability; CPMI-BISIH-IMF-World Bank joint report identified challenges and approaches (CPMI-BISIH-IMF-World Bank 2023).
- World Bank approach:
  - Adopts Roadmap priority themes and embeds new guidance, tools, and best practices in TA delivery.
  - Project FASTT aims to build on domestic FPS foundations to create interlinking opportunities and onboard future multilateral initiatives.
  - Over the last 15 years, World Bank supported payment systems reforms in 120 countries.

Priority Theme 1 — World Bank specifics:
- Incorporate non-bank access, extended operating hours, and ISO 20022 in RTGS and payment system design.
- Project FASTT objectives over next 3-5 years:
  - support central banks’/FPS operators’ preparedness for interlinking;
  - identify interlinking opportunities, support business case development, prepare requirements and implementation support;
  - produce global knowledge on technical aspects relevant to interlinking.
- Project FASTT, ID4D, and G2Px involved in DPI initiatives; DPI endorsed as a priority by G20 Leaders at the New Delhi Summit in September 2023.

Priority Theme 2 — World Bank specifics:
- Scale up support for non-bank PSP regulation and supervision.
- Review TA framework on payments oversight and PSP supervision.
- Identify approaches for enhancing information to end users, building on remittances and consumer protection TA.
- National Risk Assessments: World Bank engaged in 114 countries to date; FIRM tool delivered via workshop and remote support.
- World Bank will support FATF’s revision of the Travel Rule in Recommendation 16.

Priority Theme 3 — World Bank specifics:
- Promote interoperability of digital ID and data exchange for cross-border payments.
- Support adoption of a harmonized version of ISO 20022 through payment system TA; integrate API harmonization guidance in open banking and payment systems work.

Complementary country support and programs:
- Greenback programs and remittances digitalization:
  - Greenback 3.0 will focus on digital remittance products, awareness, and electronic payment acceptance.
  - Pilot in FY24 and extension to at least two (2) large remittance recipient markets covering at least three countries.
- Cross-sectoral approach:
  - TA coupled with project or budget support across financial inclusion, payment system development, private sector, digital economy, identification systems, and government payments.
- Research and innovation:
  - Support research agendas, country-context framing, capacity building, analytical and technology architecture support.
- Crypto-assets and stablecoins:
  - Support regulation, oversight and supervision in line with international standards.

Global knowledge, data, convening and partnerships:
- FY24–25 knowledge program to focus on knowledge gaps and innovative topics (e.g., determinants of FX margins in remittances).
- RPW to be enhanced through a new interactive webpage.
- Partnerships with international organizations, SSBs, donors and regional partners (e.g., AMF, CEMLA, SADC Payment System Oversight Committee).
- Standing fora (e.g., GRWG) and recurring events (e.g., GPW) for knowledge exchange and dissemination.

Conclusions and operational notes:
- TA is critical for achieving G20 cross-border payments targets by 2027; TA will remain demand-driven.
- TA delivery requires appropriate funding; IMF and World Bank will explore existing and new TA funding.
- Collaboration with FSB, CPMI, central banks and others will provide technical expertise and support missions and workshops.
- IMF to re-evaluate CD approach in 2025; World Bank will assess TA approach regularly in fiscal year processes.
- LEG-led focus areas subject to availability of funds and donor discussions.

---

### Annex I — Summary of IMF and World Bank Stocktake (highlights)
- Joint stocktake covered any TA involving cross-border payments (country and regional activities).
- IMF stocktake (early 2021–April 2023):
  - Majority of IMF TA featured a domestic element; a small minority solely focused on cross-border payments.
  - TA took place across all regions.
  - Cross-border implications of CBDC explored in 6 countries and two regional workshops in FY23.
  - TA on AML/CFT, virtual assets, and non-bank PSPs provided bilaterally and regionally.
  - Example regional workshop: one-day workshop in Hanoi, Vietnam (March 2023) co-hosted by SBV with IMF presentations on cross-border payments landscape, financial integrity risks, and technological/cybersecurity issues; peer learning from MAS, BOT, BSP.
- World Bank stocktake (FY23 focus):
  - Remittances TA in FY23: 19 country projects and three regional/subregional projects.
  - Project Greenback implemented in 11 countries and remittance champion cities.
  - AML/CFT National Risk Assessments: World Bank conducted 10 in 2023; 114 countries assessed to date.
  - NPS TA in FY23:
    - 30 country projects on regulatory modernization and consumer protection.
    - 31 country projects on payments infrastructure upgrades (RTGS upgrades, FPS development).
  - Regional projects in FY23 with payments/finance components: eight projects covering Sub-Saharan Africa, Eastern Caribbean, Western Balkans, Pacific Islands.
  - ID4D and digital public infrastructure: five regional projects and technical assistance activities on cross-border use of ID in FY23.
  - RPW covers 367 country corridors.

---

### Annex II — Roadmap targets (summary by challenge and payment sector)
- Definitions:
  - Wholesale payments: payments with a value of USD 100,000 or more.
  - Retail payments: payments with less than USD 100,000 other than remittances.
  - Retail market segment includes B2B, P2B/B2P and P2P other than remittances.
- Cost targets:
  - Wholesale: No target set.
  - Retail: Global average cost of payment to be no more than 1%, with no corridors with costs higher than 3% by end-2027.
  - Remittances: Reaffirm UN SDG: Global average cost of sending $200 remittance to be no more than 3% by 2030, with no corridors with costs higher than 5%.
- Speed targets:
  - Wholesale:
    - 75% of cross-border wholesale payments credited within one hour of payment initiation or within one hour of the pre-agreed settlement date and time for forward-dated transactions, by end-2027.
    - Remainder within one business day, by end-2027.
    - Payments reconciled by end of day on which they are credited, by end-2027.
  - Retail:
    - 75% of cross-border retail payments to provide availability of funds for recipient within one hour of payment initiation and remainder within one business day, by end-2027.
  - Remittances:
    - 75% of cross-border remittance payments in every corridor to provide availability of funds for recipient within one hour of payment initiation and remainder within one business day, by end-2027.
- Access targets:
  - Wholesale: All financial institutions operating in all payment corridors to have at least one option for sending and receiving cross-border wholesale payments by end-2027.
  - Retail: All end-users to have at least one option for sending or receiving cross-border electronic payments by end-2027.
  - Remittances: More than 90% of individuals who wish to send or receive a remittance payment to have access to a means of cross-border electronic remittance payment by end-2027.
- Transparency targets:
  - All PSPs to provide at a minimum: total transaction cost (including intermediaries and FX/conversion charges), expected time to deliver funds, tracking of payment status, and terms of service by end-2027.

*Source: ppea2023062*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Overview: G20 Roadmap and objectives
- The G20 prioritized enhancing cross-border payments in 2020.
- The Roadmap for Enhancing Cross-Border Payments, launched in 2020, set global ambitions and accountability through 11 quantitative targets.
- The targets are global, covering both G20 and non-G20 countries, with a goal for achieving them in end-2027.
- Targets pertain to transaction speed, cost, access, and transparency for three market segments: wholesale payments, retail payments, and remittances.
- Faster, cheaper, more transparent, and more inclusive cross-border payment services can support economic growth, international trade, global development, and financial inclusion.

