Reforms in the area of retail payments are becoming increasingly important. Given the nature of retail payment systems and the structure of the retail payments industry, there are multiple challenges and roadblocks that impede those much needed reforms. Navigating through these challenges requires a comprehensive and strategic approach. In this document, the Payment Systems Development Group (PSDG) of the World Bank presents a framework for countries to use in developing a comprehensive retail payments strategy. This framework has been developed by synthesizing the past studies of the World Bank, the Committee on Payment and Settlement Systems (CPSS), and other international and national bodies, and also the worldwide experience of the World Bank’s PSDG in supporting payment systems reforms in over 100 countries.
This document is organized into five sections. The first section discusses the importance of retail payments and the ongoing efforts by public authorities and international organizations in this area. The second section scans the evolution of retail payment systems over the last five to six decades, the types of retail payment instruments, the challenges in increasing the adoption of electronic payment instruments, and finally the various processes and entities that together constitute the national retail payments system. The third section analyzes the public policy objectives in the area of retail payments. The fourth section builds a case for adapting the CPSS-World Bank general principles for international remittance services to build a framework for a comprehensive retail payments strategy. The fifth and final section of the report discusses the implementation aspects of a retail payments strategy. The report is intended to provide a framework that can be used to think through the retail payments landscape in a particular jurisdiction and to offer guidance on what the building blocks for a successful retail payments strategy can be.