Page 48 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

need to be involved (on a regular or an ad hoc basis) to make sure that interoperability is established and
sustained in a way that is consistent with overall payment system efficiency and safety. 1414 Authorities should
cooperate with each other, both domestically and internationally, as needed, with a view to fostering efficient
and effective communication and consultation in order to support each other in fulfilling their respective
mandates. Cooperation needs to be effective in normal circumstances and should be adequately flexible to
facilitate communication, consultation, or coordination, as appropriate, especially during crisis situations. Issues
of cooperation between different country authorities will be discussed in the companion report on payment
system interoperability and central bank oversight policy in an international context.

C. Oversight principles for interoperability in RPS

40. The principles discussed in this section are intended for a broad audience. They are meant to provide
policy indications on interoperability to payment system oversight authorities and to supervisory and regulatory
institutions that cooperate with the oversight authorities. They are also addressed to operators of interoperable
systems, payments scheme administrators, and retail payment entities as defined below. It must be noted
that while it would be the responsibility of the oversight authorities to adopt the principles and include them
as part of the internationally recognized standards for interoperable payment infrastructures, it would be the
responsibility of system operators and payment scheme administrators to design rules that are consistent with
the principles, administer the rules, and ensure, rules compliance from participants. The oversight authorities
would assess the infrastructures against the principles and hold system operators and scheme administrators
accountable for the implementation of the principles. The active involvement of system operators and scheme
administrators in the implementation of the principles may help central banks to better accomplish the oversight
objectives while reducing their handling of system administration. The companion report on “Payment System
Interoperability and Oversight: The International Dimension” elaborates complementary principles for the
oversight of interoperability between internationally linked or shared payment system infrastructures.
Definitions

41. In this section, the following definitions are used:

• Retail payment entity (RPE): a payment service provider (PSP) offering payment services to users or a
payment infrastructure provider (PIP) supplying infrastructure services to PSPs. PSPs include deposit-
taking institutions, credit institutions, and other authorized service providers like postal offices, money
transfer organizations or e-money institutions. PIPs include providers of automated clearing houses,
automated cheque processing, payment switches, and settlement systems.
• Interoperability agreement: an arrangement among retail payment systems (RPSs) and retail payment
entities (RPEs) to facilitate the delivery of interoperable payment services to users, consisting of
a combination of: i) technical, legal, commercial and contractual agreements among participating
institutions, ii) shared telecommunication links and common standards for the exchange of transaction
data between access and acceptance devices of RPEs, and iii) a central coordinating structure to manage
the clearing and settlement of transactions as well as related business aspects such as rules, procedures,
fees, sanctions, etc.
• Interoperable systems: retail payment systems (RPSs) that are linked by an interoperability agreement.

GENERAL
Principle 1: RPEs that establish an interoperability agreement should identify, monitor, and manage its related
risks.

14 In light of the technical nature of interoperability and, more broadly, in consideration of the increasing role that information and
telecommunication technology providers play in RPSs, cooperation between the central bank as payment system overseer and
the telecommunication regulatory authorities is required and practiced in several jurisdictions worldwide.

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