Payments

Instant payments, instant risks: Banks’ perspectives in the payments revolution

via Trade Finance Global by Deepa Sinha

  • Instant payments are transforming transaction banking by compressing settlement cycles.
  • Banks face mounting pressures to overhaul liquidity management, shift to 24/7 continuous settlement, and balance seamless payments with safeguards against fraud and bank runs.
  • Stricter regulation, real-time FX risk and rising fraud threats mean more is demanded within instant payments demand advanced technology.

Instant payments are being hailed far and wide as the new frontier in transaction banking, making transaction fees and processing times as much a relic of the past as travellers’ cheques and bank tellers. 

However, things are not quite so frictionless as they seem behind the scenes, with banks having to grapple with the risks associated with instant payments – from fraud to bank runs – while adapting to a brand new settlement regime and evolving regulatory standards.

A new whitepaper by BAFT (Bankers Association for Finance and Trade) explores the key issues faced by banks in the era of instant payments and what they can do to adapt while still keeping up with the markets. 

Read the full article here.

BAFT Applauds New York for Modernizing Trade Laws 

WASHINGTON, D.C. (December 10, 2025) – New York enacted major legislation to support and increase the digitalization of trade finance. BAFT (Bankers Association for Finance and Trade), the leading global industry association for international transaction banking, applauds Governor Kathy Hochul for signing, Sen. Brad Hoylman-Sigal, and NY Assemblyman Alex Bores for their efforts to bring legal clarity and recognition for digital trade payment instruments. 
 
“New York Law governs a significant volume of international commerce, so this was particularly important for the United States to maintain its leading role in international trade. This update will provide interoperability with the global community that have already adopted or are currently considering similar legislation,” said President and CEO Tod Burwell, BAFT. 
 
A large obstacle to trade digitalization is the lack of recognition for electronic trade documents under various legal frameworks. Much of the trade finance process is to this day physical paper dependent. The law allows for interoperability between New York and is compatible with electronic records contemplated by UNCITRAL’s Model Law of Electronic Transferable Records (MLETR), which is the basis for many legal frameworks around the world. Thirty-three states in the United States have adopted similar legislation. 
 
With New York being one of the leading and most influential states for commercial transactions in the world, the passage of this legislation marks a significant advance in digitalizing the trade finance process. 
 
BAFT will continue its efforts to bring all 50 states to adopt similar legislation as well as continuing its efforts globally to bring acceptance of digital trade finance documents. A link to the bill can be viewed here. 

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About BAFT
BAFT is the leading global industry association for international transaction banking. Bringing together financial institutions, service providers, and the regulatory community, BAFT provides thought leadership, advocacy, education, and a platform for collaboration to promote sound financial practices that foster innovation, efficiency, and commercial growth. The association engages in a broad range of issues affecting transaction banking, including trade finance, payments, and compliance, helping members navigate a rapidly evolving global landscape. For more information about BAFT, visit baft.org, or follow BAFT on X (Formally Twitter), LinkedIn, and YouTube.

BAFT Releases White Paper on Managing Liquidity, Operational, and Financial Crimes Risks in Instant Payments

WASHINGTON, D.C. (November 5, 2025) – BAFT, the leading global industry association for international transaction banking, has released a new white paper titled “Liquidity, Operational, and Financial Crimes Risks in Instant Payments.” As instant payment systems gain momentum worldwide, this timely publication addresses the evolving risk landscape tied to the speed, irrevocability, and complexity of these transactions. 

The white paper outlines critical considerations for financial institutions, including the need for enhanced real-time monitoring, proactive liquidity management, and tailored financial crime controls. It provides actionable insights for banks to develop a risk-based approach, ensuring safe and resilient instant payment services while maintaining innovation and customer confidence. 
 
“Instant payments are reshaping the global payments ecosystem, but with their benefits come heightened risks,” said Deepa Sinha, SVP for Payments and Financial Crimes at BAFT. “This white paper equips institutions with the tools and strategies necessary to mitigate these risks and operate responsibly in the new real-time environment.”

To access the full white paper, visit www.baft.org 

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About BAFT
BAFT is the leading global industry association for international transaction banking. Bringing together financial institutions, service providers, and the regulatory community, BAFT provides thought leadership, advocacy, education, and a platform for collaboration to promote sound financial practices that foster innovation, efficiency, and commercial growth. The association engages in a broad range of issues affecting transaction banking, including trade finance, payments, and compliance, helping members navigate a rapidly evolving global landscape. For more information about BAFT, visit baft.org, or follow BAFT on X (Formally Twitter), LinkedIn, and YouTube.

Podcast | The G20 Roadmap and the Future of Cross Border Payments

To explore how far the industry has come since the G20 Roadmap for Cross Border Payments was endorsed in 2020, and how much more remains to be done, Trade Treasury Payments (TTP) spoke with Deepa Sinha, Senior Vice President for Payments and Financial Crimes at BAFT, and Shriyanka Hore, Global Head of Industry Engagement at Swift.

Via Trade Treasury Payments by Deepa Sinha

Amid four packed days at Sibos 2025 in Frankfurt, experts from across the transaction banking space came together to discuss (among many other topics from a long agenda) how to make cross-border payments better. Today, trillions of dollars move across borders each day and global commerce has become more digital than ever, which means that implementation is becoming a central priority.

In the final hours of the conference, Trade Treasury Payments (TTP) made time to sit down with Deepa Sinha, Senior Vice President for Payments and Financial Crimes at BAFT, and Shriyanka Hore, Global Head of Industry Engagement at Swift, to discuss how far the industry has come and how far it still has to go.

The G20 roadmap for cross-border payments, endorsed in 2020, set a collective goal of making international payments faster, cheaper, more transparent, and more accessible by 2027. Even in 2025, fragmented regulations and differing market practices mean that a cross-border payment can look very different depending on where it starts and ends.

Read the article and listen to the full episode here.

10 lessons banks have learned from the ISO 20022 migration

Via Trade Treasury Payments by Deepesh Patel

The shift to ISO 20022 marks one of the most significant changes in global financial infrastructure in decades. ISO 20022 is a universal messaging standard that uses structured, machine-readable XML data to describe financial transactions. It replaces SWIFT’s legacy MT (Message Type) format, which has been in use for more than 40 years and relies on unstructured text fields with limited capacity for automation and analytics.

SWIFT introduced ISO 20022 for cross-border payments and reporting (CBPR+) on 20 March 2023, launching a three-year coexistence period in which both MT and ISO 20022 (MX) messages could be exchanged. This period ends on 22 November 2025, when SWIFT will retire MT messages in Categories 1, 2, and 9 in bank-to-bank communication. After that date, all cross-border payments, bank-to-bank transfers, and cash-management messages must be sent and received in ISO 20022 format.

These categories include common flows such as MT103 (customer credit transfer) and MT202 (bank transfer), which are being replaced by pacs.008 and pacs.009, as well as MT940 statements, now superseded by camt.053.

For banks, corporates, and treasurers, the migration enables richer, more consistent data for reconciliation, sanctions screening, and analytics. For the wider trade, treasury, and payments (TTP) ecosystem, ISO 20022 creates opportunities to enhance supply-chain visibility, improve straight-through processing, and align cross-border and domestic systems under a single standard.

BAFT’s ISO 20022 Migration Lessons Learned paper, drawing on insights from leading global banks, outlines key takeaways from this transformation. The following ten lessons summarise what has worked, where challenges remain, and how institutions can prepare for the final phase.

Read full article here.