### Role and importance of Technical Assistance (TA)
- TA plays a critical role in helping achieve the Roadmap targets by addressing diverse country-level and regional needs through analytics, policy and technical advice, workshops, seminars, and training.
- TA is particularly important for corridors between EMDEs where transaction speeds, costs, access, and transparency show considerable variation and urgent needs.
- The original Roadmap explicitly included TA actions for five of the original nineteen building blocks (BBs).
- TA supports implementation of guidance and principles developed by international bodies and can underpin more informed policy dialogue in IMF surveillance work (Article IV consultations and FSAPs).

### IMF and World Bank comparative strengths and mandates
- The IMF’s surveillance work assists standard setting bodies; its capacity development (CD) is a core mandate and accounts for nearly a third of its budget.
- The World Bank undertakes analytical and advisory activities and provides financing to support country policy and institutional reforms, infrastructure, and institutional capacity.
- The World Bank provides global knowledge and convening and contributes long-standing data initiatives such as the Remittance Prices Worldwide (RPW) database, Global Payment Systems Survey (GPSS), Global Findex, and Enterprise Surveys.
- The IMF and World Bank participated in developing the Roadmap and have served as voices of non-G20 countries, bringing EMDE perspectives to the program.

### Stocktake findings: alignment to three priority themes
- A coordinated IMF–World Bank stocktake shows recent and ongoing TA supports the Roadmap’s three interconnected priority themes:
  - (i) payment system interoperability and extension,
  - (ii) legal, regulatory, and supervisory frameworks,
  - (iii) cross-border data exchange and message standards.
- Both institutions’ TA often covers domestic as well as cross-border payments; the stocktake focused primarily on cross-border aspects.
- Both institutions identify opportunities to scale up support within their respective mandates and scope.
- Coordination at country/project level is important to ensure complementarity and avoid duplication.

### IMF focus areas and delivery commitments (2024–25)
- IMF-identified focus areas to best help achieve the Roadmap targets while safeguarding financial integrity include:
  - access to payment systems,
  - extending and aligning operating hours,
  - interlinking of payment systems (in particular, fast payment systems),
  - application of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) rules,
  - ISO 20022 harmonization.
- Concrete steps the IMF will take in 2024 and 2025 to bring forward TA on the focus areas:
  1. identifying regions and topics where cross-border payments TA would be most valuable;
  2. raising awareness of TA to be offered;
  3. contributing, alongside the World Bank, to international work, in particular those that are important for the focus areas;
  4. developing material to share experience of, and distill lessons from, cross-border payments TA.
- Additional resources will need to be allocated to the cross-border payments work.
- The IMF delivers capacity development through bilateral and customized CD, regional capacity development centers, in-person and online training (including open online courses in partnership with edX), and data collection support such as the Financial Access Survey (covers 189 economies, with 121 data series and historical data from 2004).

### World Bank focus areas and delivery commitments
- The World Bank will strengthen TA links to the Roadmap to support safe, reliable, and efficient payment systems by:
  - (i) scaling up TA on fast payments and fast payment system (FPS) design for cross-border payments;
  - (ii) continuing to incorporate greater access, extended operating hours, new technologies, and international communication standards (ISO 20022) in the design, development and/or procurement of domestic and cross-border payment systems as well as payment system policies and regulations;
  - (iii) leveraging cross-sectoral projects to promote access to and use of digital ID and data exchange across borders.
- World Bank TA takes a holistic, cross-sectoral approach and draws on global knowledge and data (RPW, GPSS, Global Findex, Enterprise Surveys).
- TA directly contributing to the three priority themes will support critical enablers of cross-border payments, regional integration, innovation, and a level-playing field.

### Areas beyond the Roadmap priority themes covered by TA
- IMF and World Bank TA programs are broader in scope than the G20 Roadmap priority themes:
  - IMF assists countries in researching and experimenting with CBDCs, including their integration into broader national and cross-border payment systems.
  - World Bank assists countries to identify risks and opportunities of innovation and select approaches aligned with policy priorities and capacity.
- TA in areas such as financial inclusion is directly relevant to the Roadmap’s objectives and complements the priority themes.
- TA approaches are intended to be flexible and adaptable; focus areas will be internally re-evaluated to remain relevant and to incorporate lessons learned.

### Coordination, complementarity, and delivery modalities
- The IMF and World Bank will collaborate, coordinate, and complement each other at the country/project level where appropriate, including:
  - sharing of experiences,
  - developing joint material and joint delivery of a product/activity,
  - maintaining open channels of communication to ensure consistency and avoid duplication.
- Each institution’s differing mandate, expertise, and capacities have been taken into account in developing their TA approaches.

### Data, monitoring, and convening
- The World Bank’s data initiatives (Remittance Prices Worldwide database, GPSS, Global Findex, Enterprise Surveys) play an important role in monitoring progress toward the targets.
- The IMF’s Financial Access Survey supports policymakers to measure and monitor payments and financial inclusion.

*Source: ppea2023062 - EXECUTIVE SUMMARY*

### 8.      The World Bank provides a suite of financial products and technical advice and analysis

### 8.      The World Bank provides a suite of financial products and technical advice and analysis

### World Bank TA: scope and delivery
- World Bank TA encompasses analytics, advisory, hands-on support in the implementation of reforms, knowledge and convening services.
- Brings together multidisciplinary expertise, public and private sector partners, multilateral institutions, and the global development community to strengthen impact of TA and mobilize resources.
- TA can inform and accompany World Bank financing.
- At country/project level:
  - Works with governments, central banks and financial sector authorities to develop and deliver TA programs tailored to each country’s needs.
  - Supports regional integration by providing TA to regional organizations and member countries and through convening.
  - TA outputs include assessments, policy notes, strategies, legal/regulatory advice, technical documents, toolkits, workshops and trainings.
- Globally:
  - Provides data, knowledge and convening services to monitor and accelerate progress towards shared goals.
  - RPW is noted as the only global source of comparable data on the cost of remittances.
  - Develops global knowledge products and guidance to help national central banks and financial regulators in the framework of country reforms and works with standard setting bodies (SSBs) and international fora to develop and update international standards and recommendations.
- Leads the Global Remittances Working Group (GRWG) and coordinates global calls to action for reducing remittance costs and increasing financial inclusion.
- Flagship events such as the Global Payments Weeks (GPW) disseminate global knowledge and best practices.

### IMF and World Bank approaches to TA — common attributes and coordination
- Both institutions operate independently in selecting TA recipients, obtaining approval, anchoring governance standards, prioritizing requirements, raising funds, seeking comments on their advice, and reporting to financing partners.
- TA is demand-driven, agreed with, and requested by the recipient country’s financial sector authorities.
- TA delivery modes:
  - Stand-alone TA.
  - World Bank: TA can inform or complement existing investment projects or development policy financing.
- TA funding:
  - Can be funded from the IMF or World Bank budget or by external financing partners (non-profit organizations, governments or governmental agencies).
  - World Bank TA can additionally be funded as part of a financing operation or as reimbursable advisory services.
- Cross-border payments TA relates closely to other work (Article IV consultations, IMF-World Bank FSAPs) and financial sector development projects; recommendations can feed into IMF country surveillance and World Bank country partnership frameworks and operations.
- Both institutions contribute to SSBs and the G20 cross-border payments program (e.g., development of the G20 Roadmap, recommendations, principles, guidance) and support promotion and implementation among member countries and assessments of implementation effectiveness.

