Digital Money and Payments

This Working Paper tells the stories of three of these banks: TymeBank in South Africa, Kotak 811 in India, and UnionBank in the Philippines. It takes a detailed look into how the selected businesses operate in their markets, what they do differently from traditional players, and how they are contributing to financial inclusion.

The coronavirus pandemic is a global crisis like no other in modern times, and there is a growing apprehension about handling potentially contaminated cash. The IMF has produced this paper as the first empirical attempt in the literature to investigate whether the risk of infectious diseases affects demand for physical cash. That being said, it…

The Global System for Mobile Communications (GSMA) compiled a report on QR code merchant payments and their relationship with mobile money providers (MMPs). Describing MMPs as key players in the provision of financial services in emerging markets, and why MMPs see QR code merchant payments as a potential adjacent opportunity to expand their products and…

The Garment Worker Diaries collect regular, credible data on the work hours, income, expenses, and financial tool use of workers in the global apparel and textile supply chain in producing countries. The objective of the project is to have the data inform: government policy decisions, collective bargaining, and factory and brand initiatives related to improving…

Microsave’s latest research on the impact of the COVID 19 on CICO agents in Kenya provides a comprehensive overview of the challenges that CICO agents currently face and their coping strategies. The report provides recommendations for policymakers and financial service providers to support them. The report highlights that the CICO agents face severe health risks…

This report from BIS, highlights the role central banks play in maintaining the safety and integrity of the payment system and reviews how central banks are embracing innovation.

Case study on the UK Faster Payments Service.

UNCDF organized this webinar to discuss how fast-tracking digital payments at a time of crisis can be crucial in delivering aid and in post-crisis recovery. Three speakers from the UNCDF Inclusive Digital Economies team, Ali Akram, Sabine Mensah and Jaspreet Singh, were invited to share their experience and expertise. The objective of the webinar was to…

Microsave’s ongoing research uncovered a set of unique challenges that cash-in/cash-out (CICO) agents currently face in the context of the COVID-19 pandemic. This report looks at the experience and behaviors of CICO agents across eight countries and explores ways to support them through favorable policies, even as the disease rages on around the world.

This diagnostic study by Cenfri explores Zambia’s payments landscape and provides insight and key learnings as Zambia’s 2018 – 2022 payment strategy to modernise the payment system and promote a cash-light society. This report outlines salient features of the Zambian economic context and political economy with a bearing on the National Payment System. It provides a…

For years, digital financial services providers have tried and failed to seize a multi-trillion-dollar opportunity: the large-scale digitization of retail payments in emerging markets.What must providers do differently to make digital payments work better than cash for merchants and their customers? CGAP Senior Financial Sector Specialist Peter Zetterli’s search for an answer led him to a…

Most digital financial services users around the world live in cash-based societies, and they require a cheap and easy way to switch between the worlds of cash and digital currency. Agent networks that provide this service tend to cluster around urban and peri-urban areas and larger rural towns. However, global evidence shows that emerging agent network…

Microfinance Opportunities, in collaboration with the Social Performance Task Force, conducted research to understand the experiences of garment workers in Bangladesh whose employers changed from paying them in cash to paying them digitally, either into a bank or a mobile money account. The purpose of this research is to identify ways in which an awareness…

This podcast from PYMENTS explores the trends and developments expected for 2020 and what disruptions are anticipated in the digital finance space.

Ekata’s e-book, The Value of Pre-Authorization Screening in the Payments Ecosystem of Today, highlights essential ways pre-authorization screening solves payment challenges. Learn not only about the difficulties in the transactions space, but how to create a layered identity verification approach that will solve PSD2 and fraud headaches.

Digitizing merchant payments represents a major opportunity for financial services providers in developing economies because small retailers around the world accept trillions of dollars in cash payments every year. The value of the data generated by digitizing those transactions is considerable and could be an even more compelling incentive to pursue merchant payments than direct…

In this report by Clearhaus, nine industry experts share their experience and give insights into how payments in Europe will change and become more digitalised.

