The U.S. Faster Payments Council (FPC), a membership organization devoted to advancing safe, easy-to-use faster payments in the United States, has announced the publication of a new report, Interoperability: Bridging the Cross-Border Gap in a Faster Payments World. The report was developed by the FPC Cross-Border Payments Work Group and sponsored by Mastercard.

The report examines the end-to-end cross-border payment journey through the lens of interoperability, exploring why advances in faster payments, ISO 20022 adoption, and emerging digital settlement models have yet to fully overcome the fragmentation, cost, and operational complexity associated with moving money across borders. ISO 20022 is the structured financial messaging standard to which SWIFT completed migrating cross-border payments in 2023. Within the United States, instant payments now run domestically on two rails—the RTP network operated by The Clearing House since 2017 and the Federal Reserve's FedNow Service, launched in July 2023—while cross-border journeys continue to span a patchwork of systems, standards, and jurisdictions. Improving these journeys is also an established global policy priority: the G20 roadmap for enhancing cross-border payments, prepared by the Financial Stability Board, set quantitative targets for 2027 covering cost, speed, access, and transparency. Interoperability is considered across the first mile, middle mile, and last mile, along with the role liquidity plays throughout the payment journey.

"Interoperability is the foundation of truly seamless cross-border payments—connecting fragmented payment systems so money can move as easily across borders as it does domestically," said Mark Majeske, SVP of Faster Payments at Alacriti and Chair of the FPC Cross-Border Payments Work Group. "It reduces friction, lowers costs, and ultimately makes global commerce faster, more inclusive, and more accessible."

The report evaluates two emerging architectural approaches to cross-border interoperability. Shared connectivity models, such as Project Nexus—a Bank for International Settlements (BIS) initiative with the central banks of Indonesia, Malaysia, the Philippines, Singapore, and Thailand that aims to interlink domestic instant payment systems into a regional network targeted to be operational by 2026—seek to link domestic payment systems through common messaging, routing, and participation frameworks, while shared ledger models, including stablecoins and deposit tokens, enable settlement through common digital infrastructure. Stablecoins are digital tokens typically pegged to a sovereign currency, and deposit tokens are tokenized representations of commercial bank deposits on shared digital ledgers. The report assesses these approaches based on their potential impact on cost, speed, access, liquidity efficiency, security, and consistency.

"The future of cross-border payments is not about a single network or technology," said Jonathan Holland, SVP–Head of Digital Currency Product Management at M&T Bank and Vice Chair of the Cross-Border Payments Work Group. "It is about enabling systems, standards, and participants to work together seamlessly. Interoperability is the bridge that will help make that vision a reality."

While both approaches demonstrate progress, the report identifies several areas where additional work is needed to achieve greater end-to-end interoperability. These include liquidity and foreign exchange coordination, compliance data portability, governance alignment, participation across markets and institutions, and first- and last-mile access. The report concludes that progress will likely involve multiple approaches working across different corridors and use cases rather than reliance on a single architecture.

"This report demonstrates what the FPC does best, bringing members together to examine complex issues such as how greater interoperability can improve the cross-border payment experience," said Reed Luhtanen, FPC Executive Director and CEO. "By drawing on the expertise and perspectives of our members, the report provides valuable insight into emerging approaches, the challenges that remain, and the considerations that will help shape continued progress in cross-border payments."