Cross-border payments enable international trade and globalization but are often costly, slow and opaque. As demand rises for faster, more transparent cross-border transactions and new innovations and players enter the arena, outdated regulatory frameworks pose a key obstacle in meeting the needs of international trade.

This paper identifies the main regulatory frictions hindering efficient and inclusive cross-border payments, including diverging regulatory frameworks, anti-money laundering compliance complexities, restrictive data regulations and inadequate access for non-bank players. It proposes recommendations to advance regulatory interoperability through enhanced cross-border collaborations, modernized frameworks, strengthened cooperation and public-private partnerships. Achieving interoperability will require the public and private sectors to come together in shaping a transparent, efficient and inclusive cross-border payments ecosystem.