WWW.BETTERTHANCASH.ORG
AcceleratorstoanInclusiveDigitalPaymentsEcosystem
PrioritizationFrameworkandGuideAugust2016
Thistoolkitismeanttohelpplayersinacountryassessthebestuseoftime/resourcestoimplementaccelerators
Who? When? How? • Asawhole,thetoolkitmaybeusedbyanyplayer(publicsectororprivatesector)whoisdecidingbetweendifferentcoursesofac=ontopromotedigitalpayments.
• Differentacceleratorsarerelevanttodifferentplayers–forinstance,theregula=onacceleratorismeanttobeassessedbyaregulatorybody.
• Acceleratorsmaybepriori=zedinasubsetofthosethataremostrelevanttoaplayertodeterminethebestuseof=me/resourcestoimplement.
• Thetoolkitis=me-agnos=c–itmaybeusednomaEerwhereacountryisinitsdigitalpaymentsjourney.• Thetoolkitcanbeusedmany=mesbyaplayertodeterminewhatisthebestuseof=me/resourcesnowtoimplementanaccelerator.– Forinstance,uponfirstreviewofthetoolkit,aplayer
maychoosetoimplementanacceleratorinawaythatisbestsuitedtothemarket.Once=meandresourcesareagainavailable,thetoolkitcanagainbereviewedtodetermineanextacceleratortoimplement.
• Further,manyacceleratorsarenota“oneanddone.”Theymayrequireitera=onstoimplementinfull.– Forexample,promo=ngmerchantacceptance
infrastructurewillnotresultin100%ofmerchantsaccep=ngdigitalpaymentsatfirstimplementa=onoftheaccelerator.Rather,theplayercanaimtogettoamorerealis=cpor=on,andthencomebacktotheacceleratoratalaterpoint.
• Thetoolkitisnotmeanttoreplacetheneedfordetailedreviewofamarketthroughdiagnos=cs.
• Itisahigh-levelguidancetowardswhichaccelerators,ofthe10iden=fied,shouldbepriori=zedforfurtherreviewbeforeimplementa=on.
• Whenusingthetoolkit,aplayercanfollowthroughtheques=onsprovidedduringdiscussionsregardingwhatcourseofac=ontotakenext.
• Thetoolkitisnotprescrip=ve.Itisastar=ngpointoftheques=onsaplayershouldbeaskinghim/herselfwhileassessingop=onsavailable.Thetoolkitcanbethoughtofasadiscussionguide.
2
Theprioritizationmatrixandaccompanyingguidefosterdiscussionsinacountrytoprioritizetheacceleratorsacrosstheecosystem
3
MEDIUM-HIGHPRIORITYAddtoPipeline
ExecuteOnceFeasible
HIGHPRIORITYAddtoPipelineQuickWin
LOWPRIORITYDoNotAddtoPipeline
MEDIUMPRIORITYAddtoPipeline
FEASIBILITY(CostandCapacity)
IMPA
CT
(Digita
lPaymen
tsAccessa
ndUsage)
AcceleratorPrioriAzaAonMatrix
Evaluatetheaccelerator’simpactontheaccessandusageofdigitalpaymentsinthemarket.Forques=onstoguidetheimpactassessment,pleaseseepages3-4.
Evaluatethecostandcapacityofimplemen=ngtheaccelerator.Forques=onstoguidethefeasibilityassessment,pleaseseepages3-4.
Plottheacceleratorinthematrixonthele_,basedontheassessmentsmadeinsteps1and2.
Decidethetopacceleratorstofocuson,basedonpriori=za=on.
Discusswhichstakeholdersshouldbeinvolvedwithimplementa=onandbegincollabora=veconversa=onswithkeystakeholders.
Thepriori4za4onframeworkandguideisplayer-agnos4c.Anyplayercanu4lizeitwhendeciding
betweenasetofaccelerators
InstrucAons
Theecosystemframeworkforaccelerators
4
Policy/RegulaAon
DemandSide
SAmulatorsSupplySideDrivers
EcosystemAcceleraAonFramework
Themeanstoincreaseaccessandusageofdigitalpaymentsamongendusers
Theunderlyinginfrastructure,products,anddistribu4onnetworkssuppor4ngdigitalpayments
Policiesandregula4onsissuedinthemarketthatpertaintodigitalpayments
ImplementpoliciesthatincenAvizeandimproveconvenienceoftheusageofdigitalpayments
EstablishregulaAonthatpromotesinnovaAonindigitalpaymentswhilepromo=ngresponsibleprac=ces
Promotemerchantacceptanceinfrastructure
Establishashareddigitalinfrastructureforplayers
LeverageexisAngnetworksorplabormsfordeliveryofproductsandservices
Establishinteroperabilityinthemarket Digi=zegovernmentpayments
Digi=zerouAneusecases
DevelopauniqueidenAficaAonprogram
Digi=zegovernmentreceipts
Guidedquestionsforaccelerators:Supply-sidedriversNON-EXHAUSTIVE
5
Promotemerchantacceptanceinfrastructure
LeverageexisAngnetworksorplaYormsfordeliveryofproductsandservices
Establishashareddigitalinfrastructureforplayers Establishinteroperabilityinthemarket
• Whatpor=onofmerchantscurrentlyacceptdigitalpayments?
• Couldmerchantsgenerateaddi=onalrevenueiftheyacceptdigitalpayments?
• Howmuchtaxrevenuecouldincreasedtransparencygenerate?
• Whatistheimpacttofraudthatcanbemi=gatedwithdigi=zedmerchantacceptance(accountsetup,transac=on,scheme,systemic,moneylaundering)?
• Isthebuildingofinfrastructurefordeliveryabarrierforplayers?
• Doesthereachofanexis=ngnetworkextendtothedesiredmarketsegments?
• HowmanynewcustomerswouldaproductorserviceaEain?Whatwouldbetheassociatedrevenue?
• Doesasharedinfrastructure(e.g.,openAPIs)exist?
• Doesthelackofasharedinfrastructureposeabarriertoentryfornewplayers?
• Isthecountryahubforinnova=on?Wouldashareddigitalinfrastructureencourageinnova=on?
• Doeslackofinteroperabilitylimittheuptakeandusageofdigitalpayments?
• Isthereabusinesscaseforplayerstointeroperate?
• Aredigitalpaymentsplabormsandservicesatasufficientlevelofqualitytobeginconversa=onsregardinginteroperability?
• Howmuchwouldneedtobespentonincen=vesformerchantstoinstallandpromotedigitalpaymentsinfrastructure?
• Isconnec=vityadequatetoensureminimaloutagesofacceptancetechnology?
• Doescustomerdemandtotransactdigitallyexist?• Atwhatlevelaremerchanttosupplierpaymentsdigi=zed?
• WhatisthesizeofthesegmentsofmerchantsinthemarketthatwouldbeaEractedtodigi=zedpayments(e.g.,large,transit,u=li=esandservices,mid-sizedretailers,smallfarmers,smallsoleproprietors)?
• Dophysicalorvirtualnetworksexistwiththedesiredreach?
• Whatcostwouldridingonexis=ngnetworksrequire?
• Whatarethetechnicalconsidera=onstoleveraginganexis=ngnetwork?
• Doesleveraginganexis=ngsolu=onfordigitalpaymentsrequirewaiversorchangestogovernmentlawsorprocedures?
