MUMBAI: The US has expressed reservations in regards to the worldwide linking of home quick funds just like the UPI to make international transactions quicker and cheaper.
“Today’s consumers and businesses can generally send a payment anywhere in the world, but they all seem to want faster and cheaper global payments, just like we always want faster flights and cheaper airfares.However, I am not entirely convinced that interlinking arrangements will necessarily deliver on those goals,” mentioned Christopher J Waller, member of the board of governors for the Federal Reserve System.
“There is no silver bullet that increases speed and efficiency without trade-offs. Unless new solutions are found, interlinking fast payment systems might increase the risk-management burden for banks that participate in them. That is, legal, compliance, and operational considerations are critical to the discussion of the promise and challenges of interlinking,” mentioned Waller. He was talking on the Global Fintech Fest right here on Wednesday.
The Fed has launched its personal quick payment community FedNow Service. “We are still at the beginning of a multiyear journey of establishing a ubiquitous network covering the majority of institutions in our country. Variation around the world in domestic fast payment network adoption means that the value of globally interlinked systems is not yet clear,” mentioned Waller.
The governor mentioned technical feasibility and authorized points could be managed as some bilateral preparations have reveals, however every hyperlink wants advanced negotiations and bilateral hyperlinks are impractical for international scale. While multilateral setups provide efficiencies, they’re nonetheless resource-intensive. However, RBI government director P Vasudevan was nonetheless hopeful of linking India-US quick funds. “You have given a positive hope that we will see the linkage happen between FedNow and UPI even if it may take a little while,” Vasudevan mentioned, including that it’ll make remittances cheaper and quicker.
“Today’s consumers and businesses can generally send a payment anywhere in the world, but they all seem to want faster and cheaper global payments, just like we always want faster flights and cheaper airfares.However, I am not entirely convinced that interlinking arrangements will necessarily deliver on those goals,” mentioned Christopher J Waller, member of the board of governors for the Federal Reserve System.
“There is no silver bullet that increases speed and efficiency without trade-offs. Unless new solutions are found, interlinking fast payment systems might increase the risk-management burden for banks that participate in them. That is, legal, compliance, and operational considerations are critical to the discussion of the promise and challenges of interlinking,” mentioned Waller. He was talking on the Global Fintech Fest right here on Wednesday.
The Fed has launched its personal quick payment community FedNow Service. “We are still at the beginning of a multiyear journey of establishing a ubiquitous network covering the majority of institutions in our country. Variation around the world in domestic fast payment network adoption means that the value of globally interlinked systems is not yet clear,” mentioned Waller.
The governor mentioned technical feasibility and authorized points could be managed as some bilateral preparations have reveals, however every hyperlink wants advanced negotiations and bilateral hyperlinks are impractical for international scale. While multilateral setups provide efficiencies, they’re nonetheless resource-intensive. However, RBI government director P Vasudevan was nonetheless hopeful of linking India-US quick funds. “You have given a positive hope that we will see the linkage happen between FedNow and UPI even if it may take a little while,” Vasudevan mentioned, including that it’ll make remittances cheaper and quicker.