### Importance of TA for the G20 Roadmap and remittances data
- Roadmap targets set globally but require coordinated jurisdiction-level action; targets designed to be directly related to challenges and meaningful to stakeholders.
- Data limitations:
  - FSB’s first annual KPI monitoring report provides broad general picture; the retail segment is highly heterogeneous, making standardized aggregation particularly challenging.
  - The remittances segment is considered to be payments mainly sent to EMDEs.
- Tailored TA is critical to address country-specific challenges to help achieve global targets.
- Remittance cost statistics (RPW, Q1 2023):
  - Global average cost of sending $200 in Q1 2023 is 6.3 percent ($12.50).
  - Global average cost of sending $500 in Q1 2023 is 4.3 percent ($21.65).
  - Some corridors, particularly inter-EMDE corridors in Sub-Saharan Africa, have costs multiple times the global average.
- World Bank analysis suggests digital financial services, supported by enabling reforms, can bring down remittance costs.
- TA roles: strengthen analytical capacity, identify pain points, craft policies, propose legislative/regulatory changes, and develop implementation plans.

### Drivers of remittance costs (Box 1) — empirical findings
- Analysis based on RPW database and World Bank work on digital services and non-bank providers.
- Key empirical relationships and associations:
  - Negative relationship between availability of services offered by digital money transfer operators (MTOs) and the average cost of sending $200 and its transfer-fee component.
  - More developed infrastructure and enabling legal and regulatory frameworks in the sender jurisdiction are associated with lower average cost of sending remittances and lower average fees.
  - Existence of restrictions on outward person-to-person (P2P) transfers in the sending jurisdiction is linked to higher average cost and higher average fee of sending $200.
  - Floating exchange rate regime in the sending jurisdiction is related to higher average foreign exchange margins.
  - Higher gross domestic product per capita of the destination country is associated with higher average cost.
  - Larger destination jurisdiction population is associated with lower costs (scale effects).
  - Existence of restrictions on inward P2P transfers by the receiving jurisdiction is associated with lower cost of remittances (possible provider incentives/marketing).
  - Floating exchange rate regime in the receiving jurisdiction shows no statistically significant relationship to cost.
  - Existence of a currency union in the receiving jurisdiction is associated with lower average foreign exchange margins but higher average transfer fees.
- Source cited for Box 1 analysis: Didier Brandao, Tatiana; Feyen, Erik H.B.; Llovet Montanes, Ruth; Ardic Alper, Oya Pinar (2022). Global Patterns of Fintech Activity and Enabling Factors: Fintech and the Future of Finance Flagship Technical Note (English).

### IMF stocktake (scope, findings, and gaps)
- Conducted in March and April 2023, covering period early 2021 to April 2023.
- Objective: identify TA priorities and opportunities to support cross-border payments.
- Stocktake scope: missions including a cross-border payments aspect even if not sole focus — bilateral country TA, regional seminars, workshops, and training.
- Findings:
  - TA occurred on two of the three priority themes: payment system interoperability and legal regulatory and supervisory frameworks.
  - No missions identified on the third priority theme: data exchange and messaging standards.
  - TA on legal, regulatory, and supervisory frameworks represent half of the TA offered in relation to the priority themes.
  - Over a third of missions were on additional focus areas, mainly CBDC exploration and crypto assets regulation.
  - To date, TA has not been specifically purposed to contribute to reaching the Roadmap targets.
- Institutional developments:
  - IMF increasing capacity under the remit of the Digital Money Strategy (IMF 2021), which mandates ensuring digital money fosters domestic and international economic and financial stability.
  - Cross-border payments are a high priority for the IMF.
- Annex 1 (referenced) provides a detailed summary of stocktake findings.

### World Bank stocktake and approach
- World Bank provides extensive payment system TA covering domestic and cross-border payments within a holistic national payments system (NPS) development approach.
- Safe, reliable, and efficient payment systems are instrumental to World Bank mission to end extreme poverty and boost prosperity and to help achieve the Sustainable Development Goals (SDGs).
- World Bank supports countries to improve remittance markets through remittances TA while embedding cross-border payments into broader NPS development TA.
- Cross-border payments sit at intersection of other World Bank TA programs (e.g., AML/CFT TA) and benefit from synergies with private sector development, digital development (including digital ID and data protection).
- Figure 3 (referenced) shows distribution of World Bank projects in FY22-23 (July 2021 to June 2023) grouped by workstream across the G20 Roadmap’s priority themes.
- Current approach provides a basis for more extensive and tailored cross-border support aligned with the prioritized Roadmap.
- Annex 1 (referenced) provides a detailed summary of World Bank stocktake findings.

### IMF TA approach and focus areas for 2024/25
- Based on the stocktake and updated Roadmap actions, the IMF identified ten focus areas; these focus areas clarify contributions and avoid duplication with the World Bank.
- Organizational responsibilities:
  - Six focus areas fall under the remit of the Monetary and Capital Markets Department (MCM).
  - Four focus areas fall under the IMF Legal Department (LEG).
  - MCM and LEG will coordinate and collaborate on focus areas; delineation indicates typical lead department but collaboration is expected.
- Delivery considerations:
  - Hiring new IMF staff and collaboration with outside organizations (e.g., CPMI and FSB members) will be required.
  - Table 1 (referenced) maps focus areas to Roadmap actions.
- Expected near-term impacts:
  - TA focus areas will help countries and regions build capacity to tackle market frictions relevant to Roadmap targets (e.g., access to payment systems, interlinking fast payment systems, consistent application of AML/CFT rules).
  - TA especially helpful to EMDE corridors with acute cross-border payment issues.
  - Several focus areas (access to payment systems, CBDC, crypto-assets) may indirectly affect cross-border capital flow levels and volatility via infrastructure improvements; IMF best practices on liberalization and management of capital flows (IMF 2022b) will be important to manage contingencies.
- Longer-term focus areas:
  - CBDC, regulation of crypto-assets, and safe payment corridors are not among the three Roadmap priority themes because they are unlikely to have short-term impact by the target date of end-2027, but they are critical for long-term evolution of cross-border payments.
  - G20 workplan for a new Data Gaps Initiative (DGI-3) could involve statistics TA with countries on CBDC and crypto-assets under Recommendation 11 on digital money.
- Legal and regulatory TA priorities:
  - Address legal uncertainties and settlement finality in cross-border payments.
  - Address conflict of laws issues.
  - Clarify enforcement rules on multiple payment systems and participants across jurisdictions (including enforcement of collateral).
  - Harmonize relevant laws (e.g., different prudential and licensing rules applicable to participants in the payment system).

*Source: ppea2023062 - 8.      The World Bank provides a suite of financial products and technical advice and analysis*

### 23.      TA will make extensive use of outreach, training, and workshops, both bilateral with

### ppea2023062 - 23.      TA will make extensive use of outreach, training, and workshops, both bilateral with

### Outreach, training, and workshops
- TA will make extensive use of outreach, training, and workshops, both bilateral with individual member countries and regionally.
- The IMF will inform and promote usage of the frameworks, guidance and principles developed under the Roadmap, such as CPMI’s access policies to key payment systems.
- The IMF can use groups such as the CPMI’s community of practice to learn from exchange of information and experiences among member central banks on TA missions.
- The IMF can also share experiences from TA conducted on this topic with Roadmap groups with expressed permission from recipient countries.

