Interoperability enables users worldwide to make electronic payment transactions with any other user – regardless of their service provider – in a convenient, affordable, fast, seamless and secure way via a single transaction account. However this remains a challenge in some of the world’s poorest countries where very few mobile payment schemes are truly interoperable. Yet, with as many as 2 billion people globally being either un-banked or underbanked, interoperability is a critical factor in the drive to achieve global financial inclusion.

Consequently, interoperability is a key work stream within the ITU’s Focus Group on Digital Financial Services, established to develop and disseminate best practice guidelines for policy and decision makers, operators and providers in the digital financial services sector.

‘The challenge can be quite complex involving a number of different entities’, said ITU Secretary-General Houlin Zhao. ‘Today we have published two reports to help address these interoperability challenges. We want to encourage the development of competitive payment systems that deliver fair access to their services.  We also want to see national payment systems driving collaboration and innovation to benefit a broader range of stakeholders.’

‘Access to Payment Infrastructures’, the first report, analyses access-to-payment-infrastructure issues around the world, and how these can affect the development of safe, efficient, interoperable and financially inclusive payment services.  The report focuses on non-banks that are playing an increasingly important role in payments, including the provision of payments services directly to end-users. Yet, despite their increasing importance in helping to address financial inclusion, many are still not accepted as direct participants of key payment infrastructures. This often leads to limited interoperability in the services/products they can offer. The report concludes that if a payment services provider (PSP) adheres to international standards and best practice, and establishes risk-based and objective access criteria, non-banks should be able to join as a direct participant.

Sacha Polverini, Chairman of the Focus Group and Senior Programme Officer of the Bill & Melinda Gates Foundation’s Financial Services for the Poor programme, said: ‘Payment system regulators and policy makers, in particular Central Banks who typically act as the lead payment system overseer in each country, can better support the poorest and most vulnerable segments of the population by promoting a competitive and dynamic payment services industry which includes non-traditional providers’.

The second report, ‘Cooperation frameworks between Authorities, Users and Providers for the development of the National Payments System’, analyses the role and cooperation process of key stakeholders in the development of national payment systems (NPS), in particular of retail payments. NPS have been designed in many countries to increase the overall efficiency of payment systems and to promote financial inclusion. However due to the many different stakeholders involved and the complex nature of NPS, the development of such frameworks can be challenging. This report has therefore identified the role public and private sector actors can play as well as discussed the structure of these cooperation frameworks in order to advance financial inclusion globally.

These reports are the first outputs produced by the Working Group on Interoperability.  They follow six reports which were published earlier this year that focussed on the DFS ecosystem, consumer protection, and on technology, competition and innovation. The Focus Group will publish its remaining results throughout the rest of the year to complete its roadmap.  Its next global meeting will be hosted in Dar es Salaam, Tanzania between 19 – 22 September 2016.

In 2014, ITU established a dedicated Focus Group incorporating 60 organizations from some 30 countries. The Focus Group has created four thematic working groups covering the following areas: DFS ecosystem; Technology; Innovation and Competition; Interoperability and Consumer Experience & Protection. The group’s goal is to develop guidelines, principles and toolkits based on international best practices, which will be adapted and implemented by countries looking to capitalize on digital and mobile technologies in their efforts to increase access to basic financial services for people that today remain at the margin of society.

About ITU

ITU is the leading United Nations agency for information and communication technologies, driving innovation in ICTs together with 193 Member States and a membership of over 700 private sector entities and academic institutions. Established over 150 years ago in 1865, ITU is the intergovernmental body responsible for coordinating the shared global use of the radio spectrum, promoting international cooperation in assigning satellite orbits, improving communication infrastructure in the developing world, and establishing the worldwide standards that foster seamless interconnection of a vast range of communications systems. From broadband networks to cutting-edge wireless technologies, aeronautical and maritime navigation, radio astronomy, oceanographic and satellite-based earth monitoring as well as converging fixed-mobile phone, Internet and broadcasting technologies, ITU is committed to connecting the world. www.itu.int