A common settlements currency, aligned motivations and a common data standard are among the enablers of success for regional payments integration, according to new research from SWIFT Institute.
The research paper, by Dr. Leo Lipis and Colin Adams, compares nine different regional payments projects, examining the factors behind their success.
Each system was evaluated based on a rubric, assessing enablers, disablers and success factors, and ranked in their competitiveness. The West African Economic and Monetary Union (WAEMU) and the Single Euro Payments Area (SEPA) came out on top as the most advanced systems in terms of integration.
The research found that there are five major enablers of success: Linkage of payments integration to a political goal; common currency or comment settlement currency; a centralised governance structure; a common data standard; and aligned motivations of the different stakeholders involved.
This type of evaluation tends to favour those systems that pursue tighter integration, and that are more advanced in the process of regional cooperation.
Although this tight integration is still rare, the paper found that a number of regions are on their way to achieving it, and an increasing number of countries are looking to start integration projects.
Peter Ware, director of SWIFT Institute said: “The latest SWIFT Institute research provides a clear view of the enablers and disablers of regional payments integration. It helps to define and set benchmarks for success including the adoption of common standards and technical guidelines for payments projects.”
“With this overview, countries can come together and integrate their payment systems in a variety of ways that can improve economic strength and cooperation for all participants.”
