David Marcus, Nandan Nilekani talk cross-border payments and Libra

The latest International Monetary Fund (IMF) conference featured leaders from technology, banks, and regulators to discuss the trajectory of the fintech ecosystem. Leading the conversation was Facebook’s David Marcus, Head of Calibra, who highlighted the current constraints of the existing financial system. Highlighting how money has not evolved along with the advent of Internet, Marcus stated,

“The poorer you are, the more you are paying for financial services. We (Libra Association) can help advance the conversation at the very least on what we can collectively do to improve this system.”

While focussing on how payments vary dramatically based on region, Infosys Technologies co-founder and chairman, Nandan Nilekani highlighted the importance of interoperability, which can enable users to witness seamless payment transfers without the need of having “same product on both the sides.” In addition, the entrepreneur claimed that India’s UPI “open access model” allows any big tech companies to participate. He said,

“The world has $689 billion of cross-border remittance from 230 million migrants. WhatsApp, Google and Amazon can participate (in India’s financial ecosystem). But they have to come to the banks.”

In this context, Facebook’s David Marcus, Head of Calibra, explained the need for an “open, yet regulated system” to enable faster, cheaper and secure cross border payments. Marcus also pointed out that Libra Association will require more time to address the raised regulatory concerns related to digital money in collaboration with traditional financial services players.

While Libra’s services will be made available to “anyone with a $30 smartphone”, he highlighted the limited innovation going around in the payments landscape,

“There’s no such system as the Internet for money. There’s no way to move value around the world the same way that you can send an email or a text message.”

He reiterated that in order to deliver financial inclusion for the world, fintech offerings must consider three major aspects: connectivity, identity, and access.