• Howmuchwouldthedevelopmentandmaintenanceofsharedinfrastructurecost?
• Doesthegovernmenthavethenecessaryinternalresourcesandskillsforsuchaninfrastructure?Ifnot,arethereprivatesectorplayersthatwouldcollaborate?
• Dotherightmo=va=onsexistacrosstherelevantstakeholderstodrivethedevelopmentandmaintenanceofasharedinfrastructure?(PleaserefertoBTCAGovernmentToolkittoweighmo=va=ondrivers)
• Whatinvestmentdoeseachplayerrequiretoimplementandmaintaininteroperability?Willthebenefitsofinteroperabilityoutweightheinvestment(businesscase)?
• Whatiseachplayer’scapacitytodedicatetopromo=nginteroperability?
• Doestechnicalcapacityexistwithinthemarkettodevelopandexecuteonaplantoachieveinteroperability?
• Howfeasibleisittogettherightplayersatthetabletocollaborateoninteroperability?
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IMPACTOFIMPLEMENTATION
FEASIBILITYOFIMPLEMENTATION
Guidedquestionsforaccelerators:Demand-sidestimulatorsNON-EXHAUSTIVE
6
DevelopauniqueidenAficaAonprogram DigiAzerouAneusecases DigiAzegovernmentpayments DigiAzegovernmentreceipts
• DomostadultshaveanIDthatmaybeusedtoverifyiden=ty?
• Whatregula=onhasbeenissuedrela=ngtotheuseofID(e.g.,eKYC)?
• Canpublicandprivatesectorplayersgainaccesstoadatabasetoverifyiden==es?
• Isliteracyabarriertotradi=onal(non-biometric)ID?
• Whataretherou=neusecasesthatremaintobedigi=zedinthemarket?
• Whataretheassociatedtransac=onvolumesofcash-basedrou=neusecases?
• Whatistheappe=teofmerchantsandconsumersofcash-basedrou=neusecasestodigi=ze?
• Howmuchtaxrevenuecouldincreasedtransparencygenerate?
• Hasthegovernmentdigi=zedallofitspayments?Ifnot,whataretheassociatedvolumesofcashtransac=ons?
• Howmuchcashleakageisexperiencedingovernmentpayments?
• Howmuch=mecoulddigi=zinggovernmentpaymentssavefortheenduser?
• Howmuchrevenuecouldadigi=zedgovernmentpaymentsservicegenerateforanengagedprivatesectorparty?
• Howwouldthegovernment’sdemonstratedcommitmenttocashlessimpacttherestofthedigitalpaymentsecosystem?
• Doallagenciesofthegovernmentofferadigitalop=onforpayment?
• Doagenciesaccep=ngcashpaymentexperiencecashleakagesorotherinefficienciessuchasmiddlemen?
• Wouldadigitalop=onforgovernmentpaymentsaveenduser’s=meormoney?
• IfaprivatesectorpartycollaborateswiththegovernmentforaP2GorB2Gprogram,whatwouldbetheassociatedrevenue?
• Woulddigi=zinggovernmentpaymentsdemonstrateacommitmenttocashless?Howwouldthisimpactthemarket?
• HowmuchwouldthedevelopmentofanIDprogram,theissuanceofcards,andthemaintenanceofthesystemcost?
• Doesthegovernmenthavethenecessaryinternalresourcesandskillsforsuchaprogram?Ifnot,arethereprivatesectorplayersthatwouldcollaborate?
• Whatprivacy,cultural,orreligiousconsidera=onscanimpactimplementa=onofauniqueIDprogram?
• WhatinfrastructuregapsaretheretodevelopabiometricID?
• Dotherightmo=va=onsexistacrosstherelevantstakeholderstodrivethedevelopmentandmaintenanceofauniqueIDprogram?(pleaserefertoBTCAGovernmentToolkittoweighmo=va=ondrivers)
• Whatinvestmentdoeseachplayerrequiretogetmerchantacceptanceinfrastructureintheloca=onofrou=neusecases?
• Whatarethecapabili=esofindividualstotransactdigitally?Woulddigi=zingrou=neusecasesrequireinvestmentineduca=onandawarenesscampaigns?
• Whatassociatedtaximplica=onswouldincreasedtransparencycauseformerchants?
• Whatfinancialinvestmentdoesdigi=zinggovernmentpaymentsrequire(e.g.,electroniccards,agentnetworks,etc.)?
• Dorecipientsofcurrentlycash-basedgovernmentpaymentshavethecapabilitytocollectadigitalpayment?
• Whatfinancialinvestmentdoesdigi=zinggovernmentreceiptsrequire?
• Isthereathirdpartythatcouldpartnerwiththegovernmentfordevelopmentandmaintenanceofasystemfordigitalreceipts?
• Doindividualsand/orbusinesseshavetheskillsandtechnologyneededtoremitdigitalpaymentstothegovernment?
• Dogovernmentagenciesofcurrentlycash-basedgovernmentreceiptshavethecapabilitytocollectadigitalpayment?
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IMPACTOFIMPLEMENTATION
FEASIBILITYOFIMPLEMENTATION
Guidedquestionsforaccelerators:Policy/Regulation
IMPACTOFIMPLEMENTATION
EstablishregulaAonthatpromotesinnovaAoninthedigitalpaymentsecosystemwhilepromoAngresponsiblepracAces ImplementpoliciesthatincenAvizeandimprovetheconvenienceofdigitalpayments
FEASIBILITYOFIMPLEMENTATION
• Doescurrentregula=oninthemarketposebarriersforplayerstoenterthedigitalpaymentsspaceorinnovate?
• Doescurrentregula=onensureconsumerprotec=on?• Doregulatorsmaintainanopendoorpolicywithplayers(bothlargeandsmall)?• Dofinancialregulatorscollaboratewithregulatorsofperipheralindustries(e.g.,telecommunica=ons)• Doregulatorsevolveregula=onasthedigitalpaymentsindustrydevelops?• Howwouldthegovernment’sdemonstratedcommitmenttodigitalpaymentsimpacttherestoftheecosystem?
• Whataretherisksofregula=onthatpromotesinnova=ontoconsumers?
• Hasthegovernmentissuedanypoliciestocreatedisincen=vesforusingcash?• Doesadequatemerchantacceptanceinfrastructurefordigitalpaymentsexist,toensurecashlesspoliciesandmandatesdonotdisadvantagepopula=ons?
• HowdevelopedistheICTsector?WhatimpactwouldamoreadvancedICThaveondevelopingthecountry?• Aregovernmentservicesdigi=zed?• Howwouldthegovernment’sdemonstratedcommitmenttogoingcashlessimpacttherestofthedigitalpaymentsecosystem?
• Whatstakeholdersarerequiredtobeengagedintheprocess(refertoBTCAGovernmentToolkittounderstandtheroleofstakeholders)?
• Howfeasibleisittogettherightplayersatthetabletocollaborateonnewregula=on?• Wouldnewregula=onbewelcomeinthemarket,orcausenega=vedisrup=on?• Woulddevelopingnewregula=onincuranycosts?
• Howareregulators’enforcementcapacity?• Howisthegovernment’sskills/resourcestodigi=zeitsgovernmentservicesandpromotetheICTsector?Doescapabilityexistinternally,orcoulditengageathirdparty?
• Howdocountrydemographics(e.g.,largeelderlypopula=onwithlowtechnicalliteracy)impactthepopula=on’sabilitytotransactdigitally?
NON-EXHAUSTIVE
7
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ApproachandAccelerators
8
ILLUSTRATIVEILLUSTRATIVE
Thestudyutilizedabottom-upapproachtoassessactivities&arrivedat10keyaccelerators,nestedintheecosystemcomponents
9
RefinedhighpotenAalacAviAesinto10core“accelerators”nestedintheecosystemcomponents
Gatheredmetricstoscoreimpactandapplicability;clusteredacAviAesintoacceleraAonpotenAal
IdenAfiedacAviAesusingaboaom-upapproach
Accelerators:ac=vi=esthatcanhaveastrongimpactonpromo=ngthedigitalpaymentsecosystem
Ac=vityA:Launching
mobilemoneyservice
Ac=vityF:Commiingto
MAYAdeclara=on
Ac=vityL:Installing
NFC
Ac=vityP:Digi=zingpublictransporta=on
Ac=vityO:Na=onal
Digi=za=onStrategy
Ac=vityD:Installingnew
ATMs
Ac=vityG:Expandingagent
networks
Ac=vityJ:Public/privatepartnerships
Ac=vityI:Digi=zing
G2P
Ac=vityE:Opendoorpolicy
Ac=vityN:Taxe-portal
Ac=vityC:Peer
educa=onprograms
Ac=vityB:mPOSvalue-
addedservices
Ac=vityH:IssuingdigitalID
Ac=vityM:Postalbanking
Ac=vityK:Agentnetworkregula=on
Ac=vityQ:Digi=zing
P2G
Ac=vityD
Ac=vityI
Ac=vityM
Ac=vityJ
Ac=vityJ
Ac=vityF
Ac=vityE
Ac=vityL
Ac=vityA
Ac=vityN
Ac=vityB
Ac=vityBAc=vityO
Ac=vityO
Ac=vityP
Ac=vityP
Ac=vityG
Ac=vityH
Ac=vityC
Ac=vityK
HighpotenAalforacceleraAon
Ac=vityQ
ImpactonEcosystem(MetricsScore)
Applicab
ilityto
MulAp
leM
arketC
ontexts
(#Cou
ntrie
s)
Supply-sideDrivers:
1. Promotemerchantacceptanceinfrastructure
2. Leverageexis=ngnetworksorplabormsfordeliveryofproductsandservices
3. Establishashareddigitalinfrastructureforplayers
4. Establishinteroperabilityinthemarket
Demand-sideSAmulators:
5. Developauniqueiden=fica=onprogram
6. Digi=zerou=neusecases
7. Digi=zegovernmentpayments
8. Digi=zegovernmentreceipts
Policy/RegulaAon:
9. Establishregula=onthatpromotesinnova=oninthedigitalpaymentsecosystemwhilepromo=ngresponsibleprac=ces
10. Implementpoliciesthatincen=vizeandimproveconvenienceoftheusageofdigitalpayment
SupplySideDrivers
1010
Promotemerchantacceptanceinfrastructure(P2B,B2B)
• DrivemerchantacceptancefordigitalpaymentsacrossMSMEstodeepenusageamongstconsumersandlargeen==eshigheronthevaluechain
• Createacompellingbusinesscaseforgoingdigitaltofacilitatetheonboardingofmerchants
• Context:InSweden,digitalpaymentmethodshavebeenincreasingdrama=callysincethe1995SwedishCompe==onAct,whengreatercompe==onincen=vizedbankstoinvestinnewtechnology,businessdevelopment,andmarke=ng.
• Results:Today,mPOSplabormshavebecomecommonplace,andmerchantsusingmPOStechnologyhavereportedsalesincreasesofupto30%.MorethanhalfofSweden’sbankbranchesnolongerkeepcashonhand,takedeposits,orhaveATMs.1
1)Henley,Jon."SwedenLeadstheRacetoBecomeCashlessSociety."TheGuardian.GuardianNewsandMedia,04June2016.Web.2)ZeSerli,Peter,andBenLyon."HowtoDriveMerchantPayments?BuildSoluVonsMerchantsWant."CGAP.3Aug.2015.Web.3)Arnfield,Robin."MexicanBanksAdoptMPOSPaymentsTechnology."MobilePaymentsToday.13Feb.2015.Web.4)BancodeMexico5)ACHColombia,BancodelaRepública(bancocentraldeColombia).ACHTransacVons.Web.
UbiquitousAcceptanceInfrastructure
TOPICS COUNTRYCASEEXAMPLES
• Context:InKenya,thepaymentsplabormKopoKopooffersvalue-addedservicesthatmakeacceptanceofmobilepaymentsbeEerthancashpaymentsforMSMEs.Its“PaymentsHub”enablesmerchantstotransferelectronicfundstheycollectfromcustomerstosupplierbankaccountsatalowercostthanwri=ngacheck.
• Result:Merchantswhou=lizethisservicewitnessgrowthintransac=onvolumes22%higherthanthosethatdonot.2
• Context:InMexico,Visa,thetaxauthority,andtheNa=onalChambersofCommerce,Services,andTourismcollaboratedonaschemein2014toprovidesubsidizedmPOSdevicestoMSMEs,whichcomprise64%ofMexico’sonemilliongroceryretailers.3
• Results:AsofFebruary2015,theschemeinstalled20,000mPOSdevices.3Mexicoexperienceda17%growthrateinPOSpaymenttransac=onsbetween2014and2015.4
OfferingValue-AddedServicesandOther
IncenAves
11
KEYLEARNING
• Context:InColombia,onlineacceptanceofdigitalpaymentsisanotablecomponentoftheecosystem.PSEwaslaunchedin2005asapaymentplabormtopaybillsormakemerchantpaymentsonline.Public-privatecollabora=onwasahallmarkofthisini=a=ve.
• Results:ThepercentageofACHColombiatransac=onsini=atedthroughPSEhasincreasedyear-over-year,from4%ofACHColombiatransac=onvolumesin2007to23%in20165.DigiAzingOnlinePayments
• Aligningincen=vessothatmerchantsacceptinstallingtheinfrastructure• Manypar=escanhavearoleinseingincen=ves(e.g.,government,banks,etc.)–fosteringcollabora=onamongthesepar=escanbeachallenge
InhibitorstoPromoAngMerchantAcceptance
Infrastructure
Leverageexistingnetworksorplatformsfordeliveryofproductsandservices
• Leverageexis=ngnetworkstoextenddigitalpaymentservicestowide-reachinguserbasesatarapidrateandtoimprovethebusinesscaseofbreakingintothedigitalpaymentsmarket
• Beyondridingonthenetworkas-is,makeappropriateinvestmentstoenhancethereachofthenetworksothatitreachesthetargetmarketaswellas,ifnotbeEerthan,compe=tors
• Context:InBangladesh,BangladeshPostleverageditsmassivepostaldistribu=onnetwork—including1,500postoffices,76%ofwhichareinruralareas,and8,500addi=onalruraloutlets—tointegrateunbankedpopula=onsinruralandremoteareasintothedigitalfinancialecosystem.1
• Results:Ayeara_erthelaunchofitsmobilemoneyservicein2010,italreadycaptured22.5%ofthemarketshareforremiEancemoneytransfersinBangladesh.Duetoitsexpansionintodigitalfinance,BangladeshPostearnedUS$3millionmorerevenuein2013thanthepreviousyear.1
1)Kachingwe,Nomsa,andAlexandreBerthaud."Bangladesh“AnUnexpectedSourceofBranchlessBankingInnovaVon?"UniversalPostal.Union.Dec.2013.Web.2)TencentAnnounces2016FirstQuarterResults.Tencent.18May2016.Web.3)Osawa,Juro."ChinaMobile-PaymentBaSleBecomesaFree-for-All."WallStreetJournal.22May2016.Web.4)Lee,Yimou,andPaulCarsten."UPDATE2—WeChatPaymentsRocketasChina'sTencentRidesGamingWave."ReutersAfrica.17Mar.2016.Web.
• Context:InChina,Tencent’smegapopularchatappWeChat,reaching762millionmonthlyac=veusersasofQ12016,2recognizedthebusinessopportunityofleveragingitsexis=ngonlinenetworkandbeganallowingitsuserstomakewallet-basedP2Ptransfersandotherdigitalpaymentsfromthechatplaborm.
• Results:Between2014and2015,Tencent’smarketshareinthemobilepaymentsspacenearlydoubledfrom11%to20%.3AsofNovember2015,WeChatdisclosedthatusershadconnected200millionbankcardstotheservice.2Es=matesindicateWeChatcanenablemorethanUS$500billionintransac=onsin2016.4
LeveragingNaAonalPostalNetworks
LeveragingSocialMediaNetworks
TOPICS COUNTRYCASEEXAMPLES
12
KEYLEARNING
• Existenceofadigitalorphysicalnetworkwithabroadreachtoatargetmarketand/ormakingthenecessaryinvestmenttoaugmentexis=ngdigitalorphysicalnetworkstocompetewithcompe=tors
InhibitorstoLeveragingExisAngNetworksor
PlaYorms
Establishashareddigitalinfrastructureforplayers
• Shareddigitalinfrastructurereducesbarrierstoentryforpar=cipantsandpromotesinnova=on
• Ensuresuchdigitalinfrastructureisopensourcewithappropriateaccessrightssothatplayersarenotexcludedfromthebenefitsoftheplaborm
• Context:InIndia,thegovernment’s2015mandateforanopenAPIpolicymadepossible“IndiaStack,”thecompletesetofAPIthatenablesthedevelopmentofpayment-enabledapplica=ons.AadhaarisakeyelementofIndiaStack--Asavarietyofthirdpar=es,includingprivatesectorplayers,canaccessAadhaar’sdatabase,itsexistenceandubiquityhashelpedcreateandadvancenovelbusinessmodelsindigitalpayments.
• Results:Aadhaar-enablede-KYCprocessescansavebanksandtelcosUS$1.5billionoverthenextfiveyearsduetotheelimina=onofinefficientpaper-basedverifica=onandmovement/storageofpaperdocuments.1
1)Chopra,Puneet,PareshRajde,VivekGupta,PriyankMishra,andAkshatPathak."E-KYCandtheIndiaStack–ATransformaVveBlueprintforEmergingMarkets."MicroSave,Mar.2016.Web.2)Vassil,Kristjan.“EstonianE-GovernmentEcosystem:FoundaVon,ApplicaVons,Outcomes.”Rep.WorldDevelopmentReport,June2015.Web.
• Context:InEstonia,thegovernmentdeploysX-Road—adataexchangelayerthatenablessecureInternet-baseddataexchangebetweeninforma=onsystems—tomakeiteasierforpublicandprivatesectorins=tu=onstoinnovate.Byconnec=ngtheirinforma=onsystemswithX-Roadandpar=cipa=ngindataexchange,theycanleveragealready-exis=nginfrastructureandsaveresources.Thus,X-Roadpromotesdigitalpaymentservicesbyloweringbarrierstoentry:forexample,byfacilita=ngrapidmovementofdatabetweensystemsandintegra=nge-services,X-Roadhelpedenableadigi=zedincome-taxdeclara=onsystemthroughlinkingemploymenttaxrecordstoindividualci=zens’taxrecords.
• Results:Byelimina=ngtheneedforin-personinterac=ons,X-Roadsavedanes=mated2.8milliontotalhours,or3,225years,in2014.2
OpeningtheMarkettoInnovaAonsthroughOpen
APIs
Government-DeployedSharedInfrastructure
TOPICS COUNTRYCASEEXAMPLES
13
• Context:InPeru,thegovernment,financialins=tu=ons,telecommunica=onscompanies,andlargepayersandpayeescreatedapartnershipanddevelopedaninnova=vepaymentservicecalled“Bim,”whichisthecountry’sfirstfullyinteroperablemobilemoneyplaborm.Bimpoolsexis=ngfinancialinfrastructureacrossPeru,andmembersofthepartnershipcanusetheplabormtoissueaffordableproducts,compe=ngondesignwithinaninteroperableplaborm.
• Results:BimonlylaunchedinFebruary2016,butwithinjust3monthsoflaunch,morethan126,000accountshaveopened.Itistarge=ng5millionregisteredaccountsby2020.
Public-PrivateApproachtoDevelopingShared
Infrastructure
KEYLEARNING
• Geingtherightplayersatthetabletocollaborateonthedevelopmentandmaintenanceofthesharedinfrastructure• Aligningincen=vestodedicatetowardssuccessfulimplementa=onandmaintenanceoftheinfrastructure• Lackoftechnicalcapabilitytostrategicallyplanandexecute
InhibitorstoEstablishingaSharedDigitalInfrastructure
Establishinteroperabilityinthemarket
• Bringtherightplayerstothetabletocollaborateonestablishinginteroperabilityandensurebusinesscasesarealigned• Accountformarketcontextslikelevelsoffragmenta=ontosuccessfullyimplementinteroperability
• Context:InTanzania,threemobilemoneyproviders—Tigo,Airtel,andZantel—announcedapioneeringinteroperabilityagreementinJune2014,enablingcustomerswithdifferentmobilewalletsandnetworkstosendmoneytoeachother.Privatesectorplayerswerewillingtocollaboratebecauseithelpedsolveamarketissuetheywerefacing:lackofA2Ainteroperabilityhadcausedindustry-widefragmen=ng,impedingtheu=lityanduptakeofmobilefinancialservices.
• Results:A_ertheagreement,thethreemobilemoneyplabormssawanincreaseof3.5=mesthevalueoftotalofflinetransac=ons.1
1)“Africa’sFirstUniversalMobileMoneyServiceGoesLiveinTanzania.”Millicom,18Feb.2016.Web.3)"InteracDebit."Interac.Web.3)NauVyal,Anant."BranchlessBankingInteroperabilityinPakistan:APromisingStart."GSMA,7Apr.2016.Web.4)Osawa,Juro."ChinaMobile-PaymentBaSleBecomesaFree-for-All."WallStreetJournal.22May2016.Web.5)BTCAInCountryMissionStakeholderinterviewsinGhana,June2016
DominantPlayers:• InChina,sincethedigitalpaymentsecosystemisdominatedbytwomajorplayers–
Alipaywith68%marketshareandWeChatwith20%4—interoperabilityisnotforeseenintheshorttermduetolackofincen=ves:bothplayersaresucceedingindependently,reducingtheneedtocollaborate.
