Page 100 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

In 2014, Banco de México issued rules for the creation and operation of mobile payments clearinghouses. Such
entities need Banco de Mexico’s authorization to operate and are allowed to become direct participants in SPEI.

As a result of the measures taken so far, the processing costs and processing time of "off us" mobile payments
have been reduced.

Nigeria

Twenty-one MNOs (known locally as "Mobile Money Operators" or "MMOs") have been licensed by the Central
Bank of Nigeria (CBN), and they are all required to connect to the Nigeria Central Switch operated by the Nigeria
Inter-Bank Settlement System Plc (NIBSS) to achieve interoperability among MMOs, and between MMOs and
the bankers’ clearing system. Some of the MMO licensees are banks, while others are fintech companies.

Every fintech-owned MMO is required to enter into an agreement with a commercial bank of its choice for the
latter to act as its settlement agent. MMOs’ access to the RTGS system operated by the CBN is made possible
by this settlement arrangement. There is a back-to-back clearing collateral mechanism in place to protect the
entire system against settlement risks. As part of this mechanism banks pledge collateral to the CBN, while
individual MMOs pledge collateral to their settlement bank.
Recently, the CBN began to issue "Payments Solution Service Provider" licenses to fintechs who want to
specialize in the provision of payment services. These specialized PSPs have access to the bankers’ clearing
system through settlement banks, like the MMOs, and they also connect to the Nigeria Central Switch. Through
this means, they are able to reach the bank accounts of their respective subscribers.

In parallel, the CBN, working with payment system industry players, commenced the process of benchmarking
the Nigerian payments system against the PFMIs in 2015. The gaps that exist have been documented and there
are ongoing initiatives to bridge the gaps.

Pakistan
In Pakistan, interoperability of mobile money services/e-wallets has been live since 2014 and is enabled through
"1LINK", a commercial interbank switch. Interoperability allows for funds transfers from e-wallet to e-wallet,
e-wallet to bank account and bank account to e-wallet.
It is important to note that interoperability between mobile money services was not mandated by the central
bank (i.e., the State Bank of Pakistan, "SPB") or other regulators. The decision to interoperate was reached
purely on market situation. In this regard, Pakistan’s mobile money model is bank-led (run jointly by a MNO and
a bank), so PSPs providing mobile payment services were in general already familiar with an interbank switch:
banks were already connected to 1LINK, so they only had to also integrate their mobile money platforms to
the switch.

Recently, the SBP and the telecom regulator Pakistan Telecommunication Authority (PTA) issued joint
regulations on the technical implementation and interoperability of mobile/branchless banking. Under these
regulations, PTA licenses Third Party Service Providers (TPSPs) under class value added services, while the
SBP provides authorization for what concerns payment services and operations. The TPSP model is expected
to offer maximum outreach and connectivity, whereby all banks and all MNOs will be able to entertain each
other‘s customers.

Peru
Peru´s shared mobile payments platform/switch became operational in February 2016. Known as "BiM" (which
stands for "billetera móvil" or "mobile wallet"), it is the result of a partnership formed by the country’s financial
institutions, government, telecommunications companies, and large payers and payees.
The ultimate goal of this effort is to achieve interoperability in mobile payments between banks and other
approved entities, across telecommunications networks, while making use of existing financial infrastructure
(i.e., banks, branches, agents, ATMs, online channels) so that a payment can be accepted by anyone.

90