JACKSON HOLE, Wyo. — The growth of around-the-clock financial markets, cross-border digital commerce and artificial intelligence is increasing pressure on the global payments system to move money as quickly as the businesses and technologies it supports, according to reports from a major meeting here.
The issue emerged during last week’s Jackson Hole Economic Policy Symposium, where International Monetary Fund Managing Director Kristalina Georgieva said domestic payment systems have made substantial improvements in speed, convenience and cost, but cross-border payments continue to lag.
“Transactions are still too costly and too slow,” Georgieva told PYMNTS.
The challenge is becoming more significant as financial markets increasingly operate outside traditional banking hours and businesses sell digital products and services internationally, PYMNTS reported. While a digital service can reach an overseas customer almost immediately, the payment may still have to move through multiple currencies, financial institutions and regulatory systems.
Businesses Seek Faster Cross-Border Payments
Research by PYMNTS Intelligence and Mastercard found that 57% of U.S. small and medium-sized businesses purchase goods or materials from overseas suppliers.
Among companies sourcing internationally, 43% identified faster payment processing and settlement as their top area for improvement, while 27% expressed interest in changing cross-border payment providers.
Georgieva pointed to several initiatives intended to improve connections among payment systems, including the European Central Bank’s TIPS service, Southeast Asia’s Nexus initiative, southern Africa’s TCIB and the Bank for International Settlements’ Project Agorá.
The projects use different approaches but illustrate the difficulty of improving global payments solely through faster domestic systems, PYMNTS reported. Payments that move nearly instantly within one country can encounter delays when they cross borders.
Caution Share
Georgieva was more cautious about blockchain technology, describing its current role in global payments as “a small experiment.”
Tokenization and stablecoins could eventually reduce the cost and increase the speed of some large cross-border transactions, she said, but their ultimate role remains uncertain.
Georgieva also pointed to international trade in digital services — including AI — as an area that could particularly benefit from more efficient payments.
AI Growth Could Intensify Pressure
The discussion came as the G20 Innovation Ministerial in Chapel Hill, North Carolina, focused separately on AI and robotics.
Elon Musk told the gathering Tuesday that AI could eventually increase global economic output by 20% to 30% and predicted more than 1 billion humanoid robots could be operating within 10 years. Those estimates are Musk’s forecasts, not G20 projections, PYMNTS noted.
Musk said the expansion of digital technology has an inherent speed advantage over technologies requiring physical production.
“Anything physical always takes longer than anything which is digital,” Musk said.
AI software can be copied and distributed electronically, while robots require manufacturing, semiconductors, electromechanical components, factories and global supply chains. Musk also said electricity availability could become a constraint on the expansion of AI computing.
Important Implications
That distinction could have important implications for international payments, according to PYMNTS.
Digital services can be developed in one country and delivered almost instantly to customers elsewhere without the manufacturing and transportation requirements associated with physical goods.
But the payment for that service must still navigate the cross-border costs and settlement delays Georgieva highlighted, creating a widening mismatch between the speed of the digital economy and the financial infrastructure supporting it.
