Page 22 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

On the other hand, as discussed earlier, practically any significant reform to the NPS will affect the interests,
business and likely also the operations of multiple stakeholders. Hence, a mechanism to exert leadership,
to conciliate interests and establish a reasonable level of consensus, and to coordinate actions becomes
imperative.

Different mechanisms can be used for these purposes. A National Payments Council (NPC) or National Payments
Committee is one of the most commonly used ones, especially in countries that have engaged in larger or more
significant reforms. It consists of a rather structured and, in many cases, formal mechanism with leadership
from the central bank.
The features of a NPC are described throughout the remainder of this section. Other mechanisms, including
those that have been created for discussing specific aspects and/or that are designed in a less structured or
less formal to accommodate certain specific objectives are discussed in section V of this document. 11

5.2 Typical features/terms of reference for a NPC

5.2.1 Objectives and foundation

The NPC is the mechanism through which dialogue on national payment system policies takes place between
the various stakeholders, securing a fair representation of the public and private interests involved in payment
system activities, and thus setting the conditions for achieving a reasonable level of consensus on policy
choices. In other words, the NPC is the place where PSPs, PIPs, overseers and users can voice and discuss their
expectations and challenges, and, eventually translate them into new desirable features of the NPS and/or
new and improved payment products and services.

Central banks are normally entrusted with the responsibility of setting up and leading the NPC. In addition to
being a primary mechanism for cooperation and for coordinating actions in the context of payment reform
efforts, central banks often also use the NPC channel to provide stakeholders with indications on its policy
orientation in the payments field, to shape its policy agenda by using feedback from the market, and to check
the efficiency, reliability, and fairness of the payment services provided.

In some cases the NPC is created by a statutory act (e.g. the payment systems law). There are advantages and
disadvantages to this approach. The NPC having statutory powers may be useful to establish its credibility
- especially vis-à-vis other authorities - and the legitimacy of the central bank to lead its work. On the other
hand, a NPC operating under strict rules and/or composition criteria may face difficulties in fulfilling one of
its key purposes which is to ensure effective dialogue and achieve reasonable consensus on its discussions.

5.2.2 General methodology and organizational structure

A well-designed NPC should have different levels, to clearly identify different roles: policy and strategy at the
highest level (i.e. ministers, central bank governor, CEOs and similar); a decision-making level for general and
operational aspects involving senior management of key stakeholders; and an implementation level involving
senior technical staff and other executives.

A specific example is a structure comprised of: (i) a high-level council, normally chaired by the central bank
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governor, the minister of finance or similar; (ii) a strategic committee, which is normally chaired by a senior
manager (e.g. deputy governor) of the central bank; and, (iii) thematic working groups which are chaired by
individuals and/or institutions with proven knowledge, experience and interest in the underlying topic(s).
All NPC structures should be supported by a permanent or quasi permanent Secretariat.

11 For example, in some countries, a body that resembles a NPC has been created not as an advisory/consultative body but as a
company with operational functions (e.g. definition and implementation of standards).
12 The specific names of the various levels tend to vary across countries. Yet, they tend to perform similar roles.

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