This paper from IMF marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the…

The World Payments Report 2019 from Capgemini is the leading source for data, trends and insights on global and regional non-cash payments, the key regulatory and industry initiatives (KRIIs), and today’s dynamic payments environment. This 15th edition analyzes the digital transformation across the global payments market as new market participants like BigTechs, emerging technologies, and…

This study measured the impact of wage digitization on the uptake of mobile money by neighborhood residents and merchants. The difference-in-differences method was used to measure change between the digitized and non-digitized neighborhoods between baseline and endline surveys. The study provides detailed information on the population of each factory neighborhood, including RMG workers whose wages…

This report is based on the findings of the Reserve Bank of India committee, called to review the status of digitization of payments, identify gaps in the ecosystem, and suggest ways of plugging them. It was tasked to suggest a medium-term strategy for deepening digital payments and measures to strengthen safety and security.

Payments are changing at an accelerating pace. Users expect faster, easier payments anywhere and at any time, mirroring the digitalisation and convenience of other aspects of life. And, although paper-based payments like cheques and cash still play important roles, new technologies and market entrants are challenging the traditional bank-based payment systems.  In addition to changes in…

Gapgemini and BNP Paribas produced the World Payments report for the years 2017 and 2018, which summaries data, trends and insights into world payments.

Payment systems and remittances represent the foundations of financial sector stability and financial inclusion. Payment systems support financial stability by reducing systemic and settlement risks, acting as firewall to prevent contagion of losses, facilitating proper liquidity management, and through the effective transmission of monetary policy. Also, payment systems are a critical enabler of financial inclusion.…

The major UK payments systems are moving to the new global messaging standard for payments known as ‘ISO 20022’. This consultation paper discusses views on the proposed strategy for aligning credit payment messages across CHAPS, Bacs, and Faster Payments with the new global standard.

This White Paper provides an essential appraisal of the key trends in this rapidly developing marketplace, highlighting the primary factors shaping growth and assessing the opportunities presented by emerging payment mechanisms. It also presents a series of recommendations for current and prospective players across the payments value chain.  

Now in its sixth edition, FIS’ annual Flavors of Fast report traces the extraordinary growth of real-time payments around the world and the new consumer and corporate services that are being developed on them.

The U.S. retail payments industry is undergoing significant change to secure card payments by migrating to EMV chip cards for card-present or point-of-sale (POS) transactions. Effective October 1, 2015, card network operating rules changed to shift fraud liability to the merchant if it was not enabled to accept EMV chip credit or debit cards. As…

The Committee on Payments and Market Infrastructures has issued a report on Fast payments. So-called fast payment services make funds immediately available to the payee and can be used around-the-clock, on a 24/7 basis. As such, they overcome the limitations of traditional retail payment services, namely that usually the funds reach the beneficiary one or…

The 2016 World Payments Report examines developments in the global payments landscape. By partnering with BNP Paribas, in this year’s report, in addition to bringing insightful analysis of the global non-cash transaction environment to banks, we have provided our insights on transaction banking as well. Using the sliding bar, review global and regional non-cash payment…

This report from KPMG explores the changing world of money and how we can prepare for a digital future.

This white paper, from the Smart Card Alliance Payments Council, addresses current questions about the adoption of contactless payments, including: how contactless fits into today’s payment industry; what is currently different from earlier adoption attempts; and why now is the ideal time to go contactless. The white paper focuses on mass adoption of contactless EMV…

Against a backdrop of heightened regulation, the burden of legacy IT and a plethora of potential technologies and strategies to pursue, financial institutions must continue to drive forward in the digital age to retain market share, restore customer trust and avoid commodification. This report from TLT outlines the changes coming for a digital age and…

As the payments landscape evolves, cash remains a unique, resilient, and heavily used consumer payment instrument. Still, with new payment options and ways to shop, consumers are adapting how they view and use cash. The Diary of Consumer Payment Choice (Diary) serves as the Cash Product Office’s (CPO) primary data source on consumer payment behavior.…

Today’s consumer has access to more payment instruments than consumers of just a few years ago, as newer electronic payments are penetrating an established payments market, while older methods, such as cash and checks, remain important payment alternatives. As the number of available payment methods increases, so does the need to understand why consumers adopt…

This podcast on how digital payments adoption is rapidly increasing in China and how platforms like WeChat Pay and Alipay are redefining how transactions are conducted.