### Priority Theme 1 (Payment System Interoperability and Extension)
- Focus areas:
  - Access to payment systems:
    - Improving direct access by banks, non-banks and payment infrastructures can allow cross-border payment services to be provided safely and efficiently and level the playing field for non-bank PSPs.
    - In May 2022, the CPMI published a best practices framework (CPMI 2022b) for self-assessment of access policies to key payment systems.
    - The IMF will assist member countries in conducting a self-assessment of access policies to key payment systems in their jurisdiction and bring together stakeholders (e.g., payment system operators) to evaluate risks and barriers.
  - Extending and aligning operating hours of key payment systems:
    - Limited operating hours of key payment infrastructures, particularly RTGS systems, constrain processing times, increasing liquidity costs and settlement risks and causing delays.
    - In May 2022, the CPMI published a report (CPMI 2022a) setting out opportunities, risks, and policy implications of three potential scenarios for extending RTGS operating hours.
    - The IMF will assist member countries in considering the most suitable end state for their jurisdictions, taking into account the “global settlement window”.
    - The IMF will provide training and workshops at regional level while not explicitly endorsing any of the three end states: (i) an increase in operating hours on current operating days, (ii) inclusion of current non-operating days (usually weekends and holidays) and (iii) full 24/7 operations.
    - Definition preserved: The global settlement window is the period when the largest number of RTGS systems simultaneously operate. At present, this is considered to be the time period from 06:00 to 11:00 Greenwich Mean Time (GMT) on working days.
  - Interlinking of payment systems:
    - The IMF will provide support at bilateral and multilateral levels on FPS interlinking initiatives.
    - Interlinking arrangements for FPS allow banks and other PSPs to transact without participating in the same payment system or using intermediaries, shortening transaction chains, reducing costs, and increasing transparency and speed.
    - For bilateral TA on linking of FPS, the IMF will act as the coordinator between TA recipient countries and those they wish to establish links with, including advanced economies (AEs).
    - At a multilateral level, the IMF will provide training and workshops in conjunction with the CPMI and the BIS Innovation Hub (BISIH), sharing practical experiences of FPS interlinking and developments in Project Nexus.

### Priority Theme 2 (Legal, Regulatory, and Supervisory Frameworks)
- Focus areas:
  - Application of AML/CFT rules:
    - Work will center on promoting an efficient legal, regulatory, and supervisory environment for cross-border payments while maintaining safety, security, and integrity, including AML/CFT.
    - The IMF has an extensive capacity development program helping countries strengthen legal, regulatory, and AML/CFT supervisory frameworks in line with FATF standards.
    - The IMF supports members to develop and implement risk-based supervisory frameworks to ease correspondent banking relationship pressures and facilitate cross-border payments.
    - The IMF supports efforts to increase access to up-to-date and accurate beneficial ownership information and has released a Guide to Beneficial Ownership Transparency (IMF 2022a).
    - The IMF will continue to support FATF efforts to increase compliance with the travel rule and support countries exploring technology to strengthen AML/CFT implementation.
    - The IMF will continue to provide regional training on financial integrity issues related to cross-border payments.
  - Access to payment systems (non-banks):
    - Improving consistency of bank and non-bank regulation and supervision is key; strengthening proportional application of regulation can result in safer and more efficient cross-border payment services.
    - The IMF will assist member countries in evaluating potential amendments to align legal and regulatory frameworks with FSB and CPMI recommendations, and to reduce legal or regulatory barriers to non-bank PSP participation.
    - The IMF will raise awareness and promote understanding of FSB recommendations and other international standards in bilateral TA, regional seminars, workshops, and training.
  - Adoption of ISO 20022 (enhancing FATF wire transfers rules):
    - ISO 20022 is a common messaging standard enabling richer, structured data sharing and potential efficiency gains through automated straight through processing.
    - The FATF is considering amendments to Recommendation 16 on wire transfers to reflect ISO 20022 terminology and improve consistency and usability of message data for AML/CFT checks.
    - Once adopted, new requirements will be included in relevant IMF technical assistance on AML/CFT efforts (e.g., CDD and record keeping, financial flows analysis, risk-based AML/CFT supervision, legal drafting modules).

### Priority Theme 3 (Data Exchange and Messaging Standards)
- Harmonized ISO 20022 for cross-border payments:
  - The IMF will promote adoption of ISO 20022 requirements for cross-border payments.
  - Regional outreach will assist consistent global implementation once developed and agreed following the CPMI consultation (CPMI 2023).
  - Authorities will be encouraged to consider the harmonized version of ISO 20022 in their migration plans.
  - The IMF will provide technical support to member countries for migration to ISO 20022 and facilitate stakeholder discussions.

### Additional Focus Areas
- CBDC:
  - Central Bank Digital Currencies (CBDC) is the eighth focus area; retail CBDC issuance is being explored in over 100 countries.
  - Over 40 requests for assistance from low-income and emerging market economies across all regions have been received since 2020, with more anticipated.
  - The IMF focuses on facilitating peer learning and acting as trusted advisors on how to think about CBDC rather than whether to pursue it.
  - Over the past two years, cross-border payment efficiency has become an important motivation for CBDC work in EMDEs.
  - Retail CBDC, though being explored by only a few countries for cross-border use for now, has the greatest potential impact on EMDE cross-border remittances.
  - In July 2022, the CPMI in collaboration with the BISIH, IMF, and World Bank issued a report (CPMI-BISIH-IMF-World Bank 2022) identifying and analyzing options for access to and interoperability of CBDC that could improve cross-border payments.
  - In April 2023, the IMF published a paper sketching a multi-year strategy to address frequently asked questions related to CBDC and outlining the process of developing a CBDC Handbook (IMF 2023b).
    - The CBDC Handbook will form the basis for CD engagement and a reference for policymakers and central bank experts, particularly in EMDEs.
    - It will be a significant undertaking, with about 20 chapters envisaged over the next four to five years. Chapters will be produced or updated each year.
    - The Handbook will consider opportunities and risks associated with CBDC, including cross-border usage and potential designs for cross-border payments, and help member countries analyze macro-financial implications and facilitate interoperability.
- Crypto-assets:
  - Crypto-assets is the ninth focus area; the IMF and FSB have advanced policy and regulatory recommendations to respond to macroeconomic and financial stability risks associated with crypto assets.
  - The IMF has outlined key elements of an appropriate policy response including macroeconomic, legal, and financial integrity considerations and implications for monetary and fiscal policies (IMF 2023a).
  - FATF, FSB, and other SSBs have included recommendations on regulation and supervision in international standards to address risks posed by crypto-assets (FSB 2023b).
  - The IMF will prepare an outreach program, including through regional training centers, to promote awareness and implementation of IMF and FSB work on crypto assets.
  - The IMF will develop a program to promote IMF and FSB recommendations for a comprehensive policy framework for crypto assets, including training, workshops, or bilateral TA on risks and regulatory approaches (including legislative amendments).
- Safe payment corridors:
  - Safe payment corridors is the tenth focus area, aiming to reduce remittance costs, de-risking, and correspondent banking pressures in lower ML/TF corridors by decreasing compliance and regulatory costs.
  - In September 2021 the IMF and World Bank published A Draft Framework for Money Laundering/Terrorist Financing Risk Assessment of a Remittance Corridor (IMF-World Bank 2021).
  - The draft methodology was further promoted at the 2022 IMF-World Bank Annual meetings.
  - The IMF has initiated outreach to raise awareness of the benefits of implementing the safe payment corridors methodology and offered support to volunteer countries for pilot implementation.
  - The IMF will continue outreach to encourage pilot risk assessments for likely lower ML/TF risk corridors; implementation timing depends on volunteer country uptake and is therefore uncertain.

