If payments is just transferring a file electronically between a sender and a
recipient these days, why is it so darned complicated?
Bearing in mind, the internet connects everyone and everything
electronically, how come we have so many disparate payments infrastructures?
From retail to wholesale payments, clearing and settlement, we do have a bit of
a worldwide mesh.
The DTCC, Chips, Fedwire, Vocalink, Equens, STEP2, TARGET2,
Euroclear, Clearstream, LCH.Clearnet, BOJ-NET, CLS, MasterCard, Visa … now I
know I’m mixing up a lot of stuff in that line but it’s far from exhaustive.
There are literally hundreds of processors involved in our payments processes
but surely we should be moving towards a single,standardised pipe around the
world for payments, clearing and settlement?
That’s what we have today as a baseline platform for technology, the
internet, so why not for payments?
There are few examples of global processors today. I guess the ones that
immediately come to mind would be CLS, SWIFT, Visa, MasterCard and PayPal.
Most banks, citizens and corporates can pretty much hook up to one of those
somewhere around the world and make a payment to the other side of the world.
But why is the rest of our payments processing, clearing and settlement
structures so fragmented?