The Pacific Islands Forum Secretariat has highlighted the urgent need to improve the affordability and safety of cross-border payments across the region, calling it a critical enabler of economic development, inclusive growth and regional integration. Forum Secretary-General Baron Waqa told a recent gathering of finance and industry stakeholders that current systems are often too costly, slow and difficult for customers and businesses to use, limiting trade and restricting opportunities for both formal and informal enterprises.
The challenge reflects ongoing pressure within the Pacific banking landscape. Small market size, perceived risk and rising compliance costs have contributed to the withdrawal of correspondent banking relationships in several countries. The World Bank and regional central banks have previously noted that the Pacific has experienced one of the sharpest declines in access to global financial networks, making international payments more expensive and less reliable. This directly affects tourism operators, exporters, importers and workers sending money to family members across borders.
Recent developments in the region show a shift toward coordinated solutions. A number of Pacific governments and development partners are trialling national payment switch systems to improve interoperability between banks and mobile money providers. Central banks are working together on standards for digital identity and customer due diligence, aiming to streamline compliance without compromising financial security. Regional discussions have also considered the role of shared digital payment platforms as a potential long-term solution.
New entrants such as fintech firms, mobile network-linked payment services and community banking models are emerging, but most remain limited in scale. Private sector participants at the Forum stressed that reforms must focus equally on technical systems and policy alignment to avoid duplication or fragmentation.
The Forum emphasised that modern, affordable payments infrastructure is fundamental not only to business growth but also to climate finance, labour mobility, remittances, education payments and small enterprise development. Strengthening the region’s payments systems is expected to be a continuing priority for governments and banking regulators in the year ahead.
