Trust Registries and Cross-Border Payments

Cross-border payments remain one of the least efficient components of the global financial system. Despite decades of reform, international transfers continue to be slow, expensive, and opaque, particularly for small businesses and individuals. According to the World Bank, average global remittance costs still hover above six percent, well above international targets, while settlement timelines routinely stretch across multiple days. These frictions are not the result of outdated technology alone. They are symptoms of fragmented trust.

At the heart of the problem lies the absence of shared, authoritative registries. Cross-border payments require banks, payment service providers, and regulators across jurisdictions to rely on fragmented identity records, inconsistent compliance checks, and bilateral messaging standards. Each intermediary re-verifies the same information, increasing cost and delay while amplifying operational risk. In effect, the system treats trust as something to be recreated at every step rather than something that can be referenced.

Recent payment innovations have shown that this need not be the case. Domestic instant payment systems such as India’s UPI demonstrate how a shared trust framework can dramatically reduce friction. UPI succeeds not because it is a faster technology, but because it operates on top of common identity standards, clear participant rules, and real-time settlement backed by regulated institutions. The result is a payment system that processes hundreds of millions of transactions daily with near-instant finality.

The challenge is extending similar principles across borders. Regional initiatives such as the Pan-African Payment and Settlement System (PAPSS) and bilateral linkages between instant payment systems in Asia are steps in this direction. They aim to reduce reliance on correspondent banking by enabling direct settlement between domestic payment networks. Yet even these systems encounter limits when underlying trust data remains siloed. Payment rails can be connected, but identity, account ownership, and compliance information often cannot.

This is where trust registries become decisive. A trust registry is not a payment system. It is an authoritative source of verified information that payment systems can rely on. In the context of cross-border payments, this includes identity credentials, institutional participation status, compliance certifications, and settlement permissions. When such information is shared through interoperable registries, participants no longer need to duplicate checks or rely on manual reconciliation.

Global standard-setting bodies have begun to recognise this shift. The G20’s roadmap for enhancing cross-border payments increasingly emphasises data harmonisation and shared infrastructure alongside messaging standards. The Financial Stability Board has highlighted the role of common identifiers and reference data in reducing fragmentation. These are signals that efficiency gains will come as much from institutional coordination as from technical upgrades.

India’s digital public infrastructure provides a relevant reference point. Aadhaar established a population-scale identity registry. DigiLocker normalised the use of verified digital documents. UPI integrated these elements into a real-time payment system without centralising control. Together, they show how trust can be embedded upstream and reused across multiple services. Translating this approach internationally requires governance arrangements that respect sovereignty while enabling verification across borders.

The implications extend beyond remittances. Cross-border trade finance, securities settlement, and emerging digital asset transfers all depend on the same foundations of trust. Without interoperable registries, the expansion of new payment instruments risks reproducing existing inefficiencies in digital form. With them, cross-border payments can move closer to real-time settlement, lower costs, and clearer accountability.

SUTRA’s focus on shared trust registries speaks directly to this challenge. Rather than proposing a new payment rail, it addresses the layer that allows multiple rails to interoperate. By enabling authoritative information to be referenced across jurisdictions and institutions, trust registries can reduce friction while strengthening regulatory oversight.

Improving cross-border payments is often framed as a problem of speed. In reality, it is a problem of trust. Payments move slowly, not because value cannot be transferred, but because trust cannot. Designing registries that allow trust to travel with value may be the most consequential reform in international finance.

References

1. Bank for International Settlements. Committee on Payments and Market Infrastructures. Cross-Border Retail Payments. Basel: BIS, 2022.

2. Financial Stability Board. Enhancing Cross-Border Payments: Stage 3 Roadmap. Basel: FSB, 2023.

3. G20. G20 Roadmap for Enhancing Cross-Border Payments. Rome: G20 Italy Presidency, 2021.

4. World Bank. Remittance Prices Worldwide Quarterly. Washington DC: World Bank, 2024.

5. Reserve Bank of India. Payment Systems in India: Vision 2025. Mumbai: RBI, 2023.

6. Bank for International Settlements. Annual Economic Report 2024: Trust and Payments Infrastructure. Basel: BIS, 2024.

7. African Export-Import Bank. Pan-African Payment and Settlement System (PAPSS): Operational Framework. Cairo: Afreximbank, 2023.