The Bank for International Settlements’ proposed harmonization requirements for cross-border payments have not struck the right balance, and if mandated in their current form, would make cross-border payments slower, more expensive and less accessible than they are today, the American Bankers Association Wednesday comment letter from ABA, according to a Wednesday comment letter from the American Bankers Association, its transaction banking subsidiary BAFT and the Clearing House.
The BIS Bank for International Settlements’ Committee on Payments and Market Infrastructures is currently working to facilitate a harmonized adoption and use of ISO 20022 for cross-border payments. In their comments, the groups said that practical considerations must be taken into account when developing those standards. Specifically, the harmonized standards should not give preference to business identifier codes or SWIFT services; better account for the practical limitations and needs of end users, banks and market infrastructures; and recognize existing legal requirements for data that must be included in payment messages and the needs of financial crime stakeholders, they said.
Among their concerns, the associations said ISO 20022 harmonization should be encouraged, not mandated; that the timeline for public comment puts U.S. implementation at risk; and there is ambiguity on the scope of the requirements as they pertain to non-ISO 20022-based systems. The groups also noted that while they do not have specific concerns with some of the proposed requirements, many others contain potentially serious implementation problems. “For some of these requirements we request that they be issued only as recommended guidelines for user communities to consider,” they said.