Overall, in China the payment system is less developed and electronic payment methods are less widely used than in European countries, while in this regard China is also relatively underdeveloped among the BRICS countries. That said, data indicate that in accordance with China’s economic growth since the turn of the millennium, major changes have also…

A collaborative report from EY and DBS Bank shares lessons to be learned from the rise of FinTech in China. With high levels of internet and mobile penetration, China is already the world’s largest and most developed retail e-commerce market, accounting for 47% of global digital retail sales – the result of a massive domestic…

India is in the throes of an unprecedented social experiment in enforced digital disruption, and the world has much to learn from it. Prime Minister Narendra Modi launched a surprise in early November, demonetizing 500 and 1,000 rupee bank notes. Read about the impact, success and challenges here.

This report is broken into two parts. Part one describes the background and process of the task force’s work and its motivation for pursuing faster payments solutions in the context of the current payments landscape. Part two shares the assessment of proposals for faster payments solutions, and recommend next steps for the industry to take…

Doing away with big currency notes is a movement that is picking up all over the world, says Kaushik Basu, a professor of economics at Cornell University. While it may be a good idea in theory for tackling tax evasion and the black market in Australia, he says policymakers have to be cautious in implementing…

The BIS Committee on Payments and Market Infrastructures has issued a report on Fast payments. So-called fast payment services make funds immediately available to the payee and can be used around-the-clock, on a 24/7 basis. As such, they overcome the limitations of traditional retail payment services, namely that usually the funds reach the beneficiary one…

Investments in financial technology have growth exponentially in the past decade — rising from $1.8 billion in 2010 to $19 billion in 2015 — with over 70% of this investment focusing on the “last mile” of user experience in the consumer space. The majority of this investment has also been concentrated in the payments area…

The fraudsters, phishers, hackers, and pickpockets who thrive off payment card fraud may soon have their work cut out for them. U.S. financial institutions have announced plans to add computer chips to their debit and credit cards in the next few years, a move likely to make payment card fraud more difficult. Compared with the…

This report on Zambia’s retail payments landscape is part of a series commissioned by FinMark Trust to examine the retail payments landscape in Malawi, Mozambique, Zambia and Zimbabwe. Zambia has made remarkable progress towards modernization of its national payment system, but there is a long way to go until most of the population can benefit…

Over the past decade, many innovations in retail payments have emerged. These may affect the retail payment market – for example, by influencing users in their choice of payment instruments and by significantly reshaping the payment processes. Innovations can potentially cut processing costs and increase social welfare. For central banks, however, they also raise policy…

As the Chinese population becomes increasingly connected, the power of mobile is being used to create a new generation of rich and convenient digital services. China Telecom provides an answer to the growing demand for fast, secure mobile payments in the form of their wallet, an NFC solution enabling users to download and manage a…

This paper by Boston Consulting Group and Google, explores the global digital payments revolution and how this in particular impacted on India. What made India open to digital payments, how were the barriers overcome, and what regulations are required are among other topics discussed.

Imagine a world in which consumers have control over their money and are connected directly to their payments mechanism of choice no matter where they are. In this world, shoppers pay anyone directly from their current/ checking accounts, banks reclaim a direct relationship with consumers and retailers drive store spending. Payment stakeholders collectively benefit by…

The purpose of this paper is to review the global real-time retail payments systems (RT-RPS) landscape, to analyse market drivers and trends, different approaches to deployment architectures, barriers to entry and the key success factors to ensure rapid adoption.  

One in three people in developed markets now carries a smartphone, and few doubt that banks will rely increasingly on digital channels to serve the fast-growing population of consumers who rely on multiple devices to conduct daily business online. In the United States, where smartphones account for more than half of mobile subscriptions, one-third of…

Money may make the world go around, as the song says. And most people in the world probably have handled money, many of them on a daily basis. But despite its familiarity, probably few people could tell you exactly what money is, or how it works. This post by IMF outlines that money can be…

In the year since it was launched, India’s national financial inclusion drive has generated plenty of headlines – and even scored a Guinness World Record. The Reserve Bank of India (RBI) announced that it has issued in-principal approval to 11 of the 42 applicants that requested Payments Bank (PB) licenses. The government’s goal for these banks…

This document outlines the position of the South African Reserve Bank on virtual currencies as it relates to their mandate and responsibilities. The document consists of five sections, i.e. the first three sections provide background, clarify concepts pertinent to the virtual currency discussion and draw a distinction between various categories of virtual currencies. The document…

This glossary of terms from the European Bank gives explanation of terms relating to payment, clearing and settlement systems.

