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International payments are still far from efficient, despite all the standardization and improvements in recent years. The most important reason: many parties involved and regulations due to multiple jurisdictions. Because of this, low and fragmented information quality. Resulting in low speed and high costs.

The Financial Stability Board (FSB) expects that the use of the LEI will bring improvements; see their report of 7 July. Indeed, the LEI certainly helps to reduce the KYC problem in payment transactions.

In addition, the LEI can contribute to improve related activities. Think about reconciliation issues within organizations. When LEI becomes an integral part of the payment system, the LEI become a structured element. Now the payment remark and descriptions are not forwarded in a structured manner. A structured handled LEI received by an organization is 100% reliable. This will save a lot of reconciliation costs, one of the biggest cost components in payments. In addition to reconciliation, the LEI offers other advantages for companies. What to think before payment or even delivery is made, the customer or supplier acceptance process. Here too, the LEI can offer big advantages to organizations.

India already seems to be ahead of Europe in terms of LEI integration in the payment system. The Reserve Bank of India had already included the LEI some years ago in the 2021 payment vision. At that time only for high-value international traffic. In their latest vision, 2025, they discuss already the LEI integration in their national payment services. And the LEI will not only have impact on costs but will have influence on sanction screening, KYC, reconciliation and fraud detection too.

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