ECB Sees Up to 4% Trade Boost with Interconnected Instant Payments
The European Central Bank (ECB) has released a report highlighting the potential benefits of interconnected immediate payment systems across regional blocks. According to the ECB, greater interconnection between these blocks could raise trade exchanges between regions by up to 4%, which is equivalent to more than half the effect of a free trade agreement.
The report notes that the global network of instant payments is organized around regional blocks, with a notable weight of national solutions like Bizum in Spain. However, North America remains practically isolated from these networks due to the predominance of traditional banking in much of the operations carried out in that area.
Smaller countries or those that bear higher costs in cross-border payments would be the ones that benefit the most from a better-connected immediate payment network. The report highlights that certain areas of Africa and the Middle East would register the greatest potential gains, also due to the weight of remittance flows directed towards these regions.
The integration of high-value payments would provide significantly greater advantages, as most transactions linked to international trade are settled through high-value payments. However, significant brakes persist for the expansion of FPS between blocks, such as the lack of compatibility between messaging standards and different settlement assets.