Page 17 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

its overall efficiency and maintain trust in the currency. Other authorities like financial supervisors, telecom
regulators and competition authorities, as well as other public sector entities like the national treasury and
the social development ministry have also increased their involvement in this field (see section III.a).
Choices of central bank and other authorities, very often in consultation with the industry, are increasingly
being reflected in structured documents such as a “national retail payments strategy”, a “retail payments policy
framework” or similar. These documents generally aim at achieving comprehensive reforms, with overarching
objectives such as increasing overall safety and efficiency, ensuring there is an efficient infrastructure to
process modern payment instruments, improving the affordability and ease of access to electronic payments,
and ensuring that a socially optimal mix of payment instruments exists in the country. In some cases, these
high-level or overarching objectives are further developed through intermediate objectives such as improving
proximity of payment services, achieving interoperability and others.

Typical contents of a national retail payments strategy or policy framework include: Vision, Assessment, Strategy
Objectives, Coordination and Implementation Mechanisms, Monitoring and Evaluation Systems, and Action
Plan. 2

It should be noted that an additional crucial role of a national retail payments strategy or policy framework is
to help stakeholders to strengthen and publicize their goals and commitments in relation to the objectives of
the reform effort, clarify complementary roles and resolve any overlaps, and coordinate actions.

3.2 DFS, financial inclusion objectives and national financial inclusion strategies

In recent years the development of the NPS, in particular of retail payments, is being geared in many cases to
improving the efficiency of payments and to the promotion and achievement of financial inclusion objectives.
In this context, development of DFS and digital delivery mechanism are regarded as critical tools for the
achievement of both financial inclusion and efficiency objectives. Indeed, DFS are recognized as having a high
potential to safely expand financial services to under-served market segments (e.g. by improving proximity,
which is a basic condition for adopting and using a product/service like a transaction account), and to improve
the quality, appropriateness, and impact of financial services.

Proximity and overall convenience can be further enhanced by achieving interoperability of the various payment
services offered, which may involve interoperability between payment instruments of the same kind and even
across different payment instruments. 3

Hence, retail payments in many countries are being deliberately developed in this direction.

Developing retail payments to achieve financial inclusion objectives is sometimes documented in the broader
national retail payments strategy, or more often in a National Financial Inclusion Strategy (NFIS). In this last
regard, according to the World Bank (2012):

“Financial inclusion strategies are roadmaps of actions, agreed and defined at the national or subnational
level, which stakeholders follow to achieve financial inclusion objectives. Successful strategies coordinate
efforts with the main stakeholders, define responsibilities among them, and state a clear planning of resources
by, for example, prioritizing targets. A strategy can promote a more effective and efficient process to achieve
significant improvements in financial inclusion. Engagement with the private sector, including through structured
consultation, can help ensure the success of the strategy and the relevance of the goals set.”
In some cases, countries may have both a broader payments development strategy as well as a NFIS, in
which case the latter generally serves for providing more detailed and/or complementary guidance in the
specific areas more related to inclusion (e.g. the development of DFS ). In other cases, the NFIs may be the
4

2 The World Bank has developed “Guidelines for Developing a Comprehensive Strategy for Reforming Retail Payments”. These are
described in Annex 1.
3 Interoperability of payment instruments and services entails interoperability of access points/delivery channels.
4 DFS go beyond payment services to also include other financial services like credit or insurance.

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