Connecting Digital Economies: Policy Recommendations for Cross-Border Payments

The report argues that while digital payments are central to the growth of global e-commerce, they are hindered by protectionist market barriers, diverging technical standards, and uncoordinated oversight. It recommends that policy-makers adopt 'national treatment' for foreign providers, prohibit forced data localization, and embrace international standards like ISO 20022. The document also emphasizes the need for public-private partnerships to combat rising cyber-risks and suggests the creation of regional payment councils and multilateral oversight coordination, such as the Global Financial Innovation Network (GFiN), to streamline licensing and improve competition.

• Protectionist measures, including domestic processing mandates, forced data localization, and equity requirements, prevent payment service providers from achieving the economies of scale necessary to reduce transaction costs.
• Data localization requirements are often misguided and can actually decrease cybersecurity by increasing the number of potential vulnerabilities in a data system.
• The adoption of the ISO 20022 messaging standard by central banks can reduce cross-border friction by allowing for richer transaction information and incentivizing the broader ecosystem to modernize.
• Open banking serves as a viable alternative to data localization for governments wanting to foster domestic competition, as it lowers entry barriers for new providers without cutting them off from international cloud services.
• Cross-border payments are highly vulnerable to cyber-risks, with phishing accounting for over 90% of all global cyberattacks.
• The current mutual legal assistance treaty (MLAT) model for law enforcement access to cross-border data is too slow; the US CLOUD Act is proposed as a more efficient model for international data sharing.
• A lack of international coordination in retail payment supervision creates regulatory redundancies that act as a barrier to entry, particularly for smaller firms.
• The Global Financial Innovation Network (GFiN) demonstrates the potential for multilateral coordination by sharing best practices and streamlining cross-border testing for FinTechs.

APA

World Economic Forum (2020). Connecting Digital Economies: Policy Recommendations for Cross-Border Payments. http://www3.weforum.org/docs/WEF_Connecting_Digital_Economies_2020.pdf

Chicago

World Economic Forum. Connecting Digital Economies: Policy Recommendations for Cross-Border Payments. 2020. http://www3.weforum.org/docs/WEF_Connecting_Digital_Economies_2020.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Connecting Digital Economies: Policy Recommendations for Cross-Border Payments |date=June 2020 |url=http://www3.weforum.org/docs/WEF_Connecting_Digital_Economies_2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2020connecting, author = {{World Economic Forum}}, title = {{Connecting Digital Economies: Policy Recommendations for Cross-Border Payments}}, institution = {World Economic Forum}, year = {2020}, month = jun, url = {http://www3.weforum.org/docs/WEF_Connecting_Digital_Economies_2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }