Page 42 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

Fairness

19. The central bank may want to ensure that the country’s payment systems are perceived to be fair.
Fairness implies that rules are applied consistently and in a non-discriminatory way across all relevant entities,
based on objective, proportional, and transparent criteria. It requires that the rights and obligations of all
parties to fund transfers in the payment system are allocated in an equitable manner, that participants and
users are not subjected to misleading or abusive business-to-consumer commercial practices, and that disputed
matters can find appropriate resolutions. Also, fairness means that system rules are designed in ways that
reflect the interest of all stakeholders in a balanced manner, and are implemented consistently across the
whole jurisdiction under central bank oversight. Fairness relates to avoiding the use of discriminatory practices
on access and pricing, and to adopting adequate incentives (including sanctions) to encourage good behavior
and penalize wrongdoings.

Transparency

20. Transparency discourages misconduct and abuses of payment systems and allows stakeholders to be
more aware of risks and make better-informed decisions. Transparency ensures that the rights and obligations
of participants and users, as well as the mechanisms to enforce them, are publicly disclosed. Central banks
set regulations requiring payment system operators, participants, and PSPs to disclose rules, key procedures,
and market data. Regulations also require PSPs to disclose charges and maximum execution times, to inform
users on how to authorize and execute transactions and revoke payment orders, and to indicate the liability
in case of unauthorized use of payment instruments and the right to payment refunds.

Market competition and integrity

21. Another oversight responsibility is to make sure that the market for the provision of payment services
is protected against anti-competitive and abusive behaviors. This does not necessarily imply that the central
bank should conduct antitrust policy in their market for payment services. However, the central bank is in a
privileged position to monitor market developments and to intervene, or collaborate, with the competent
authorities, in the event of anti-competitive practices. Also, the central bank may want to be satisfied that
payment system operators, participants, and PSPs do not act in ways that breach public confidence in the
payment system. In this regard, in cooperation with other relevant authorities, it guards against various forms of
criminal abuse of payment systems, such as fraud, breaching of data integrity, cybercrime, money laundering,
and the financing of criminal and terrorist activities.

Consumer protection

22. In several jurisdictions, the central bank is given the responsibility to protect payment system users
from possible malpractices and abuses. To this end, the central bank ensures that PSPs put in place facilities
through which customers can lodge complaints about unsatisfactory or below-standard services, abusive or
unfair commercial or financial practices, and cases of non-compliance with legal and financial obligations. The
central bank also strengthens its own internal consumer protection facilities, and makes sure that effective
dispute resolution mechanisms are established so that users may resort to affordable and time-efficient means
to settle payment-related claims. Moreover, the central bank keeps pressure on the payments industry to
deploy adequate technological and organizational resources to minimize breaches of information security
and privacy.

Interoperability

23. A robust environment of interoperability in the payment system benefits all payment system
stakeholders. As discussed in the second part of this report, through interoperability among payment system
infrastructures, payment system users (including consumers, merchants, governments, and other types of
enterprises) find it easier to make and accept payments. Payment system interoperability can also improve
efficiency by reducing cost and increasing safety by enabling better risk management. The role of the central
bank as a catalyst can be crucial, especially where interoperability of multi-party systems does not happen
on its own, where independent efforts may end up in processes or technologies that are not compatible, or
where market competitors oppose interoperability and support proprietary solutions instead.

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