Page 163 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Executive Summary

Enabling merchant acceptance of digital payments is increasingly seen as a key element of the overall
development of the DFS ecosystem. Broad merchant acceptance will help achieve digital liquidity by enabling
poor consumers to spend a meaningful amount of the money they receive or deposit into digital wallets,
eliminating or reducing the need to incur cash-out costs.

Countries throughout the developing world, however, are finding that there are considerable challenges in
attaining merchant acceptance of digital payments. This Report provides an analysis of some of the challenges,
and provides insight into some of the solutions in merchant payments.

The first section of the report defines and describes the merchant payments value chain. This section also
provides a definitive categorization of merchant segments, and recognizes that the needs of each merchant
segment are quite distinct. Various economic models for the provision of merchant acceptance are defined
and discussed, and policy considerations for regulators are noted.
The second section of the report looks at various business models and structures used by providers of merchant
services, and includes an extensive list of those services that are currently in the market.

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