### TA Delivery by the IMF in 2024–25
- Near-term delivery:
  - TA will need to be delivered in the near term to have a meaningful impact on achieving the Roadmap targets by the target date of 2027.
  - Outreach will raise member awareness about TA on particular focus areas, and the IMF will re-evaluate internally areas not currently TA priorities in 2025.
- Targeting and prioritization:
  - The IMF will identify and target TA to regions where cross-border payment TA is most needed and most valuable by examining:
    - (1) regions currently underserved by TA as identified through the stocktake;
    - (2) regions highlighted as lagging in the FSB’s annual updates on progress toward achieving the targets using regional breakdowns of the global Key Performance Indicators (FSB 2022) where available; and
    - (3) high-cost country corridors according to the World Bank RPW database.
  - Contribution to TA from the IMF Legal Department (LEG) is subject to availability of funds and discussions with external donors.
- Awareness-raising and promotion:
  - Awareness will be raised through targeted outreach events at the IMF-World Bank Spring and Annual Meetings in 2024 and 2025 and other channels.
  - Promotion of cross-border payments TA success stories and country testimonials in publications such as the IMF MCM Technical Assistance Annual Report (IMF 2023d) will encourage countries to request TA.
- Contribution to international work:
  - The IMF will continue to actively contribute to international work important for TA focus areas, including:
    - Interim report to the G20 on FPS interlinking governance, risk management, and oversight considerations (due Oct 2023);
    - Development of harmonized global ISO formats for cross-border payments (due October 2023);
    - Alignment of market practice guidelines (by July 2024).
- Knowledge management and lessons learned:
  - The IMF will summarize and analyze experiences of cross-border payments TA, creating a repository of information through gathering experiences, analysis and lessons from the field related to the Roadmap and staff publications.
  - Training materials from workshops will be collected, and good practices on TA focus areas arising from TA mission experiences will be gathered and disseminated.
- Re-evaluation in 2025:
  - The TA approach and Roadmap priority actions will be re-evaluated internally in 2025 based on experiences and lessons from the first two years of implementation.
  - Focus will be given to priority actions with insufficient progress to determine suitability for TA, specifically actions relating to: (1) international guidance and principles/regulatory, supervisory and oversight frameworks; (2) APIs; (3) unique identifiers; and (4) service level agreements.
  - The Roadmap and the IMF’s TA approach are designed to be flexible and adaptable over time to account for progress and evolution of the cross-border payments landscape.

*IMF AND WORLD BANK APPROACH TO CROSS-BORDER PAYMENTS TECHNICAL ASSISTANCE, INTERNATIONAL MONETARY FUND AND WORLD BANK*

### 43.      Developments outside the priority actions, particularly in cross-border multilateral

### 43.      Developments outside the priority actions, particularly in cross-border multilateral

### Developments outside priority actions
- Multilateral platforms (cross-border payment systems that are multi-jurisdictional by design) are being considered for suitability for TA.
- A joint report by CPMI, BISIH, IMF, and World Bank identified challenges and approaches to establishing a multilateral platform (see CPMI-BISIH-IMF-World Bank 2023).
- Progress on multilateral platforms and other developments will be monitored and assessed for potential TA provision in the near term.

### The World Bank approach to cross-border payments TA — overall framing
- The World Bank’s cross-border payments TA approach adopts the Roadmap’s priority themes and identifies opportunities for TA to strengthen the impact of each theme.
- Approach envisages using and adapting consolidated TA programs to advance the Roadmap’s objectives by embedding new guidance, tools, and best practices in the World Bank’s TA delivery.
- TA aims to upgrade key infrastructure and strengthen and align institutional, legal, and regulatory underpinnings to directly impact the priority themes.
- Strategic initiatives such as Project FASTT aim to build on domestic FPS foundations to create interlinking opportunities and increase countries’ preparedness to onboard future multilateral initiatives on cross-border payments.
- The approach is premised on foundational work on payment system development: in the last 15 years, the World Bank has supported payment systems reforms in 120 countries through a range of financing and technical advice products and services.
- World Bank TA incorporates cross-border aspects and the G20 Roadmap’s considerations in long-standing programs such as AML/CFT TA and Identification for Development (ID4D).
- Global knowledge and convening activities will be adapted to integrate cross-border aspects at the forefront of payment system knowledge creation and dissemination.

### Delivery frameworks and scale
- TA will be delivered through established country engagement frameworks and funding mechanisms that have enabled an extensive payment system TA portfolio (approximately 80 countries supported each year, across all regions).
- These frameworks/mechanisms have built-in flexibility to steer resources in line with World Bank global engagements, including the G20 Roadmap, and conduct regular evaluation and review.

### Priority Theme 1 — Payment System Interoperability and Extension
- World Bank will incorporate critical enablers of cross-border payments in the design, development and/or procurement of new/upgraded RTGS and other payment systems. Examples include non-bank access, extended operating hours, and international communication standards (ISO 20022).
- World Bank will incorporate assessment of operational, policy considerations, and risks of extending operating hours based on building block 12 report and disseminate technical and operational approaches to overcome identified challenges (in line with Action 1c of the Roadmap).
- The World Bank will apply the CPMI best practices framework for self-assessment of access policies to key payment systems in the context of NPS TA (in line with Action 1c of the Roadmap).
- Project FASTT will scale up TA on fast payments:
  - Project FASTT aims at accelerating adoption of fast payments designed to foster and enable financial inclusion in low- and middle-income countries, including in continental Africa, and low-income South Asian countries.
  - Over the next 3-5 years, this program will support knowledge creation and dissemination, capacity building of central bank and FPS operators, and TA on FPS design and implementation, including regulation, oversight, governance, and technology.
  - Project FASTT will: (i) support central banks’/FPS operators’ preparedness for interlinking through appropriate FPS design; (ii) identify interlinking opportunities, support development of a business case, and prepare requirements for interlinking as well as provide implementation support; (iii) produce global knowledge products on technical aspects relevant to interlinking.
  - Project FASTT, ID4D, and G2Px are also actively involved in global and country initiatives on DPI. DPI was endorsed as a priority by G20 Leaders at the New Delhi Summit in September 2023.
  - With guidance from the G20 India Presidency, the World Bank developed the Global Partnership for Financial Inclusion (GPFI) G20 Policy Recommendations for Advancing Financial Inclusion and Productivity Gains Through Digital Public Infrastructure (World Bank, 2023).

- The World Bank will review the guidelines on regional integration of financial infrastructures (World Bank 2014) to incorporate recent experience and forthcoming guidance on interlinking and multilateral platforms for regional integration TA projects and regional fora deliberations and feasibility analyses.

