Page 63 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

national operating systems together, while participants access the hub entity through the national settlement
infrastructure of their jurisdiction .
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10. In the centralized platform model, the national payment system infrastructures are replaced by a
single international system (Figure 2). In this case, it is more appropriate to talk about international payment
system integration. Participants access the system directly through the relevant telecommunications network
or indirectly through any direct participant in the system. Centralized platforms are mostly identified with
international integration projects, most notably regional, which have evolved into monetary unions with the
use of a regional currency. They minimize or even eliminate the distinction between cross-border and domestic
payments, and allow for processing both types of transactions in the same system seamlessly.

Figure 2 – Centralized payments system

C. Examples of international PSI interlinking

11. Various examples illustrate the different technical modalities of interlinking discussed above. One
example of bilateral links between national payment systems is the linking of the Hong Kong Monetary
Authority’s U.S. dollar real-time gross settlement (RTGS) system with the RTGS systems of other central
banks in the region, specifically Bank Negara Malaysia’s RENTAS and Bank Indonesia’s BI-RTGS. These systems
operate on a common operating platform. Their links, which are independent from each other, allow payment-
versus-payment settlement between the national currencies of those countries and the U.S. dollar. Other
illustrative examples are the East African Payments System (EAPS), which shows the case of national payment
systems linked through the holding of bilateral accounts among central banks, and the Sistema de Pagos en
Moneda Local involving the national RTGS systems of Argentina and Brazil, which is an example of the national
payment systems linked through their respective central banks which hold settlement accounts with a common
commercial bank. Currently, two SML systems are operational: one linking the RTGS systems of Argentina and
Brazil, and other linking the RTGS systems of Brazil and Uruguay.

12. Other cases exemplify the decentralized and centralized models of international payment system
integration. Schemes with a decentralized settlement system involving multiple parties have been developed
in regions where there is a regional currency, as well as for settling cross-border payments denominated in a

10 Messaging formats between participating members and their national payment system are often standardized with those
required for cross-border messaging, or are readily translatable through mapping interfaces to allow straight-through message
processing between connected systems.

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