A unified payment system for the expanded 11-member BRICS grouping is indeed achievable, but its successful implementation hinges on establishing deep trust, strong data security measures, and an appropriate regulatory framework among member nations. This assessment comes from Ziaad Suleiman, Chair of the Digital Economy Working Group, South Africa Chapter, BRICS Business Council.
The Trust Imperative for Interoperability
Suleiman emphasized in a recent interview that interoperability across BRICS payment systems extends beyond mere technological integration. It necessitates a collective agreement on rules governing data security, cross-border transactions, and overall financial activity. Without these fundamental safeguards, he noted, countries will naturally harbor concerns regarding the safety of their data and the security of financial exchanges.
Establishing this trust also involves a mutual understanding of how businesses operate within each other’s markets. The BRICS bloc, which has grown to 11 members, faces increased complexity due to the diverse financial systems and currencies of its constituents, even as its larger scale presents greater potential for an interoperable framework.
Navigating Local Currency Transactions
The aspiration for greater financial connectivity within BRICS includes a push for increased use of local currencies in trade. However, Suleiman clarified that there is no singular solution to facilitate local-currency transactions across the diverse group.
Instead, he suggested that the path forward involves a combination of choice and multilateral agreements, allowing countries to determine their preferred currency of trade. The feasibility of such arrangements, he added, would largely depend on the existing levels of trade and the strength of relationships between individual nations. Ultimately, the success of local currency initiatives, much like the unified payment system, circles back to the foundational element of trust and agreed-upon frameworks.
Critical Role of Regulatory Alignment
For a unified BRICS payment network to function effectively, more than just connecting payment technologies is required. Member states must align on common or compatible standards that encompass transaction security, data protection, and the operational guidelines for financial institutions conducting cross-border business. This regulatory cooperation is paramount as BRICS economies strive to make local-currency transactions more practical and efficient, potentially improving cross-border remittances.
Foundational Connectivity and Accessibility
Beyond payment specifics, Suleiman highlighted that the broader digital agenda must begin with robust connectivity. He pointed out that for populations in rural and peri-urban areas, traditional 5G infrastructure might not always be sufficient or economically viable, making alternative forms of connectivity, such as satellite internet, crucially important.
“The starting point is really connectivity, because if you don’t have connectivity and people are not connected to the digital economy, then there is no transaction,” Suleiman stated. He concluded that affordability and accessibility are key determinants for whether underserved populations can truly participate in the digital economy.
During the BRICS Business Forum in New Delhi, Suleiman also affirmed South Africa's technology-agnostic approach, expressing openness to collaborating with various partners and ensuring that technology choices are always “fit-for-purpose.”