ASEAN Central Banks Working Committee on Payment and Settlement System (WC-PSS) Portugal, October 2012
Background Payment and settlement system is the backbone of economic activities toward AEC 2015; There is no reference for the development and harmonization of ASEAN payment and settlement system in the AEC blueprint; Diversities of economic and market infrastructure conditions in ASEAN region.
Objective To prepare the payment and settlement systems of ASEAN member countries in embracing the AEC in 2015 by: conducting studies; providing policy recommendation; for the development and harmonization of the ASEAN payment and settlement systems.
Deliverables Studies on the commercial and economic needs of various users requiring the support of payment and settlement systems development among ASEAN countries; Recommendations on policies and action plans; Capacity building activities.
Strategic Framework of Payment and Settlement System Toward AEC 2015 AEC 2015 Vision Free Flow of Goods Free Flow of Services Free Flow of Skilled Labour Free Flow of Investment Freer Flow of Capital ASEAN Payments Vision ASEAN Payments aim to foster integrated, safe, and efficient payment and settlement systems in the region that enable businesses and individuals to make or receive cross border electronic payments with greater convenience Efficient Consumer Protection Sound & Robust Policy Legal Framework Instrument Institution Payment service & infrastructure Retail Payment System High Value Payment System
Milestones and Timelines Timelines Common Milestones Short Term (2011-2013) Encouragement on the adoption of international/common standard Medium Term (2014 2015) Implementation of Standardization. Infrastructure Development. Moving towards T+1 receipt of funds. Establishing or expanding links in existing regional payment systems network. Long Term (After 2015) Exploring PSS Linkages: Moving toward same day receipt of funds. Integrated/interconnected payment systems network. Specific Milestones: Trade settlement Cooperative Oversight Capacity Building (e.g. Technical Assistance, Workshop, Seminar) and Joint research. Promotion of local currencies usage. Implementation of local currencies in pilot areas (bilateral arrangement) Expansion of local currencies in other areas (bilateral and /or multilateral arrangement) Money Remittance Retail Payment Systems Promotion of formal channels Promotion of consumer protection. Promotion of common used payment instruments under regional scheme. Exploration to utilize existing infrastructure and regional networks (e.g. Philippine's model by utilizing RTGS for money remittance services) Expansion of products and services provided by existing regional network. Enhancement and/or development of payment systems linkages. Capital Market Settlement Adoption of international standards. Coordination with capital market initiatives (e.g. ACMF, WC-CMD) & related authorities to encourage risk mitigation.
Preconditions Timelines Short Term (2011-2013) Medium Term (2014 2015) Long Term (After 2015) Common Preconditions: Existence of international/common standards. Automated system (e.g. straight-through-processing/stp). Business needs dependent. Harmonization on legal framework (e.g. finality of settlement, recognition of electronic documents). Harmonization of policies. Transparency (e.g. fee structure/pricing). Close coordination and cooperation with relevant authorities. Specific Preconditions: Trade settlement Money Remittance Allow the usage of non-resident account. Sufficient number and accessibility of banks and formal remittance service providers. Educational programs for migrant workers. Retail Payment Systems Capital Market Settlement Existence of electronic payment instruments. Wide acceptance of non cash payment instruments. Existence of infrastructures capable to comply with international standards. Existence of market practices comply with international standards.
Task Forces: Organization WC-PSS Task Forces (TFs) TF1 TF2 TF3 TF4 TF5 Trade Settlement Money Remittance Retail Payment System Capital Market Settlement Standardization Coordinator Coordinators Coordinators Coordinators Coordinators -BNM -BSP -BI -MAS -BOT Stakeholders -NBC -SBV -AMBD -BOL - Central Banks - Commercial Banks Stakeholders - Central Banks Stakeholders - Central Banks - ACHs / NSPs Stakeholders - Central Banks Stakeholders - Central Banks - Standards Setting Bodies - SWIFT
Task Forces: Scope of Work (1) Task Forces TF1 TF2 Objectives and scope of work To promote use of local currencies To promote greater transparency in bank charges To implement mechanism to achieve T+1 receipt of funds To coordinate with relevant stakeholders on interoperability between domestic and cross border payment systems To implement and monitor the progress forward on the use of formal banking channel for remittances and disclosure of fee and foreign exchange rates To revisit and strengthen the existing policies on consumer protection To observe international best practices, guidelines and policies To promote increased efficiency by encouraging more competition To regulate and conduct the oversight of payment service providers To promote uniformity of core elements for interoperability
Task Forces: Scope of Work (2) Task Forces TF3 Objectives and scope of work To develop common business case/model and it s respective aspects for Retail Payment Systems (RPS) of AEC countries, which will become part of Task Force (TF) on RPS recommendation To design and assist general milestones and timelines in developing common business case/model for RPS of AEC countries and their respective implementation To commence cooperation with other relevant TFs (e.g. TF on Standardization) and each relevant industry player into the development of regional (retail) payment system network To assist implementation of common business model of RPS by the industry To assist the process of capacity building among member countries
Task Forces: Scope of Work (3) Task Forces TF4 TF5 Objectives and scope of work To liaise with ACMF and WC-CMD to identify capital market settlement elements within their individual regional plans and understand their priorities To support ACMF and WC-CMD initiatives on technical issues related to capital market settlement To promote international standards for domestic settlement infrastructure, working closely with WC-PSS TF on Standardization To create awareness on emerging international standards relating to payment and settlement systems To coordinate with relevant stakeholders on the adoption of standards (i.e. ISO 20022) To commission research and industry consultations, where necessary, into standards harmonization for ASEAN To implement and monitor progress towards the adoption of standards amongst task force members To represent the WC-PSS on standards issues in international forums
Task Forces: Progress Task Force Trade Settlement Progress Preparation of principles to improve transparency in bank charges that will include among others the minimum level of disclosure Preparation of comparative table of transparency of bank charges Money Remittance Preparation of guideline for pre-departure seminar/briefing for departing workers Preparation of money remittance modalities as a tool for promoting formal channel Retail Payment Systems Coordination with APN to expand the existing regional network Coordination with TF on Money Remittance to utilize the existing regional network for remittance Capital Market Settlement Coordination with existing capital market initiatives Standardization Preparation of common standards for payment and settlement systems in ASEAN