When you put your money into a savings account or a checking account at a bank, the bank doesn’t just sock it away in a vault underground somewhere. Instead, it lends your money to other individuals and companies who need it. Thanks to the magic of fractional banking, when your banks lends your money to other…

Crowdfunding is an alternative way of raising capital that uses online platforms. The funds can be used for all kinds of projects, such as consumer loans, participating in a business start-up, acquiring a property or publishing a photo book. Although crowdfunding projects cover a wide range of genres, they all have one thing in common:…

The purpose of this paper from IFC is to describe trends in the growing number of innovations in the mobile money and digital payments space, and to understand how these simple systems are evolving to deliver a more effective and diverse portfolio of financial services. We have intentionally focused on innovations that have practical applications…

The Better Than Cash Alliance ‘Responsible Digital Payments Guidelines’ identify eight good practices for engaging with clients who are sending or receiving digital payments and who have previously been financially excluded or underserved.

This paper by Ignacio Mas documents the variety of ways in which digital financial service providers in developing countries have assembled and managed networks of retail stores as their agents for cash in/cash out payments and for account and product sales. It uses seven case studies to illustrate how optimal channel structures differ and develop…

This paper by Ignacio Mas reviews some of the bigger failures and some of the more promising experiences in the use of smartcards and mobile phones as payment platforms in developed countries. We selected just a few examples – from dozens of possibilities – and did not delve into much detail on any given scheme.…

Technology can enable banks and their customers to interact remotely in a trusted way through existing local retail outlets. Customers can be issued bank cards with appropriate personal identification number (PIN)-based or biometric security features, and the local store – the “banking agent” – can be equipped with a point-of-sale (POS) device controlled by and…

This paper by Ignacio Mas defines ‘business primitives’ as low-level operations from which higher-level, more complex operations can be constructed. It sets out to understand what most businesses in Kenya — the land of the ubiquitous M-PESA — do every day that could be simplified and reinforced through software. It focuses on potential functionalities related…

Cash imposes large costs on society, yet it is hard to envision moving to an entirely cashless society. If we cannot get rid of cash, then we need to change it in a way that makes it less costly for all to handle. This paper by Ignacio Mas considers the possibility of creating a new…

The Financial Sector Deepening Trust of Tanzania (FSDT) has conducted two censuses of cash outlets in Tanzania, in 2012 and again in 2014. The availability of places where one can exchange cash for transferable or storable electronic value is an essential component of financial access, and the spread of mobile money in recent years has…

Based on these findings and following an analysis of the available options, this European Commission report concluded that the recommended set of policy measures should consist of the introduction of a standard list of fees charged for services offered on payment accounts; measures aimed at ensuring the independence of websites comparing fees for services offered…

The Committee on Payments and Market Infrastructures (CPMI) has issued the report Non-banks in retail payments to examine the role of non-banks in retail payment services and analyse the implications of the growing importance of these entities in retail payments. The report is based on several fact-finding exercises that were conducted to support the analysis, revealing a…

The Better Than Cash Alliance ‘Responsible Digital Payments Guidelines‘ identify eight good practices for engaging with clients who are sending or receiving digital payments and who have previously been financially excluded or underserved.

This stage of connectivity is driving digital payments transformation – the migration of cash payments and plastic card payments to payments made over digital channels, either from dematerialized cards held on digital wallets or in the cloud, or from new digital payment mechanisms. The addressable market is huge: Accenture’s analysis shows that cash and card…

A study to understand the user case for financial services offered by retailers in South Africa. The study sought to understand the nature of this demand through an exploration of why and how people use retailers to access financial services. By identifying the key factors that influence the decision to use financial services from retailers…

Use of credit and debit cards in Kenya has grown substantially over the years with more people moving towards card-based payments. However, as promising as this progress is, Kenyans are yet to fully adapt to the culture of using credit and debit cards when shopping, especially when compared to other markets around the world. Financial…

