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The Covid-19 pandemic has likely accelerated recent trends in cross-border payments, increasing payment activity amid an ongoing decline in the number of correspondent banks, says a new report from the Bank for International Settlements (BIS).

The G20 has made enhancing cross-border payments a priority this year, noting that these payments are “vital for economic growth, international trade, global development and financial inclusion,” but are generally “slower, more expensive, less transparent and less accessible” than domestic payments.

According to the BIS report, both the value and volume of cross-border payments have been steadily growing since 2011. In 2019, the value of payments rose by 5% and the volume of transactions was up by 4%, the BIS said.

At the same time, the population of correspondent banks continued declining. The number of active correspondent banks dropped by 3% in 2019, and is down 22% since 2011, the BIS said.

The report noted that there’s concern that this decline in the number of correspondent banks could hamper financial inclusion, further increase the cost of cross-border payments, or drive transactions into unregulated channels.

While data on the cross-border banking landscape in 2020 is not yet available, the report said that “early indications suggest that the Covid-19 crisis is likely to accelerate changes” in the sector.

“Even though the pandemic has limited cross-border movement, the crisis has amplified calls to reinforce coordination and reduce fragmentation in cross-border payment systems,” the report said.