Speech Inge van Dijk - Shaping Payments Innovation, on 15th Conference on Payments and Market Infrastructures, Ohrid 29 June 2023 

Good morning everybody.

I would like to join Governor Bezhoska in giving you all a warm welcome to this conference which we are honoured to organise together with the National Bank of North Macedonia.

Our long partnership dates back to the late 1990s. At that time the Dutch-led IMF constituency increased substantially to thirteen countries, many of which were in transition from a state-run to a market-based economy. De Nederlandsche Bank had the opportunity to provide bilateral assistance to the central banks of these countries, among them also North Macedonia. Throughout the years, payments has proven and continuous to be an important topic on our agenda, and today’s agenda only reconfirms this.

This year we are celebrating the 15th edition of the annual Ohrid conference. And what a pleasure that we can conduct this can celebration in-person following the pandemic. And how appropriate that we have gathered here in Ohrid. Known as the Jerusalem of the Balkans, due to the fact that there were once no less than 365 chapels in this city. One for every day of the year. No wonder that it was also an important place of pilgrimage, of reflection. A place where new styles of frescoes were invented, and some even argue that Ohrid is the cradle of the Renaissance. A most fitting illustration of how important the exchange of ideas and information is. Or to put in economic terms: cooperation is never a zero-sum game.

The recent crises have illustrated that a lack of cooperation might even be worse than a zero-sum game: its early days serve as a stark reminder that, in our globalised economies, inward-looking policies almost always lead to a negative-sum game. It most definitely pays to cooperate.  Europe, while under attack, has had to re-invent itself in terms of co-operation, and is coming out stronger.

In the world of payments, technological developments, digitalisation and globalization are the dominant driving forces.  They offer many opportunities in our quest for robust, secure and innovative payments. Also here, cooperation is key to reap the potential benefits. In this context I like to mention the migration to ISO20022.

The ISO20022 messaging standard provides a common and most rich language that can be used for every kind of financial transaction. Eurosystem’s Target services migrated successfully to this standard earlier this year, while the Eurozone market who has been SEPA-compliant ever since 2014, is upgrading to the 2019 version of ISO20022 by the end of this year. Many countries around the world are implementing or have implemented this ISO standard, paving the way for the future.

Cross-border payments sit at the heart of international trade and economic activity. However, for too long cross-border payments have faced four particular challenges: high costs, low speed, limited access and insufficient transparency. Faster, cheaper, more transparent and inclusive cross-border payments will have widespread benefits for supporting economic growth, international trade, global development and financial inclusion. Sending a payment, whether as a citizen or a business to the other side of the world in just a few hours at a fraction of today’s pricing. That is the goal to be achieved by 2027.

In 2020 the G20 Leaders endorsed these goals in the X-Border Roadmap, and since then much has been accomplished by the CPMI and the FSB in laying the foundations through the necessary stocktakes and analyses for the 19 so called ‘ Building Blocks’. In the next phase, the programme will move to practical implementation, focussing on three themes: interoperability, regulatory framework and harmonized data and message standards. The coming years will be important to fully leverage the potential to make cross-border payments faster, cheaper and more transparent.

Also here, cooperation will be key to reap the potential benefits. Cooperation between the authorities to harmonize supervisory frameworks, but especially with all market parties involved in the financial industry, who need to make this happen.

Let me now zoom in on European payments. Large technology companies, along with specialist FinTech companies, have become more and more active in the payments chain, challenging the traditional role of banks in the field of payments already for several years now. Europe needs to find an answer to these challenges. How do we safeguard the robustness and accessibility of payments for all European citizens in the face of these developments?

Further integration of the European payments market is a necessary step to build a stronger Europe. In a traditionally fragmented market, this is not so straightforward, however.

In my former life I was responsible for the SEPA development and corporate implementation across Europe for a large international Dutch bank. And I can assure you it was challenging. Setting out the strategy to harmonize and standardize was a tough decision to make, given the investments involved, but connecting all market parties end to end to ISO20022 is one the most challenging operational processes I have had to implement. It was extra complicated because there was no real benefit for the public in my home country.

However, ever since the implementation of SEPA we have in the Netherlands witnessed much innovation. Such as the implementation of instant payments in 2019 and QR codes on top of this new giro rails, allowing for easy home delivery payments.

The technological rails SEPA has provided, has not only harmonised European payments leading to more speed and efficiency. It has paved the way for more competition and innovation bringing new payment solutions to the public and to retailers, making us less dependent on large card companies.

The title of the conference is therefore very appropriate. Opting for SEPA can most certainly be seen as a way of Shaping Payments Innovation.

Today and tomorrow we will discuss, among other things TIPS, the Target Instant Payment Services and its multi-currency capabilities, which may be of interest to you, and the European Payments Initiative. A private endeavour to harmonized Europe which we highly support. Not on the agenda of this conference is the Digital Euro, but of course also this latest initiative from the Eurosystem complemented by a legislative proposal from the European Commission only yesterday, is intended to build for a stronger Europe and to ensure that public money remains accessible to all also in more and more digital environment. It is our believe that the Digital Euro will complement physical cash, which remains important, and will co-exist with important private initiatives such as EPI and SPAA, the SEPA Payment Account Access scheme, which lays the foundation for Open banking beyond PSD2.

None of these promising initiatives can ever be successful, were it not for the close co-operation between banks, clearing houses, stakeholder representatives, central bankers, ministries and legislators. This takes time as all great payment infrastructures do, but all of them show great promise in building for a harmonized and stronger Europe, and as such they should have our total support and commitment.

Let me conclude. I would like to thank the National Bank of North Macedonia for hosting the event and for the constructive and productive cooperation. This conference has proven time and again to be an important platform for exchanging views. And always in the spirit of mutual respect and cooperation. In this context I wish to quote an old African saying which certainly has merit in our environment:

If you want to fast, go alone. If you want to go far, go together.

I wish you all, two days of inspiring discussions and great co-operation. 

Thank you.