2024-07-25 Payment BB WG Meeting notes

Mastercard’s Cross-Border Payment Solution

Florian Greunz

• Florian Greunz from Mastercard presented Mastercard’s cross-border payment solution, highlighting the challenges with the current correspondent banking model.

• The pain points identified were high costs, slow transaction times, lack of transparency, and inconsistency.

• Mastercard's solution leverages their global network of payment partners to facilitate faster, more transparent, and efficient cross-border payments.

• Mastercard’s solution can reach various endpoints, including cards, bank accounts, mobile wallets, and cash pickup locations.

• Mastercard's solution can cover three types of government disbursement use cases:

  • Government to Business (G2B): International humanitarian aid, financial aid payments to NGOs abroad.

  • Government to Person (G2P): International pension payments.

  • Government to Government (G2G): Crisis support payments.

• The benefits of Mastercard's solution include faster payments, real-time transparency, clear fee structures, and diverse payout options

Mastercard’s Cross-Border Payment Solution as a use case for Payments BB

Florian, @David Higgins @Mauree, Venkatesen

1. The discussion focused on how Mastercard's solution could integrate with the payment building block.

2. Two potential models were discussed:

   1. The bank acts as the intermediary between the government and Mastercard Cross-Border Services.

   2. The payment building block acts as the intermediary, integrating Mastercard's APIs and forwarding payment instructions.

3. The second model, where the payment building block acts as the intermediary, resonated more with the group.

4. @David Higgins suggested that Mastercard Cross-Border Services could be treated as another bank within the payment building block.

5. The group agreed that a decision mechanism within the payment building block would be needed to determine the optimal route for each payment.

6. Florian clarified that Mastercard's solution is complementary and does not aim to replace existing networks.

7. Florian will prepare a flow diagram illustrating the information exchange between the government, the payment building block, and Mastercard Cross-Border Services.