While momentum has been growing behind digital payments in advanced economies for decades, movement in developing countries has lagged behind. Some have anticipated that there may be a leapfrog opportunity for accelerated movement towards this vision in Kenya, where the cutting edge M-PESA mobile payment service has grown to near ubiquity across social strata in…

This white paper will share what the group learned by providing an overview of the current U.S. payment tokenization landscape for mobile and digital commerce (vs. physical card payments); and describe how the different tokenization systems interoperate and the status of their implementation plans to a broader audience of industry stakeholders, policymakers, and regulators. Success…

Tokenization can be defined as the replacement of a high-value credential with a surrogate number that can only be used within a particular context. Since this definition is quite broad, the word ‘token’ can mean many things to many people. In the context of this whitepaper, the high-value credential is the PAN. Even within this…

Collected examples of branchless banking advertisements from around the world and interviewed providers about the lessons they’ve learned and how they’ve adapted their marketing strategies. The results – including case studies and examples of marketing collateral – are in this compilation deck.

This study examines the three shifts to electronic payments; aggregates the findings of a range of studies about the benefits of electronic payment adoption; identifies barriers that need to be addressed in order to achieve a shift toward “cash lite”; and concludes with a guide for governments, private sector businesses (as users of e-payments rather…

The provision of retail payment services is complex with many participants engaging in a series of interrelated bilateral transactions and subject to large economies of scale and scope along with strong adoption, usage and network externalities. This makes sound public policy difficult. This paper focuses on three types of market interventions for various countries, arguing…

The European Central Bank (ECB) carried out a study of the social and private costs of different payment instruments with the participation of 13 national central banks in the European System of Central Banks (ESCB). It shows that the costs to society of providing retail payment services are substantial. On average, they amount to almost…

This paper discusses the enablers and disablers of cross-border low value payments and regional integration. The current landscape for cross-border payments is dominated by correspondent banking relationships. Relying on one or more correspondent banks to send payments abroad is slow and expensive, and both sending and receiving banks often have little to no visibility of…

This paper has three objectives. It lays out the key differences between a banking and a payments mindset, within the historical context in which these fields have developed. It initiates a discussion on whether it is useful to articulate the digital payments space as an emerging profession distinct from banking, and if so, what might…

This paper provides a basic framework that explains how the major types of known digital money solutions relate to each other, i.e. what are the similarities and differences, and hence the pros and cons, of each. The broader purpose is to offer fresh new perspectives on how digital money grids might be pieced together in…

The Island Of Stone Money – large stones quarried and shaped on a distant island were used as money on the Island of Yap. After Germany acquired the island at the turn of the century, its officials had difficulty inducing the residents to repair the footpaths until they resorted to the desperate expedient of taking…

Globalization and technological innovation are two major forces affecting the financial system and its infrastructure. Perhaps nowhere are these trends more apparent than in the internationalization and automation of payments. While the effects of globalization and technological innovation are most obvious on retail payments, the influence is equally impressive on wholesale, or interbank, payments. Given…

This article hosted by SSRN, explores the importance of an efficient retail payment system and develops an integrated framework for evaluation of the retail payment system by policy makers. It examines the costs and benefits of the various types of retail payment system, focusing on the seven desirable benefits of the retail payment system: (1)…

It is commonly accepted that poor people find value in remote digital payments propositions. A large number of Tanzanians have flocked to emerging mobile payment solutions, whether it is to send money home, facilitate informal business transactions, pay for bills, or buy pre-paid electricity. This has created tantalizing prospects for such solutions to be the…

The future matters to business history, because the adoption of new technology and new organizational forms has often been driven by acceptance of a collective sense of what the future will be. Investments are made and strategies set on an industry-wide basis, influenced by the predictions of business consultants, industry groups, and futurists. To explore…

This report is part of a larger study, performed by The Fletcher School at Tufts University’s Institute for Business in the Global Context (IBGC) that seeks to ascertain the private costs and risks of cash management facing each of a set of stakeholders in the American economy: consumers, firms, the government, and also financial institutions.

Payment systems are changing profoundly through regulation, technology and competition from new entrants. This is a comprehensive introduction and reference on payment systems, covering payment system structure, international systems and settlements, and focusing on electronic transfers. Concludes with the future of the payments business.