Thank you, Roland, for your introduction.
I’m very pleased to open this forum on the ways the U.S. payments industry is developing markets around the world.
I want to welcome our guests from the private sector including senior executives from American Express, Diners, Discover, MasterCard, PayPal, and Visa as well as all of our colleagues from the US government. The wide variety of agencies and institutions we have with us today at this forum underscores interest in this topic.
I know that interagency representatives in the audience today work with the payments industry in a variety of different ways. Some of you are working to advance financial inclusion. Some of you are working to safeguard the international payments systems, and disrupt terrorism finance. And some of you are regulating the U.S. payments industry.
We at the State Department are interested in understanding the international implications of this innovative, expanding industry that is the backbone of international commerce.
And we know that American companies are excellent ambassadors of American values and standards in the many countries in which they operate.
Payments, of course, provide the rails on which economies move. The U.S. payments industry facilitates the economic activity of billions of people, businesses, and governments around the world. Without the payments industry, e-commerce could not operate and any international commerce would be hindered. The global marketplace is a great way to power American economic growth and create American jobs.
The Global Payments Opportunity
The market opportunity in the payments industry is enormous. Only one-half of the world’s adults report having used a payment instrument in the past year.
McKinsey estimates that by moving transactions into the formal financial system, the world would gain a $3.7 trillion GDP boost. There would also be a $110 billion reduction in government leakage due to corrupt officials abusing vulnerabilities in the cash pipeline by 2025.
McKinsey assesses that moving transactions into the formal financial system would create a six percent increase in global GDP. U.S. companies are making this growth happen by leveraging digital tools to decrease cost and increase scale.
Here in the economic section of the Department, we want to be sure that American companies have the enabling environments to maximize this opportunity.
The downstream effects of shifting transactions from the informal to the formal sectors of the economy include countering terrorist financing and money laundering—issues that we care very much about at the State Department.
Payments Companies Pursuing Innovation
U.S. payment companies are challenging the status quo, building on and scaling up innovation arising from many different sources.
A few weeks ago while I was in New York, I visited the innovation lab of one of the payment companies you will hear from today. I am always impressed to see how tech hubs and innovation labs are creating new opportunities for change. I think it is important to visit innovation ecosystems because it allows us to make better policies. Just like the conversation today will allow us to think more strategically.
Innovation is a unique challenge in this rapidly-changing industry. But by investing in new ideas, each of these companies is making life better for the consumers they serve and making our financial system more responsive to market needs.
Ways We Are Engaging with the Payments Industry
I want to highlight two of our priorities where I see significant synergy between the State Department and the payments industry. First, global entrepreneurship, and second, women’s economic empowerment.
On global entrepreneurship, the payments industry is giving entrepreneurs around the world the financial tools they need for their businesses.
A perfect example how we engage on this issue is through the Global Entrepreneurship Summit, which will include a focus on access to capital and growing an enterprise.
The summit, to be held in the Netherlands from June 3-5, brings together thousands of entrepreneurs, investors of all types, and business representatives from all corners of the world—including representatives from these companies here with us today who champion entrepreneurs.
Next I’ll turn to women’s economic empowerment. The Administration is wholly invested in finding better platforms that enable all women to full participate in the global economy.
We are actively seeking ways to work with the private sector to advance this goal. Last month, our Bureau launched a new State Department initiative entitled, Providing Opportunities for Women’s Economic Rise, or “POWER”.
Through POWER we will work with the private sector to advance women’s economic empowerment in a way that is effective, sustained, and multi-sectoral.
We are already engaging with a number of today’s participants, and I want to thank them for their commitment to this issue.
And I will take this opportunity to encourage all of our private sector guests to join us in this effort.
Today’s panelists and the companies they represent are pursuing new markets, using emerging technologies to develop innovative financial services, and improving access to financial services for entrepreneurs and women.
I want to thank both our public sector colleagues and the private sector for joining us today. We want to be partners in your success!