### Priority Theme 2 — Legal, Regulatory, and Supervisory Frameworks
- World Bank will strengthen TA links to priority theme 2 to enable new entrants and innovative models within a level playing field and sound risk management.
- Relevant actions include:
  - (i) scaling up support for non-bank PSP regulation and supervision;
  - (ii) reviewing TA framework on payments oversight and PSP supervision to incorporate recent and emerging international guidance;
  - (iii) identifying and implementing approaches for enhancing information provided to end users, building on World Bank experience on remittances and financial inclusion and consumer protection TA.
- Modern know-your-customer frameworks will contribute to enabling the use of digital ID in the financial sector, including for cross-border payments.
- Through long-standing AML/CFT TA, World Bank will continue building countries’ capacity on risk-based regulation and supervision:
  - World Bank has engaged in National Risk Assessments in 114 countries thus far and follow-up capacity building TA.
  - The World Bank developed a financial inclusion product risk assessment module (FIRM) to guide countries in designing low-risk financial products that may benefit from simplified AML/CFT procedures; this tool is being delivered through a workshop and remote support.
  - Despite low demand thus far for safe payment corridor pilots, World Bank will continue raising awareness and assessing countries’ interest to conduct these pilots, based on the IMF-World Bank framework and World Bank methodology (unpublished).
  - World Bank plans to actively support FATF’s revision of the Travel Rule in FATF Recommendation 16.

### Priority Theme 3 — Cross-Border Data Exchange and Message Standards
- World Bank will strengthen TA links to priority theme 3 on two fronts:
  - Promote interoperability of digital ID and data exchange for cross-border payments by leveraging cross-sectoral collaboration within the World Bank.
  - Support adoption of a harmonized version of ISO 20022 where possible through payment system TA in collaboration with other partners.
- World Bank will work on integrating API harmonization considerations/guidance in its support for new and upgraded payment systems and open banking TA.

### Complementary country support
- World Bank’s broader financial sector work and cross-sectoral programs are complementary to Roadmap actions; these focus on complementary financial sector TA.
- Greenback programs and remittances digitalization:
  - Greenback 3.0 will focus on: (i) developing/improving digital remittance products/transaction account design to meet target population needs; (ii) raising target populations’ awareness and literacy; (iii) fostering electronic payment acceptance and the development of a digital payment ecosystem to enable recipients to make/receive digital payments.
  - This program complements the G20 Roadmap by covering the “last mile” through a demand-side and bottom-up approach.
  - In FY24, the World Bank will undertake a pilot and, based on the pilot lessons, extend the tool to at least two (2) large remittance recipient markets, covering in total at least three countries.
- Cross-sectoral approach (Box 2):
  - Roadmap challenges relate to broader development concerns including digitalization of small firms, financial inclusion of migrants, women and the poor, and identification.
  - World Bank provides TA coupled with project or budget support across interrelated topics including financial inclusion, payment system development, private sector development, digital economy, identification systems and efficient delivery of government payments.
- Targeted financial inclusion efforts:
  - Develop and roll out targeted financial inclusion efforts to close gaps and increase access to and usage of financial services, focusing on vulnerable segments such as women and MSMEs.
  - Leverage G2P payment digitalization initiatives (under G2Px) to increase access and use of products that meet recipients’ needs, including access to cross-border payment services where relevant.
- Research and innovation:
  - World Bank will continue supporting countries' research agendas on innovation, providing country-context framing, capacity building, analytical, technology and business architecture support (see Annex 1).
  - World Bank will contribute to global efforts on identifying approaches to understanding the implications of CBDCs on national and cross-border payment ecosystems by leveraging its Technology and Innovation Lab.
- Crypto-assets and stablecoins:
  - World Bank will support countries on regulation, oversight, and supervision of crypto-assets and stablecoin arrangements in line with international standards and guidance to ensure adequate powers, tools and resources to control crypto-asset risks and govern new forms of money and market infrastructures.

### Global knowledge, data, convening and partnerships
- World Bank will review its global knowledge and data program/agenda in light of cross-border TA and the G20 Roadmap’s Priority Themes.
- FY24–25 knowledge program is expected to focus on knowledge gaps and/or innovative topics, such as determinants of FX margins in remittances.
- RPW will be enhanced through a new interactive webpage.
- World Bank will continue to improve and collect relevant data for monitoring Roadmap targets, including through RPW, GPSS, Global Findex and Enterprise Surveys.
- Partnerships underpin TA delivery:
  - Build on long-standing partnerships with international organizations, standard setting bodies, and donors to amplify TA impact and disseminate global knowledge.
  - Leverage regional partners/fora for knowledge exchange and training, e.g., AMF, CEMLA, SADC’s Payment System Oversight Committee.
  - Standing fora (e.g., GRWG) and recurring events (e.g., GPW) will continue to offer platforms to discuss and disseminate knowledge and stimulate action on cross-border payment issues.

### Conclusions and operational notes
- TA is critical for helping achieve the G20 cross-border payments targets by the target date of 2027.
- IMF and World Bank TA programs will support policy themes underpinned by their respective mandates, institutional objectives, governance and delivery mechanisms.
- Cross-border payments TA will remain demand-driven and will be agreed with and requested by IMF and World Bank member countries.
- TA will be delivered consistent with both institutions’ provision frameworks and will require appropriate funding; the IMF and World Bank will explore existing and new TA funding to assist countries.
- Collaboration and coordination are key: IMF and World Bank will benefit from collaboration with the FSB, CPMI, and central banks, among others, who can provide technical expertise, participate in missions, present at regional or global workshops/conferences and contribute to analytical work.
- Coordination approaches may include jointly delivering products/activities or maintaining open channels of communication to ensure consistency.
- TA approaches are designed to dynamically adapt to country needs and the evolving cross-border payments landscape and to feed into the Roadmap’s development.
- The IMF plans on re-evaluating internally its capacity development approach in 2025 to ensure continued relevance and incorporation of lessons learned.
- World Bank will incorporate a regular assessment of its TA approach in end- and beginning of fiscal year processes.
- Experiences and lessons learned from IMF and World Bank TA will contribute to implementation and future development of the Roadmap.
- Note: In the case of focus areas led by LEG, further TA activities are subject to the availability of funds and the outcome of discussions with external donors.

*IMF and World Bank content unit: ppea2023062 - 43.      Developments outside the priority actions, particularly in cross-border multilateral*

### Annex I. Summary of the IMF and World Bank Stocktake

### Annex I. Summary of the IMF and World Bank Stocktake

### Overview
- Joint stocktake by the IMF and the World Bank covered any TA that involved cross-border payments, including activities at individual country level and regional activities such as regional workshops or seminars.
- The analysis informed identification of TA priorities and opportunities to support cross-border payments.

### Outcome of the IMF Stocktake
- The majority of ongoing IMF TA featured a domestic element; a small minority solely focused on cross-border payments.
- TA Missions took place across all regions (referenced as Figure 5 in the source).
- TA on legal, regulatory, and supervisory frameworks represents half of the total TA offered.
- Requests for CBDC assistance TA commonly include exploration of cross-border use of both retail CBDC (rCBDC) and wholesale CBDC (wCBDC) to facilitate cross-border payments.
- The cross-border implications of CBDC and the potential of digital currencies to tackle existing pain points of cross-border payments were explored in 6 countries and two regional workshops in FY23.

- Breakdown by type (from early 2021 to April 2023): recent or ongoing IMF TA are almost evenly split between bilateral TA missions and regional seminars/training/workshops (referenced as Figure 6 in the source).

