The Financial Stability Board (FSB) recently warned that the G20’s 2027 targets to make cross-border payments faster, more affordable, and more transparent are unlikely to be met. While disappointing, this development highlights the increasing importance of regional initiatives and private sector innovation in addressing the persistent inefficiencies in international payments.
In a recent interview with Moneyweb, Harry Scherzer, CEO of Future Forex, provided insight into the consequences of these delays for South African businesses and individuals, highlighting the regulatory and technological steps needed to move forward.
Progress remains slow, but the direction is clear
Scherzer acknowledges that the inability to meet the 2027 targets is concerning, but not entirely unexpected. “It is not an encouraging headline,” he says, “but the global industry is at least moving in the right direction.”
While progress has been slower than anticipated, there are improvements underway. For example, updates to the SWIFT messaging infrastructure are expected before year-end, potentially improving transaction speeds. However, these remain incremental changes, rather than systemic reform.
Cost of cross-border payments remains unjustifiably high
Scherzer argues that the true barrier to more affordable international payments is not technological but structural. “The fees being charged are disproportionately high compared to the service provided,” he notes. “This is not due to outdated systems alone, but to entrenched commercial models, particularly within the traditional banking sector.”
He contends that many of the inefficiencies in cross-border payments persist because large financial institutions have little incentive to reduce costs. “Future Forex is committed to transparency and cost efficiency - values that are unfortunately not embedded within the legacy banking environment.”
Regulatory change may force greater transparency
Some relief might come through legislative reform. Scherzer highlights the Conduct of Financial Institutions (COFI) Bill, expected to be enacted later this year. Among other provisions, it will likely require greater transparency regarding fees and charges.
“If financial institutions are required to clearly disclose their fee structures, public and client pressure may compel them to lower these fees,” he explains. That said, the success of such reform depends heavily on effective implementation and enforcement, neither of which is guaranteed at this stage.
Blockchain’s potential, and the regulatory gap
Looking beyond traditional infrastructure, Scherzer sees significant opportunity in blockchain technology as a means to modernise cross-border payments. “The SWIFT system is reliable, but it is inherently slow and costly. Blockchain offers a viable alternative - one that can streamline processes and reduce costs.”
However, South African regulation has yet to provide the clarity needed to fully leverage blockchain in the context of cross-border flows. Regulatory uncertainty surrounding capital controls, balance of payments reporting, and crypto asset usage continues to limit innovation in this space.
Scherzer references the Genius Act in the United States, which recently recognised stablecoins for international payments, as an example of constructive policy. “South Africa needs to follow a similar path by implementing a regulatory framework that enables blockchain use while maintaining financial oversight.”
When will meaningful change occur?
While isolated improvements are approaching, including modifications to SWIFT as early as next month, Scherzer estimates that comprehensive reform is likely at least two to three years away.
“There will be incremental gains in the short term, such as faster settlement times,” he says. “But systemic change, particularly around cost structures and innovation adoption, will take longer.”
He believes that smaller, more agile fintech companies are best positioned to lead this transformation. “If significant progress is to be made in the interim, it will come from the private sector, not the incumbents.”
Outlook
Although the G20’s 2027 objectives now appear out of reach, there remains scope for meaningful improvement in South Africa’s cross-border payment sector. Legislative initiatives such as the COFI Bill, along with responsible regulatory reform and fintech innovation, could provide a framework for faster and more cost-effective international transactions.
As global reform efforts stall, the local focus must shift toward empowering compliant innovation, increasing transparency, and updating both technical and institutional infrastructure.
“The opportunity is there,” concludes Scherzer. “What’s needed now is decisive regulatory support and a willingness to embrace new technologies.”
