LEI codes required for cross-border payment transfers

Cross-border payments legislation is expected to take effect in 2027. This means that everyone will need an LEI code.

When the likes of G20, the World Bank, the Financial Stability Board, the Bank for International Settlements, the Committee on Payments and Market Infrastructure, GLEIF, and the ECB all stress the importance of cross-border payment legislation, the rest of the world has to take notice.

Why legislate about cross-border payments?

Cross-border payment transfers is a topic relevant for everyone - individuals, households, the small business owners, the multinationals, banks, and payment processors like Wise and Paypal. While domestic payments can be done instantly and digitally, international payments are slow and costly and can be a deterrent of growth to small and medium-sized companies.

Furthermore, as per the ECB on October 31, 2023, ‘Migrant workers, who support one in nine people globally through remittances, can face exorbitant costs when sending money home.’

Everyone will need an LEI code

It is a prerequisite for enabling instant and transparent cross-border payments to have a valid LEI code. This means that in time, everyone will need to have an LEI code.

This is also why India experienced a 308% increase in the acquisition of LEIs over a two-year period, when they adopted the cross-border payments legislation back in 2021 (see the below chart).

Legislation implementation in 2027

The cross-border payments legislation is expected to go into effect in 2027. There’s good reason for banks and payment processors to get ready by getting the right infrastructure in place. By partnering with us at Global FinReg, they can have their own LEI white label site to manage and validate LEI codes for their clients. At the same time, they can improve their AML procedures and ease their reporting processes and procedures by using state of the art technology. Are you ready?

Please contact us here, if you have any questions or need help with registering, renewing or transferring your LEI code.