TheNeedtoAlignBusinessCasesandEnsureIndividualPlaYormsareSound• InGhana,mobilemoneyplayershaveconcernsregardingdifferentbusinesscases–
forinstance,playersthatmadesignificantinvestmentsinagenetnetworkshavefreeriderconcerns5
• Further,inGhana,mobilemoneyplayersnotedthattheydonotyetfeelreadywiththeirownplabormstointeroperatewithothers5
Private-SectorDrivenApproachtoBilateral
IntegraAon
InhibitorstoEstablishingInteroperability
TOPICS COUNTRYCASEEXAMPLES
• Context:InPakistan,wheremobilemoneyisbank-led,connec=ngtotheexis=ngswitchwasthemostcosteffec=veandstrategicapproachforinteroperability:theoperators,asbanks,werefamiliarwithswitchesandunderstoodthebenefits,andalsowantedtheabilitytoconnecttothebroadermobilefinancialecosystem.
• Results:Followingtheconnec=onofmobilemoneyplabormstothena=onalswitchin2014,thevalueofmobilemoneytransac=onsincreased225%organicallyinjustthreequartersbetween2014and2015.2
PrivateSector-DrivenSwitchArrangement
14
KEYLEARNING
• Context:TheInteracsystemwasfoundedinCanadain1984asacollabora=ve,nonprofitinterbanknetworkbetweenfourofthefivelargestfinancialservicescompaniesandthelargestassocia=onofcreditunionbanks.Theyestablishedstandardsforasecure,real-=mePOSdebitnetwork.ThisdeliveredinteroperabilityinCanada.
• Results:InteracenableddigitalpaymentsinCanada.Thesystemhandled5.2Bdebitcardtransac=onsin2015.3
UsingNetworkCapabilitytoEnableLow-Cost,Secure
TransacAons
DemandSideStimulators
1515
Developauniqueidentificationprogram
• AuniqueIDisanenableroffinancialinclusion• IncorporatedigitaltechnologieslikebiometricstocombatthebarrierstoIDposedbypoorliteracy• Provideonlineaccesstoacentralizeddatabasetoverifyiden=tyinforma=on,butensurepropersafeguardstosafeguardconsumerprivacy
• Context:Priortothedevelopmentandissuanceofacentralizediden=tysolu=on,therewerehighbarrierstoobtainingiden=fica=onforIndia’spoor,excludingthemfrommanyrightsandservicessuchasopeningabankaccount.Further,highfrequencyofblackmarketIDfraudwascausingleakages:Whilethegovernmentwasspending4%ofGDPonsubsidies,es=mateswerethat40-50%ofthisspendwaslostasleakages.1
• Results:Recognizingtheseissues,theIndiangovernmentestablishedtheUniqueIden=fica=onAuthorityofIndia(UIDAI)in2009,issuing12-digituniqueiden=ty“Aadhaar”numberstooveronemillionofits1.2billionresidentssinceitsincep=on.2Aadhaarhasbeenusedforvariouspolicyini=a=ves,suchasdigi=zingLPGsubsidieswhichoffersthegovernmentUS$2billionpoten=alsavingsintrimmedleakages.3
1)"JAMTrinityatWorkforDirectBenefitTransfer."ICICISecuriVes,14Sept.2015.Web.2)"AadhaarDashboardSummary."UniqueIdenVficaVonAuthorityofIndia,July2016.Web.3)"IndiaSaved$2BillionbyReformingFuelSubsidyDelivery."TheTimesofIndia,2July2015.Web4)Vassil,Kristjan.“EstonianE-GovernmentEcosystem:FoundaVon,ApplicaVons,Outcomes.”WorldDevelopmentReport,June2015.Web.
• Context:Thena=onalIDcardsysteminEstoniaishighlydeveloped,andservesasdigitalaccessforallofEstonia’ssecuree-services.Policyandregula=onexiststosupportthedigitalIDsystem:thelawrequiresallci=zensovertheageof15tohaveanID,andobligatesthepublicsectortoacceptdigitallysigneddocuments.
• Results:Morethan1.2millionIDcardsinEstoniaareac=ve,represen=ng94%ofEstonia’sresidents.4Currently,98%ofbankingtransac=onsand95%oftaxdeclara=onsaredoneelectronically,andhavingapaperlessgovernmenthasenabledsavingsthatequateto2%ofGDP.5
Lackofacentralizeddatabase:• InGhana,thelackofana=onal,centralizediden=fica=onmethodanddatabasehashamperedthedevelopmentaninclusivedigitalpaymentsecosystem.
• While98%ofGhanaiansreportatleastoneformofiden=fica=on,6thewidevarietyofformsofiden=fica=onandiden=tydatabasesinexistencemakeitdifficultforplayersperformefficientKYC.
Lowlevelsofliteracy:• InNigeria,lowlevelsofliteracypreventedfinancialinclusion,asopeningandaccessingbankaccountswaslinkedtotradi=onalformsofIDthatrequiresignaturesforauthen=ca=on.
• Biometricsserveasawaytoovercomethisobstacle:a_erlaunchingaMasterCard-brandedna=onalbiometriceIDcardthatenableselectronicpaymentsforpreviouslyfinanciallyexcludedpopula=ons,Nigeriahadayear-over-yeargrowthof18%indigitalpaymenttransac=onvolumes.7
5)"E-EstoniaFinancialIndicators."E-Estonia,2015.Web..6)"FinancialInclusionInsights."CGAP,2015.Web.7)PaymentVolumes,CentralBankofNigeria.Web.
DevelopingaCentralizedIdenAtyDatabase
UnlockingDigiAzaAonthroughtheIssuanceofa
DigitalID
InhibitorstoDevelopingaUniqueIDProgram
TOPICS COUNTRYCASEEXAMPLES
16
KEYLEARNING
Digitizeroutineusecases(P2B)
• Iden=fyanddigi=zepaymentusecasesthatindividualsu=lizeonarou=nebasistoincreasecomfortwithdigitalpaymentsandincreasedigitaltransac=onvolumes• Indigi=zingsuchusecases,accountfortheexis=ngbusinesscaseassociatedwithcashtodevisetherightapproach
• Context:InKenya,Tanzania,andUganda,M-Kopa’srent-to-ownsolarenergyproductsprovidepoorruralhouseholdswithcheapsolarpower.
• Result:AsofJuly2016,M-Kopahasprovidedover375,000homeswithaffordableservice,withprojectedsavingsforthesecustomersofUS$280millionoverthenextfouryears.1
• Context:InRwanda,Berlin-basedMobisolpartneredwithMTNRwandain2013toofferoff-gridcustomerssolarhomesystems.Customersusemobilewalletstobuyprepaidenergycredit.