- Examples and highlights:
  - Bilateral TA has included assistance for modernization of domestic payment systems laws, cross border usage of CBDC, safeguarding the integrity of the financial system, and strengthening AML/CFT frameworks for virtual assets and virtual asset service providers to address ML/TF risks arising from cross-border payments.
  - Regional seminars, workshops and training topics included wholesale and retail CBDCs for cross-border payments, cross-border use of CBDC, interlinking of FPS, legal challenges in cross-border payments, and strengthening AML/CFT frameworks for regulation of virtual assets and virtual asset service providers (including to improve the implementation of the travel rule).
  - In FY23 and FY24, the IMF provided or is providing TA on addressing new entrants brought into the payment landscape by fintech such as non-bank payment service providers (and especially non-bank foreign providers of payment services) through bilateral TA in four countries; this work included amendments to the legal framework.
  - The IMF provided regional seminars in two regional training centers on legal challenges to the modernization of payment system laws and cross-border payments (e.g., legal uncertainties, laws harmonization, settlement finality and conflict of laws).
  - TA on AML/CFT and related cross-border payment issues was designed to strengthen AML/CFT legal and regulatory frameworks, strengthen risk-based supervision, address correspondent banking relationships pressures, and combat illicit financial flows. It has been provided or delivered both at a country level and regionally.

#### Annex I. Box 1 — Cross-Border Payments TA to Member Countries of the Capacity Development Office in Thailand
- One-day regional workshop on cross-border payments for member countries of the Capacity Development Office in Thailand (CDOT), co-hosted by the State Bank of Vietnam (SBV) in Hanoi, Vietnam during March 2023.
- Workshop aim: deepen technical understanding of cross-border payments; presentations covered technological and macro-financial aspects and included guest speakers from central banks of Thailand, the Philippines, and Singapore.

- IMF Presentations (three, each followed by Q&A):
  - Presentation 1: recent development of cross-border payments landscape and policy implications, including the G20 Roadmap, different models and approaches to improve cross-border payments such as Fast Payment Systems (FSPs) interlinkages and multi-currency CBDCs, macro-financial risks such as capital flow volatility and currency substitution, and the IMF’s conceptual blueprint of cross-border payment and contracting (XC) platforms.
  - Presentation 2: potential risks to financial integrity posed by cross-border payments and CBDCs and necessary mitigation measures.
  - Presentation 3: technological and cybersecurity issues related to cross-border payments.

- Peer-Learning:
  - Monetary Authority of Singapore (MAS) provided overview and insights to MAS’s cross-border payment projects including Project Nexus on FPS linkages and Project Dunbar on multi-currency CBDCs.
  - Bank of Thailand (BOT) shared experiences on linking Thailand and Singapore’s FPSs - PromptPay and PayNow.
  - Bangko Sentral ng Pilipinas (BSP) outlined cross-border payments initiatives in the Philippines and presented on exploration of a wholesale CBDC.
  - Panel discussion topics: management and supervision of cross-border payment platforms, measures to mitigate macro-financial risks.
  - Common themes: necessity to collaborate with stakeholders, central bank role in providing infrastructure to support innovation, and multilateral coordination of policies and regulations to ensure success of cross-border payments projects.

### Outcome of the World Bank Stocktake
- Conducted in response to Action 14a) of the revised G20 Roadmap; stocktake focuses on fiscal year 2023 (FY23).
- World Bank TA programs provide a framework for incorporating cross-border considerations within comprehensive TA tailored to country needs.

#### Remittances TA
- Remittances TA implements the 2007 CPSS-World Bank General Principles (GPs) and supports priority themes 1 and 2 by helping countries design and implement:
  - regulatory reforms and frameworks for authorization and supervision of remittance service providers (RSPs);
  - payment schemes for cross-border retail payments and remittances;
  - remittance recipients’ awareness raising and financial literacy programs.
- In FY23, the World Bank provided TA in improving the market for international remittances through 19 country projects and three regional/subregional projects.
- Project Greenback aims at increasing the efficiency of remittances market through a demand-side approach by promoting financial literacy and awareness campaigns locally, and interacting with RSPs to encourage demand-driven best practices for national scale application.
  - Since its launch, Project Greenback has been implemented in 11 countries and remittance champion cities.

#### TA on AML/CFT
- World Bank helps countries assess and mitigate ML/TF risks and build capacity for risk-based regulation and supervision.
- ML/TF National Risk Assessments, including assessment of ML/TF risks in the remittance sector, guide countries in a risk-based approach to AML/CFT and are complemented with capacity building.
  - In 2023, the World Bank conducted (or is in the process of conducting) 10 assessments; thus far, 114 countries have been assessed.
- The World Bank developed FIRM to guide countries in designing low-risk financial products that may benefit from simplified AML/CFT procedures and provides training and remote support.
- AML/CFT TA also supports remittance corridor solutions.
  - In FY23, the World Bank led an initiative that explored establishing a humanitarian payment facility for Afghanistan.
  - Earlier, a similar initiative in the United Kingdom-Somalia remittance corridor led to the establishment of payment systems in Somalia and receiving remittances digitally.
- The World Bank coauthored the framework for safe remittance corridor risk assessments with the IMF; the World Bank later developed a practical methodology (unpublished draft) and is exploring pilots.
- The World Bank supported integration of the risk-based approach in the FATF Recommendations, including applying simplified customer due diligence measures in low-risk transactions; this work is directly relevant to international remittances.
- The World Bank has been actively involved in FATF’s technical work related to wire transfers, money and value transfer service providers, and virtual assets, and recently co-led the FATF initiative for unintended consequences of FATF standards.

#### National Payments System (NPS) TA
- NPS TA supports comprehensive NPS reforms across nine pillars (referenced as Figure 6) and underpins domestic foundations of cross-border payments.
- Domestic competing priorities, lack of international coordination, divergent legal and regulatory frameworks across jurisdictions, technical differences and restrictions rooted in existing domestic system design contribute to cross-border payment frictions.
- By addressing these domestic issues, NPS TA directly contributes to the Roadmap’s objectives; compared with remittances TA, NPS TA has broader scope including other cross-border retail payments and wholesale payments.
- In FY23, the World Bank provided TA in modernizing regulatory frameworks through 30 country projects, fostering alignment to international standards, broadening access to payment systems, and enhancing consumer protection.
  - This TA supports Roadmap areas B (building blocks 4, 5 and 8), C (building blocks 10 and 13), and E (building blocks 17-19), and priority theme 2.
  - Example: In Eastern Europe, the World Bank supports EU candidate and potential candidate countries in transposing the EU acquis on payment services and advancing towards SEPA readiness.
  - Examples of DPF use to accompany policy dialogue and/or TA to underpin broader access to payment systems for non-banks: Indonesia,31 Mexico32 and the Philippines33.
  - In selected countries in East and South Asia, Northern Africa, Sub-Saharan Africa, and Latin America, the World Bank through NPS TA assists countries in developing new regulatory frameworks on open banking and crypto assets.
- In FY23, the World Bank supported countries in developing and upgrading payments infrastructure (e.g., RTGS upgrade, FPS development) through 31 country projects.
  - Objectives: facilitate non-bank direct participation and tiered arrangements, extended operating hours, efficient liquidity managements, adoption of ISO 20022, and application of new technologies (e.g., APIs).
  - These activities support Roadmap areas C (building blocks 10, 12, 13), D (building blocks 14, 15), and E (building block 17), themes 1 and 3 of the revised roadmap.
  - RTGS upgrade is part of future-proofing the NPS in several countries across Sub-Saharan Africa, East and South Asia, Latin America and the Caribbean, and the Middle East.
  - FPS implementation aims to benefit both domestic and international payments; examples include support in the Western Balkans and West Africa exploring interlinking arrangements and/or a common platform.
  - The World Bank published a report on considerations and lessons for the development and implementation of FPS (World Bank 2021b) as part of broader resources on FPS.
- NPS TA includes exploration and experimentation of CBDC designs that enhance efficiency of domestic and cross-border payments, providing framing of CBDC within the country context/NPS, capacity building, analytical, technology and business architecture support, in collaboration with the World Bank’s ITS Technology and Innovation Lab.
  - The World Bank published a guidance note (World Bank 2021a) for central banks and relevant public authorities considering CBDC issuance.
  - Focus on interoperability with existing infrastructures and cross-border use cases supports roadmap’s area E (building block 19), and priority theme 1.

