Citi Payments Perspectives

6 Treasury and Trade Solutions Citi Payments Perspectives Global Initiatives Payments Infrastructure Developments Regional Developments (North America) FSB Target Metrics A foundational step in the FSB roadmap for enhancing cross-border payments consists of setting quantitative global targets for addressing the challenges of cost, speed, transparency, and access faced by cross-border payments. In May 2021, the FSB issued a consultation setting out targets which: • Describes the principles and key design features underpinning the targets and target metrics • Proposes three market segments (wholesale, retail, and remittances) for which targets will be set • Considers factors in setting the targets • Proposes a small number of high-level simple targets that are focused on end users Challenge Payment Wholesale Retail (e.g., B2B, P2B/B2P, other P2P 3 ) Remittances Cost No target set. Global average cost of payment to be no more than 1%, with no corridors with costs higher than 3% by end-2027. 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 75% of cross-border wholesale payments to be created within one hour of payment initiation or within one hour of the pre-agreed settlement date and time for forward-dated transactions and 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. 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. 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 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. 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. 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 for 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; and terms of service. Figure: Targets for the Cross-Border Payments Roadmap (Source: FSB). Continued � Global Initiatives Financial Stability Board (FSB) Enhancing Cross-Border Payments Roadmap Emerging Payments and Digital Assets Payments Infrastructure Developments ISO 20022 SWIFT Transformation Instant Payments Financial Market Infrastructure (FMI) Interlinkage Initiatives Regional Developments (North America) Immediate Cross-Border Payments (IXB) TCH Request for Pay (RFP) Bill Pay Latest on Fed/CHIPS ISO Timelines Lynx — Canadian High-Value Payment System Glossary