• Results:In2014,customersmadeanaverageof1.7paymentspermonthonthesystem,incomparisontotheindustrybenchmarkofonetransac=onevery90days.20%ofMobisolcustomerswerepreviouslyunregisteredforMTNmobilemoney.2
1)M-Kopa,CompanyOverview.Web.2)Cohen,Ilana.“MobileforDevelopmentUVliVes:MobisolPay-as-you-goSolarforEntrepreneursinRwanda.”GSMA,Jan.2016.3)“GlobalLandscapingStudyonDigiVzingP2GPayments.”Rep.:KarandaazPakistan,CGAP,2016.4)MinistryofRailways.PressInformaVonBureau.RailwayMinisterLaunchesNextGeneraVonE-TickeVng,FreightE-DemandSystem,FreightE-DiversionSystemandGoIndiaSmartCard.GovernmentofIndia,13Aug.2014.
• InIndia,therailwaye-=cke=ngsystemcaterstoonehalfofthedaily1.6millionpassengers,4andisthelargeste-commerceplayerinIndiabyrevenue.5In2015,itintroducedamobileappanddigitalwalletspaymentsop=on.PaytmandMobikwikincen=vizecustomerstousetheirplabormsfore-=cketsbyoffering100%cashbacksontransac=onconveniencefees.
• InKenya,GooglepartneredwithEquityBanktocreateNFC-basedcashlesspaymentmechanismsforpublictransporta=onin2013.Implemen=ngthecardsfailedby2015duetocorruptdrivers’misalignedincen=ves,sincetheyprofitfromchargingvariableratesincashpayments.
• InRwanda,alocalITcompanyTap&Golaunchedanelectronicbuspaymentsystemin2015,inpartnershipwithlocalgovernmentandtransportoperators.IncontrasttoKenya,thelocaldesigncancontrolfactorslikeinformaleconomyprofitstructures.Withinfourmonths,20%ofthebustransportmarketwasusingthedigitalpaymentop=on,andbusrevenueshadmorethandoubled.3
SolarPay-As-You-GoEnergy(PAYG)
DigiAzingPaymentsforTransportaAon
TOPICS COUNTRYCASEEXAMPLES
17
KEYLEARNING
• Context:InTanzania,thegovernmentbeganofferingmobile-enabledpaymentsforwateru=litybills,digi=zingwhatwaspreviouslyaninefficientand=me-intensivecashtransac=on.• Results:Withintwoyears,thereweremorethan2Musersofthesedigitalpayments,andthegovernmentachieved13.4%increaseinrevenuepercustomer.3
WaterPayments
• Context:ThePhilippinesisthe3rdlargestremiEancemarketintheworld6,makingthismarketripeforthebenefitsofdigi=za=on.BothSmartandGlobelauncheddigitalremiEanceservicesin2004.• Results:Asof2012,oneinthreecustomersofGCASHusetheplabormforinterna=onalremiEances.8Within2yearsofSmart’sproductlaunch,theservicehadamonthlyaverageof1.5MusersremiingUS$15M.9
DigiAzingInternaAonalRemiaances
• Ensuringthattheapproachtakentodigi=zepaymentsaccountsfortheincen=vesassociatedwithcashtransac=ons,asshowcasedbyKenya,wheretheplayersbenefitedgreatlyfromcashpaymentsandthereweredisincen=vestodigi=ze.
• Manyrou=neusecases,suchasgrocerypurchases,takeplaceatMSME’s,whicho_enrequireincen=vestoinstallacceptanceinfrastructureandencouragetheircustomerstotransactdigitally.• Anadequatedomes=cdigitalpaymentsecosystemmaybeaprerequisitetosuccessfullaunchofaninterna=onalremiEanceservice
InhibitorstoDigiAzingRouAneUseCases
5)Aroral,Kim."BehindtheScenesofIndia’sBiggestE-commercePlayer."TheTimesofIndia,31Jan.2016.6)BangkoSentralNgPilipinas."PaymentsandRemiSances."FinancialInclusioninthePhilippines2016.7)Chan,Connie."MoneyasMessage."AndreessenHorowitz.24July2016.Web.8)Baltao,Paolo."MobileInternaVonalRemiSancesinthePhilippines."CGAP.27Mar.2012.9)“MobileMoneyinthePhilippines–TheMarket,theModelsandRegulaVon.”GSMA,2009.
• Context:InChina,itiscommontogiveredenvelopescontainingcashasgi_s.WeChatlaunchedaP2Ppaymentfeaturein2014calledRedPackets,buildingoffthisculturalnorm.• Results:Inthe2016ChineseNewYear,over420MWeChatuserssent32Bdigitalredenvelopesoverthecourseofsixdays.Over60MuseresinChinacon=nuetosendRedPacketsdaily7
RidingonExisAngCulturalNorms
Digitizegovernmentpayments(G2P,G2B)
• Digi=zinggovernmentpaymentscanplayapowerfulroleinadvancingthedigitalpaymentsecosystembycapturingindividualsandbusinessesintodigitalpaymentsproductsandservices,enhancingpeople’scomfrtwithdigitalpaymentsthroughthegovenrment’sdemonstratedsupport,andgenera=ngefficienciesandcostsavings• Digi=zegovenrmentpaymentswithcloseregardtotheexis=ngfinancialecosystem
• Context:InBrazil,thegovernmentmergedmul=plepre-exis=ngCCTprogramsintotheBolsaFamiliaProgram(BFP),whichoperatesthroughanelectronicbenefitcard(EBC)linkedtobankaccountsatthestate-ownedbankCaixa.
• Results:BFPsavedthegovernment31%intransac=oncosts.1BFPassistsapproximately50millionpeople,¼ofthepopula=on,byprovidingthemwithaminimumlevelofincomethroughthesebank-accountbasedgranttransfers.2Ayeara_erlaunchin2004,theprogramcatalyzed20-25%ofBrazil’sdrama=cdecreaseininequalityand16%ofitsdecreaseinextremepoverty.3
• Context:InSouthAfrica,theSouthAfricanSocialSecurityAgency(SASSA)migratedsocialgrantrecipientstoelectronicpaymentsystems
• Results:Thegovernmentcutfeesby54%whentransferringpaymentsintomainstreamcommercialbankaccounts.1
• Context:InColombia,whentheCCTprogramMasFamiliasenAcciónimplementeddigitalpaymentsin2009,itincurredmorecostsforthegovernmentthancash-basedprogramsbecauseitaEemptedtobuilditsdistribu=onnetworkfromscratch.1
• Results:Asaresultoftheseissues,in2012thegovernmentgaveBancoDavivienda’smobilemoneyplabormDaviPlataacontracttofacilitatepaymentsto900,000beneficiariesofMasFamiliasenAcción,helpingthedigi=za=onprocessandforcingBAtoaccelerateitsexpansion.4
1)Parker,SarahRotman."BranchlessBankingandFinancialInclusionforG2PRecipients."CGAP.15Mar.2012.Web.2)"BolsaFamilia:AnInternaVonalExampleofSocialInclusion.AnInterviewwithHelmutSchwarzer."SocialProtecVon,July2015.Web.3)Lindert,Kathy,AnjaLinder,JasonHobbs,andBénédicteDeLaBrière."TheNutsandBoltsofBrazil’sBolsaFamíliaProgram:ImplemenVngCondiVonalCashTransfersinaDecentralizedContext."WorldBank.May2007.Web.
DigiAzingG2PPaymentsthroughExisAngCCT
Programs
TOPICS COUNTRYCASEEXAMPLES
4)Consultores,Marulanda."DaviPlata:TakingMobileG2PPaymentstoScaleinColombia."CGAP.01July2015.Web.5)Babatz,Guillermo.SustainedEffort,SavingBillions:LessonsfromtheMexicanGovernment’sShivtoElectronicPayments.BeSerthanCashAlliance,2013.