#### Digital and Financial Market Integration
- World Bank increasingly provides cross-border payments TA as part of regional economic and financial integration projects.
- TA focuses on (i) aligning regulatory frameworks and business practices, and (ii) developing and/or strengthening cross-border payment arrangements – from interlinking arrangements to new multilateral platforms.
  - This TA supports all three priority areas and is directly relevant to building blocks 13 and 17.
- In FY23, there were eight regional projects with a payments/finance component, covering parts of Sub-Saharan Africa (East, West, and Southern Africa as well as Africa-wide), the Eastern Caribbean, Western Balkans and the Pacific Islands.
- Example: Digital Economy for Africa (DE4A) Initiative aims to ensure every individual, business, and government in Africa will be digitally enabled by 2030 in support of the African Union’s “Digital Transformation Strategy for Africa.”
  - The Africa-wide Regional Payment Platform (AWPP) is one of two goals under the Digital Financial Services (DFS) pillar of DE4A and a key component of the African Continental Free Trade Area (AfCFTA).
  - World Bank TA supports AWPP vision and strategy formulation as well as convening.

#### ID4D and Digital Public Infrastructure
- Cross-border payments TA benefits from synergies with World Bank programs on digital ID and digital public infrastructure; the ID4D initiative provides global knowledge and TA on digital ID and civil registration ecosystems.
- Mutual recognition and interoperability of identification systems across countries drive faster, more efficient cross-border payments.
  - These activities support priority theme 3 of the revised roadmap, and also support priority themes 1 and 2.
- In FY23, there were five regional projects and technical assistance activities on cross-border use of ID contemplating financial sector use cases including remittances, covering parts of Sub-Saharan Africa, ASEAN, and the South Pacific.
- Example: West Africa Unique Identification for Regional Integration and Inclusion (WURI) Project is strengthening/harmonizing legal and enabling environment within and between countries, upgrading/establishing robust foundational ID systems, and aims to promote use of IDs for cross-border service delivery (e.g., authentication for social transfer payments, financial transactions, and labor mobility).

#### Global Knowledge and Convening
- The World Bank monitors remittance costs and coordinates global calls to action for reducing remittance costs and increasing financial inclusion.
- World Bank’s RPW database covers 367 country corridors and is used to measure progress towards global cost reduction objectives and targets for the cross-border payments roadmap.
- The World Bank manages additional databases for monitoring roadmap targets, including the Global Payment System Survey, Global Findex, and Enterprise Surveys.

*Source: Annex I. Summary of the IMF and World Bank Stocktake (ppea2023062 - Annex I. Summary of the IMF and World Bank Stocktake)*

### 13.      Global knowledge and convening activities are instrumental to cross-border TA. In

### 13. Global knowledge and convening activities are instrumental to cross-border TA. In

### Global convening and knowledge-sharing activities
- In FY23, the World Bank and Bank-al-Maghrib (Central Bank of Morocco) co-organized the GPW in Marrakech, Morocco, in partnership with the CPMI, Arab Monetary Fund (AMF), and the Center for Latin American Economic and Monetary Studies (CEMLA).
- Central banks representing 75 jurisdictions participated in the program.
- The GPW program included a session dedicated to cross-border payments, and additionally featured regional meetings on topics of common interest, including cross-border payments.
- The GRWG meets twice annually around the Spring and Annual Meetings of the IMF/World Bank.
- GRWG participants include central banks and other relevant regulators, providers, international organizations and SSBs.

### Annex II — Targets for the Cross-Border Payments Roadmap (summary by challenge and payment sector)
- Reference: See FSB (2021) for details.

- Definitions:
  - Wholesale payments are defined as payments with a value of USD 100,000 or more.
  - Retail payments are defined as payments with less than USD 100,000 other than remittances.
  - The retail market segment includes B2B, P2B/B2P and P2P other than remittances.
  - Due to the difficulty of estimating average costs across the wholesale market where transactions are typically not individually priced, a target has not been set for this segment.

- Cost
  - Wholesale: No target set.
  - Retail: Global average cost of payment to be no more than 1%, with no corridors with costs higher than 3% by end-2027.
  - Remittances: Reaffirm UN SDG: Global average cost of sending $200 remittance to be no more than 3% by 2030, with no corridors with costs higher than 5%.

- Speed
  - Wholesale:
    - 75% of cross-border wholesale payments to be credited within one hour of payment initiation or within one hour of the pre-agreed settlement date and time for forward-dated transactions, by end-2027.
    - For the remainder of the market to be within one business day of payment initiation, by end-2027.
    - Payments to be reconciled by end of the day on which they are credited, by end-2027.
    - Footnote: For this purpose, a wholesale payment is considered initiated at the moment of entry into a payment infrastructure or correspondent bank as defined by their applicable rules.
    - Footnote: The settlement date and time are agreed and contracted between the two counterparties of the transaction at the point the transaction is agreed. On this date and time, there will be an exchange of payments between counterparties in each of the currencies contracted for exchange.
    - Footnote: In cases where the hours or dates of the business days in the locations where the initiation and receipt do not coincide, the payment should be credited within a period that, in each location, includes one business day.
  - Retail:
    - 75% of cross-border retail payments to provide availability of funds for the recipient within one hour from the time the payment is initiated and for the remainder of the market to be within one business day of payment initiation, by end-2027.
    - Footnote: For this purpose, a retail or remittance payment is considered initiated when the payment order is received by the payer’s payment service provider. The transaction is considered complete once the recipient can access the funds.
  - Remittances:
    - 75% of cross-border remittance payments in every corridor to provide availability of funds for the recipient within one hour of payment initiation and for the remainder of the market to be within one business day, by end-2027.

- Access
  - Wholesale:
    - All financial institutions (including financial sector remittance service providers) operating in all payment corridors to have at least one option and, where appropriate, multiple options (i.e. multiple infrastructures or providers available) for sending and receiving cross-border wholesale payments by end-2027.
  - Retail:
    - All end-users (individuals, businesses (including MSMEs) or banks) to have at least one option (i.e. at least one infrastructure or provider available) for sending or receiving cross-border electronic payments by end-2027.
  - Remittances:
    - More than 90% of individuals (including those without bank accounts) who wish to send or receive a remittance payment to have access to a means of cross-border electronic remittance payment by end-2027.

- Transparency
  - All payment service providers to provide at a minimum the following list of information concerning cross-border payments to payers and payees by end-2027:
    - total transaction cost (showing all relevant charges, including sending and receiving fees including those of any intermediaries, FX rate and currency conversion charges);
    - the expected time to deliver funds;
    - tracking of payment status;
    - terms of service.

*IMF AND WORLD BANK APPROACH TO CROSS-BORDER PAYMENTS TECHNICAL ASSISTANCE — Chapter excerpt*

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_Source: https://www.imf.org/-/media/files/publications/pp/2023/english/ppea2023062.pdf_