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ITU-T Focus Group Digital Financial Services
Interoperability
Executive Summary
Much as it is critical for the development and diffusion of modern (digital) retail payment services across all
service users in a domestic economy, payment system interoperability is also essential in today’s globalizing
world economy to enable the smooth and safe flow of cross-border transactions across users from different
countries. This report approaches the issue of interoperability of payment systems and central bank oversight
of payment systems from an international perspective. This report is a companion to the "Payment System
Oversight and Interoperability" report by the ITU Focus Group Digital Financial Services – Interoperability
Working Group (WG).
Today the interlinking of national Payment System Infrastructures (PSIs) and their interoperability represent
important prerequisites for economic and financial development and constitute sources of potentially
significant risks. Therefore, they require public authorities in the relevant jurisdictions to mutually cooperate
in order to make them happen and to adopt suitable oversight provisions in order to render them sustainable.
The purpose of this report is to discuss payment system interoperability and oversight policy in the context of
international economic and financial integration.
Although international and national interoperability feature similar types of risk, the former raises specific
challenges. Such challenges bear implications for central bank oversight policy. These challenges essentially
stem from the scaling up to the cross-border level of the risks that are usually associated with national
interoperability and from the international harmonization and standardization which national PSIs need to be
subject to if they are to be part of an international interoperability agreement. While the principles elaborated
in the companion report remain valid in the context of international interoperability, the challenges raised by
the cross-border dimension of interoperability point to the need for adapting the scope of oversight of the
linked or shared PSIs.
This report considers the implications of PSI interlinking and international interoperability for central bank
oversight policy, and elaborates on a set of principles that complement those developed in the companion
report. The principles cover some critical institutional aspects which underpin the establishment of international
interoperability agreements, as well as the planning and implementation stages of the agreements, and their
sustainability. National public authorities and private sector stakeholders should consider adopting these
principles when establishing international interoperability agreements.
This report is not intended to be a regulatory document. The principles should be understood as providing
methodological guidelines to public authorities and private sector stakeholders involved in establishing
international interoperability agreements. This report’s main aim is to provide policy advice, recommendations
and indications to country authorities, PSI operators and administrators, and service providers.
Purpose of this Report
1. This is a companion report to the "Payment System Oversight and Interoperability" report by the DFS
Focus Group – Interoperability WG. The report examines the issue of interoperability of payment systems and
central bank oversight of payment systems from an international perspective . As much as it is critical for the
1
development and diffusion of modern (digital) retail payment services across all service users in a domestic
economy, payment system interoperability is essential in today’s globalizing world economy to enable the
smooth and safe flow of cross-border transactions across users from different countries.
2. The cross-border integration of trade and financial markets has accelerated with the successive waves
of trade and financial liberalization, which have taken place worldwide since the mid-to-late 1980s. The
international linking of critical market infrastructures for payments, securities, and lately, derivatives, have
1 As in the companion report, the term "interoperability" is generally understood here as the property of products or systems
which work with other products or systems without friction. When referred to retail payment systems, interoperability enables
users to make digital payment transactions with any other user in a convenient, affordable, fast, seamless, and secure way,
possibly via a single transaction account (see below). Interoperable payment systems allow two or more proprietary platforms to
interact seamlessly, enabling the exchange of payment transactions between and among payment service providers and, conse-
quently, users.
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