18
KEYLEARNING
• Context:TheMexicangovernmentme=culouslyplannedandexecutedacentraliza=onanddigi=za=onofgovernmentpaymentstosuppliersandindividualsforpayrolls,pensions,andsocialbenefits.• Results:Thedigi=za=onandcentraliza=onsavedthegovernmentUS$17Bperyear,or3.3%oftheexpendituresrela=ngtosalaries,pensions,andsocialtransfers5
CentralizingandDigiAzingPaymentstoIndividuals
andBusinesses
• Adigi=zedgovernmentpaymentneedstoaccountfortheexis=ngdistribu=onnetworkthatreachesthetargetrecipientbase• Colombiaincurredmuchgreatercostwhendigi=zingitsCCTprogramthandidBrazilandSouthAfrica,largelyduetotheirini=alaEempttobuildadistribu=onnetworkfromscratch
InhibitorstoDigiAzingGovernmentPayments
Digitizegovernmentreceipts(B2G,P2G)
• Digi=zegovernmentreceiptstopromotecomfortwithdigitalpaymentsandimproveefficiencies• Collaboratewithprivatesectorplayerstoleveragenecessarytechnicalcapabili=es• UndertakeP2GandB2Geffortswithcloseregardtothecountry’sexis=ngfinancialecosystem
• Context:InTanzania,acash-basedsystemofpayingformotorvehiclelicenseswashighlyinconvenientforindividualsandresultedinamiddle-mansystemthatcreatedrevenueleakagesforthegovernment.TheTanzanianRevenueAuthorityandVodacomenteredintoapartnershipin2013toofferadigitalop=ontopaythefeeviamobilemoney.
• Results:Withinthefirstthreeweeksoftheservice’slaunch,42.5%ofUS$2.1Minlicensefeeswascollectedthorughmobilemoney.1
1)"Tanzania:Tra,VodacompartnerontaxcollecVon."Adlip.2013.2)Morisset,Jacques,CharlesMoret,andJulieRegolo.“HowtoPushEfficiencyEnhancingReformsatthePortofDarEsSalaam?”TheWorldBank,Feb.20133)“TanzaniaCouldBoostItsEconomybyReformingthePortofDarEsSalaam.”TheWorldBank,21May2013.Web.4)“GlobalLandscapingStudyonDigiVzingP2GPayments.”KarandaazPakistan,CGAP,2016.5)Hokans,James."CountryDiagnosVc:Philippines."BTCA,July2015.6)Shrader,Leesa."InnovaVoninPersontoGovernmentPaymentsinthePhilippines."CGAP,5Sept.2013.
• Context:TheDar-es-Salaamporthandles90%ofTanzania’sexport/importtraffic2,andithassignificantimplica=onsonthelandlockedcountriesthatsurroundTanzania.However,un=l2013,itwasconsideredoneofthemostinefficientportsintheworld.Assuch,in2015,thegovernmentimplementedane-paymentsystemthatenablesbusinessestopayportfeesremotely.
• Results:ImprovingtheefficiencyoftheDar-es-SalaamportcanenableUS$1.8BincreaseinTanzanianGDP3andUS$157MinimprovedrevenuefortheTanzaniangovernment.2
DigiAzaAonofGovernmentReceiptsforMotorVehicle
Licenses
DigiAzaAonofGovernmentReceiptsforBusinesses’
CustomsPayments
TOPICS COUNTRYCASEEXAMPLES
• Context:InGhana,thegovernmentlaunchedBacktoSchoolin2014asamobilepaymentsolu=onforparentstomakepaymentsfortheirchildren’sschoolfees.ItteamedwithMTNforthedevelopmentandmaintenanceoftheservice.MTNseesofferingBacktoSchoolasawaytoaddvalue-addedservicestoitsmobilemoneyplaborm.
• Results:Schoolshavebenefitedfromgreatertransparencyandmorepredictablerevenues.Individualshavebenefitedfromthereduc=oninthecost,=me,andriskofmakingpaymentsinperson.Asof2016,over100schoolsareusingtheBacktoSchoolservice,and5%ofMTNmobilemoneycustomersuseBacktoSchooltomakeschoolfeepayments.4
DigiAzaAonofReceiptsforSchoolFees
19
KEYLEARNING
• Alackofsufficientdigitalpenetra=onamongatargetgroupinhibitsthesuccessofP2Gini=a=ves.In2013,SmartinthePhilippineslaunchedBayadLoadwhichenabledworkerstoremitgovernment-mandatedP2Gpaymentsdigitally.However,asof2015,only1%ofallP2GpaymentsinPhilippineswereelectronic,5partlyduetothelackofdigitalfinancepenetra=onamongpoorworkers.6
InhibitorstoDigiAzingGovernmentReceipts
Policy/Regulation
2020
Establishregulationthatpromotesinnovationinthedigitalpaymentsecosystemwhilepromotingresponsiblepractices
• Establishandoverseearegulatoryframeworkthatissound,non-discriminatory,andpropor=onalinordertopromoteinnova=on,adequatelyprotectcustomers,andpromoteusageofdigitalpayments• Consultwithplayersinthedigitalpaymentsecosystemtoestablishregulatoryframeworksthatappropriatelyaccountforplayers’needsandobserva=ons• Evolvearegulatoryframeworkasthemarketchangesbyunderstandingthegapsandbarriersofexis=ngregula=on,consul=ngwithstakeholders,andcollabora=ngwithotherregulators
• ContextInTanzania,theBankofTanzania(BOT)hastakenanevolvingregulatoryapproach,engagingcloselywithMNOsandtheirpartnerbankstoenablethemobilemoneymarkettoflourish,accoun=ngfornewtechnologiesemerginginthespacewhenconsideringtheregulatoryframework.Atthesame=me,itscloseoversightoftheindustryhelpsitensureconsumerprotec=on,anddevelopabeEerunderstandingofthebusinessandassociatedriskfactors.
• Results:AstestamenttotheBOT’ssuccessinencouragingtheindustrytoflourish,mobilemoneytransac=onvolumesinTanzaniain2014wereUS$23.6billion--almost50%oftheGDP.1
1)WorldBankFindexDatabase,2014.2)DiCastri,Simone.“EnablingMobileMoneyPoliciesinSriLanka:TheRiseofEZCash.”GSMA,July2013.Web.3)Byron,RejaulKarim."SriLanka:AStarinMobileBanking."TheDailyStar,27Jan.2016.Web.
• Context:InEstonia,thecentralbankini=allyrequiredthatmobilemoneyservicesbebank-ledwithnon-propor=onalKYC/AMLrequirementstoopenanaccount,hinderingservicesfromreachinganysubstan=aluserbase.Thecentralbankthenupdateditsregula=onallowingnon-banks,suchastheMNODialog,toacquirelicensestoleadmobilemoneyservicesontheirown.Followingthisregulatorypivot,DialogrelaunchedthepreviouslyfailedeZPayas“eZCash”in2012,auser-friendlymobilebankingplabormaccessibletouserswithouttradi=onalbankaccounts.
