Page 327 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Peru summary:

Peru’s mobile money network, called BiM, or mobile wallet in Spanish – has been hailed as the first fully
interoperable mobile money platform. The system operates as a central switch, connecting mobile networks
and financial institutions in a way that closely resembles this report’s vision of an ideal bulk payments system.

Users of any of the three major telecommunications operators (Movistar, Claro, and Entel) can sign up with
BiM. Participants are able to accept the BiM terms of service and choose their financial institution remotely
from their phones when they register for the service.

The mobile network operators act as the implementing partners for the service, while the participating
financial institutions act as the payment provider. Paying agencies will be able to route payments into the BiM
system using a phone number or a national ID number. The BiM system will then map that information to
the appropriate financial institution, using the issuer code based on the financial institution that participants
chose during registration. A database held within BiM associates bank account numbers, phone numbers,
and issuer codes.

Once the payment is received, all three MNOs share cash-in-cash-out points, so that the beneficiaries can
exchange the credit for cash. The BiM system is currently working on building up this cash-in-cash-out network
to enable better payments.
Nigeria summary:

Instead of creating an entirely new central switch, Nigeria chose to build off of the existing Nigerian Inter-Bank
Settlement System (NIBSS). This system uses the BVN as the central identifier for payments routed through
the system. All bank accounts in Nigeria must be associated with a BVN. In fact, banks deactivated millions of
accounts in 2015 in a registration drive to ensure that all bank accounts are associated with a BVN.

To send a bulk payment, a paying agency would simply have to know the BVN of the beneficiaries. The payment
would then be routed to the NIBSS in a standardized format. The NIBSS maps that BVN to the appropriate
account number by checking it against the BVN database, which is held within the NIBSS. NIBSS would then
send the payment to the financial institution associated with that BVN.

Interestingly, while mobile wallets are connected into the NIBSS system, only commercial banks can perform the
receiving function. There is no current way to send a bulk payment to a mobile wallet, though that is planned.

India summary:
The best known of the three systems is the IMPS in India. The massive biometric identification program known
as Aadhaar, run by the Unique Identification Authority of India, acts as the implementing partner for bulk
payments sent through the IMPS system. There are now at least 29 financial institutions currently acting as
payment providers and enabling the payments.

With the release of the Unified Payments Interface, paying agencies now have a variety of choices when
routing payments, including the bank account number, the phone number, the Aadhaar (national ID) number,
and a “virtual payments address.” Virtual payment addresses give beneficiaries an identifier designed to mask
people’s payment information for greater security. Hypothetically, the government could use any of these
functions, or possibly biometric functionality (captured in Aadhaar) to route payments to beneficiaries.

Any one of these identifiers could be sent to the IMPS to affect a bulk payment. The IMPS then takes advantage
of the NPCI’s “central mapper” to identify the beneficiary’s bank account number. Then, the IMPS could route
that payment to the appropriate financial institution and account. Direct benefit transfers are one of the
primary goals of the Aadhaar system, and the IMPS is already being used to disburse bulk payments. 28

28 Unified payments interface, API and technology specifications, national payments corporation of India, February, 2016.

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