Competition & Interoperability in Digital Financial Services

Year Started:

Key Partners/Clients:
Bill & Melinda Gates Foundation

Area of Work:
Digital Financial Services

Kenya, Tanzania, Ghana, Jordan, China, India, Philippines, Thailand, Canada

What role can payments interoperability play in promoting the scale and uptake of digital financial services?

As digital financial services have expanded around the world, there are noticeable differences between countries in terms of the rate of expansion and the share of people reached – particularly low-income, poor, rural and women communities. The project aims to develop a deeper understanding of the reasons for these differences between countries, particularly the role that may be played by instant payments interoperability, in promoting scale and uptake of digital financial services.

On behalf of the Bill & Melinda Gates Foundation, BFA Global has launched an effort to learn from past attempts at achieving interoperable instant digital payments, with a focus on both account to account and CICO interoperability.

The study aims to answer the following questions:

  • Why interoperability? Is interoperability necessary for full financial inclusion? We shall be evaluating outcomes from various journeys
  • What policy design features are relevant for achieving interoperability success? Where success is registered, what interventions were deployed? (e.g. pricing caps, common standards, mandated participation)
  • When should policymakers advocate for interoperability? What defines the right time – is it at the beginning, or should the market be able to evolve over time before intervening?

It will focus on Kenya, Tanzania, Ghana, the EU, Canada, Jordan, China, India, the Philippines, and Thailand and also look to other analogous industries such as PAYGo, Card payments and e-commerce to provide lessons.

The study will also look into how interoperability policy, currently being formalized in adjacent spaces (e.g., Internet companies, social media) might affect the future roll-out of payments interoperability, given current trends and technological advancements.

Download the full synthesis report