• Results:Showingrapidsuccess,eZcashreachedonemillionuserswithinayearoflaunch,with300,000inthefirstmonthaloneandanimpressive20%ac=verate.2Asof2016,eZCashhadexpandedtomorethan2.2millionsubscribersandenablesawidevarietyofconsumerswithoutaccesstotradi=onalbankingtoshopat4,000retailersthroughtheirmobilebankaccounts.3
CollaboraAve,Test-and-LearnApproachtoIssuing
RegulaAon
PivoAngRegulaAonFollowingLowUptake
TOPICS COUNTRYCASEEXAMPLES
21
KEYLEARNING
• Ensuringthatregula=onissuedpromotesdigitalpayments,ratherthaninhibi=ngit,canbechallenging.• InGhana,thecentralbank’sini=alregula=onspertainingtodigitalpaymentsissuedin2008didnotpromoteinnova=oninthemarketbycallingforatleastthreebankstobeinvolvedineverymobilemoneyservice.Incen=vesweremisaligned,andtherewasnotamplemo=va=ontoinvestintheservice.Theregulatorypivotin2015hadtoaccountfortheseshortcomingsandleverageconsulta=onswithmarketplayersandotherregulators.
InhibitorEncounteredwhenEstablishing
RegulaAon
Implementpoliciesthatincentivizeandimproveconvenienceoftheusageofdigitalpayments
• Demonstratecommitmenttothetransi=onawayfromcashthroughpublicsectorpolicyini=a=ves
• Accountforthedemandandinfrastructurefordigitalpaymentspresentintheecosystemtoensureanappropriatepaceofdigi=za=on.
• Context:InNigeria,thecentralbankimplementeda“CashlessNigeria”policy”thatadailycumula=velimitonfreecashwithdrawals.Further,thegovernmentaccompaniedthepolicywithamassivedeploymentofsharedPOSterminalsthroughacommitmentfrombankstobuyanddeployPOSterminals.
• Results:Between2012and2015,thevolumeofelectronicpaymentsincreased14%yearoveryear,andvolumeoftransac=onsatPOSexperiencedanannualgrowthrateof136%.1
1)PaymentVolumes,CentralBankofNigeria.Web.2)"StaVsVcsonPayment,ClearingandSeSlementSystemsintheCPMICountries."BankforInternaVonalSeSlements.Sept.2015.Web.3)EconomicandFinancialDataforSweden,SverigesRiksbank.Web.4)"UruguayMakesGreatStridestowardtheUniversalizaVonofAccesstoFinancialServices."BeSerThanCashAlliance.29Apr.2016.Web.
• Context:InSweden,thecentralbankhasissuedseveralpoliciesrela=ngtoreducingthevolumeofcashintheeconomy.Forinstance,Swedenhasanega=veinterestrateandbanks,retailers,andrestaurantsarepermiEedtorefusecash.Theseini=a=vesaresupportedbythefactthattransac=ngwithcashisfairlycostlyduetodecliningcashinfrastructureandfeesassociatedwithcashtransac=ons.
• Results:Only2%oftransac=onsarethroughcash,2andbetween2014and2015,thenumberofbanknotesandcoinsincircula=oninSwedendecreasedby5%.3
• Context:Uruguaylaunchedafinancialinclusionlawin2014thatgrantsallworkers,socialbenefitrecipients,andsmallbusinessesfreeaccesstodigitalfinancialservices.Further,itmandatesthatallsalary,pension,andsocialbenefitpaymentswillbeelectronicbyMay1,2017.Tohelpitseffortssucceed,thelawintroducedanumberofincen=vesencouragingtheexpansionofPOS.
• Result:ThePOSnetworktripledbetween2011and2015,whiledebitcardtransac=onsgrewtobeseven=meshigherthanbeforetheintroduc=onoftaxincen=ves.4
PenalizingUsageofCashbyBusinessesand
Individuals
ReducingthePresenceofCashthroughPolicy
IniAaAves
DigiAzaAonPoliciesGrowingDigitally
EmpoweredSocieAes
TOPICS COUNTRYCASEEXAMPLES
22
KEYLEARNING
• Countriesmayencounterobstacleswhenrelyingonpoliciestoincreaseusageofdigitalpaymentsifsufficientacceptanceinfrastructurefordigitalpaymentsdoesnotexistandifenforcementoversightislimited.
InhibitortoPoliciesthatIncreaseUsageofDigital
Payments
GeneralLessons
2323
Overarchinglessonsforexecutingontheaccelerators
24
KeyLearning:Cateringtocontext,inves=nginimplementa=on,andcarefullyresearchingac=onsarethreecri=calstepstobringvaluetoexecu=on.Thesefactorsarefrequentlyprecondi=onsforunlockingthevalueofanacceleratoritself.
Extendingservicesacrossdifferentdigitalpaymentslandscapeswithmarketfactorsinmind
M-PESAinKenyaandSouthAfrica:• Vodafone'smobilemoneyplabormM-PESAwasabletoquicklycommandKenya’ssizableunbankedpopula=onasitprovidedlowbarrierstoentryintothefinancialsystem.
• ItfailedinSouthAfricabecauseitbroughtinmanyofthesameusecasesitofferedinKenyawithoutdevelopingnewonesforthecompara=velymorefinancially-includedanddigitally-matureSouthAfricanconsumer.
Inves=ngincustomer-centricexecuAonofdigi=za=onstrategies
AirtelMoneyinIndia:• AirtelMoneyconsidereddifferentmarketsitcouldtargetandimplementedahuman-centereddesign:Partneringwiththemicrofinanceins=tu=onSaharatoexpanditsloanrepaymentusecasetoeconomically-ac=veresource-poorwomen,itlaunchedapeereduca=onprogramtoovercometheirbarrierstousage.
Accoun=ngforendusers’exisAngresourceswhendeliveringnewproductstoacceleratelastmiledigi=za=on
F-RoadinChina:• ThetechcompanyF-Roadacceleratedlastmiledigi=za=onbycateringtoexis=ngdemographicresources:ItsSIM-overlaytechnology(func=oningon95-97%ofallphones1)andpartnershipswithRuralCreditCoopera=veshelpedreachChina’sruralpoor.
EquitelinKenya:• EquityBankandAirtellaunchedthemobilemoneyserviceEquitelofferinginclusiveSIM-overlaytechnologyandaccesstoallEquityBankaccountholders.
Conduc=ngduediligencetoensuresuccessfulstrategyimplementa=on
CentralgovernmentinKorea:• Whenthegovernmentincen=vizedtargetconsumerstousecreditcards,itprovidedincometaxrebatestothosewhoreportedtheirannualexpendituresusingcreditcards.
bKashinBangladesh:• Byallowingagentstochargecustomersanextraamountforover-the-countertransac=ons,themobilemoneyservicebKashcreatedamisalignedincen=vefortheagenttonotpromoteregisteredwalletusage.
1)Shrader,Leesa."China–TheFutureLeaderinBranchlessBankingforthePoor?"CGAP,15Aug.2013.Web.
25
TheBeaerThanCashAllianceisapartnershipofgovernments,companiesandinternaAonalorganizaAonsthatacceleratesthetransiAonfromcashtodigitalpaymentsinordertoreducepovertyanddriveinclusivegrowth.WeworkwithourmemberstocramsoluAonstailoredtoeachcountry’scontextandculture.
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