BIS Reveals Best Practice FPS Design Specifications
(13 March 2024 – Switzerland) As payments systems evolve rapidly and fast payment systems (FPS) emerge as a key innovation, the Bank for International Settlements (BIS) investigates key design features to encourage faster adoption.
Fast payments have achieved mass adoption in some markets but not in others with adoption likely hinging on particular design characteristics of different FPS. Adoption of fast payments tends to be more widespread when the central bank owns the FPS, when non-banks participate and when the number of use cases and cross-border connections is greater. The insights presented by the BIS help inform the design and development of FPS and other payment infrastructures.
The G20 has previously stressed that interlinking of FPS, with their real-time and 24/7 operational capabilities remains among “priority actions” to help improve cross-border payments and remittances by 2027.
“Our results suggest that adoption of fast payments indeed depends on design elements in our categorisation. FPS transactions per capita are higher when there is governance, rules and user focus in terms of central bank ownership of an FPS, participation by non-bank payment service providers (PSPs) and a greater number of use cases and cross-border connections” stated BIS Senior Economist Priscilla Koo Wilkens.
“While the uptake of fast payments is influenced by many country-specific characteristics beyond FPS design, the insights from this analysis are helpful for jurisdictions considering the design and development of an FPS” commented BIS Economist Vatsala Shreeti.
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