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Without undermining the importance of any of the reasons you've advanced for the challenges in cross-border payments as against domestic payments, they're natural outcomes of one underlying problem: Lack of a single scheme operator.

Your proposed solutions will work if this problem is fixed e.g. Who will define the scope of KYC that must be carried out by so-and-so bank in so-and-so receiving country?

I was quite gung-ho about Blockchain Flight Delay Insurance and had written about two products - AXA Fizzy and Atlast Etherisc - back in 2018: AXA Fizzy - The New Kid On The Blockchain, Atlas Etherisc - Another New Kid On The Blockchain. Unfo, this product category has failed to go mainstream.

Since then, at least one bank I know launched a flight delay insurance product on traditional database technology but even that failed to gather much traction.

With the benefit of 20/20 hindsight, I'm guessing air travelers felt they shouldn't be asked to pay for insurance to mitigate a risk caused by airlines!

At least farmers have Act of God to blame, so Etherisc's pivot to parametric crop insurance might have greater success.

"Banks and banking are facing an existential crisis."

Hahahahaha.

While it was always moronic, this statement was at least cool 10 years ago. 

In 1994, Bill Gates said "banks are dinosaurs". Since then, bank operating revenue has tripled, earnings have quadrupled, equity capital has quintupled, and profits have hit a record high of $50B in 1Q2018 (Source), by which point "cool digital upstarts" had had at least 10 years to "elbow aside" banks - but couldn't come anywhere close to doing so.

Nice article.

Having written on the topic of multilingual support in sanctions screening systems, I'm aware of a bit of non-determinism at the periphery of sanctions screening. However, I was under the impression that the core of sanctions-screening was a deterministic process whereby the system looks up FATF whitelist / backlist once a day and takes a Go / NoGo decision about the payment.

Ergo, I was wondering how FCA's 100K sample would be able to distinguish the efficacy of sanctions screening between one bank and another.

Thanks to your point #3, TIL that there's fuzzy logic in sanctions screening, which makes the answer obvious.

@MelvinHaskins +1.

Hope the OP will enlighten us!

When its uses scraping à la US Open Banking, a fintech can get all the info that a logged user can access at its own speed and reliability whereas, when it uses API à la EU Open Banking, it's not only limited to the functionality provided by the bank, which I highlighted in the original post, but also to the speed and reliability of the bank, which became evident after I read this Fintextra article.

In Open Banking: EU v. USA, I highlighted one major limitation in the API approach of EU Open Banking versus the Scraping approach of US Open Finance: 

"When you use scraping, you can get all the info that the logged user can access whereas, when you use API, you're limited to what the bank provides via API."

This report provides another: Overdependency on banking infrastructure in reliability and speed.

In short, with API, you're limited to the functionality, reliability and speed provided by bank. 

This does not augur well for EU OB Fintechs since their major claim to fame was that they would deliver faster, better and cheaper apps than banks.

True dat.

In India, the Consumer / Payor has full control over the new UPI / eNACH autodebit instrument in terms of cancelling it anytime on bank website unlike the old ECS mandate for autodebit that required the payor to contact the merchant to make any changes. In that context, I can see why the new direct debit instrument is better than the old direct debit instrument for the Consumer.

Whereas, in UK, memory serves, I could go to bank website and cancel / modify the old direct debit mandates anytime. So VRP doesn't seem to provide any additional functionality for the Consumer / Payor.

I suspect VRP has some additional value proposition for the Merchant / Biller that is not widely talked about.

I get that the amount taken out will be according to pre-agreed limits (say £0-100) but I'm keen to know how the exact amount of a given payment (say £47, not £89) is decided at run time: (1) Is it manually entered by payor just before each payment is due? (2) Is it submitted by payee to bank for each payment? (3) Is it submitted upfront by payee to bank for all payments during the agreed tenure of the VRP mandate?

Can you please throw some light on this specific aspect of VRP? Thanks in advance.

Also, since bill amount is variable from one month to another, utility bill payment seems to be tailor-made for VRP but I've never heard of this use case in the context of VRP. 

How is this any different from SEPA ICT, which I believe was launched in 2017 and supports realtime payments in Euro across 36 countries in EU?