Page 75 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

links of the PSIs under their jurisdiction against internationally recognized standards. In overseeing links, the
oversight authorities should agree to adopt a set of harmonized expectations for the linked PSIs. To this extent,
they should adopt the international standards relevant for interoperability discussed in the companion report
on "Payment System Oversight and Interoperability", as well as the principles specifically elaborated within.
The overall goal should be to ensure that risks associated with international interoperability are properly
managed. On the other hand, for solutions based on centralized models, the lead overseer – in cooperation
with other relevant national authorities (see below) – should be responsible for safeguarding the integrity of
the internationally shared infrastructures. In doing so, the lead overseer should monitor and intervene, as
circumstances may require, on specific PSPs through the support of the oversight authorities of the concerned
participating countries.

34. It is advisable to complement the standards and principles discussed in the companion report with a set
of oversight principles specifically designed to address the challenges and risks raised by the international
dimension of payment system interoperability. The proposed principles are intended to complement
those elaborated in the companion report and are aimed to ensure the establishment of safe and efficient
international interoperability agreements.

B. Oversight principles for international payment system interoperability

35. The principles covered in this section should be understood as providing methodological guidelines to
public authorities and private sector stakeholders involved in establishing international interoperability
agreements. The principles are intended to address the challenges and risks associated with international
payment system interoperability, and complement those developed for national interoperability. The principles
draw on the World Bank’s "Guidelines for the Successful Regional Integration of Financial Infrastructures",
cited earlier, and have been written with the idea that initiatives to establish international interoperability
agreements between national PSIs may originate from decisions made by public authorities or may be the
result of private sector undertakings.

36. The principles are intended for a broad audience. The principles are meant to provide policy indications
on international interoperability to payment system oversight authorities and to supervisory and regulatory
institutions that cooperate with oversight authorities. The principles are also addressed to PSPs, as well as to
system operators and scheme administrators of linked or shared PSIs. 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 internationally
recognized standards for interoperable PSIs, it would be the responsibility of system operators and payment
scheme administrators to i) design PSI rules that are consistent with the principles, ii) administer these rules,
and iii) ensure participant compliance with rules. The oversight authorities would assess the PSIs against the
principles and hold system operators and scheme administrators accountable for the implementation of the
principles. The engagement of PSI operators and scheme administrators in the implementation of the principles
would help central banks better achieve their oversight objectives while reducing their involvement in day-
to-day system administration .
22
37. An important qualification of the proposed principles is in order. The principles for national interoperability
developed in the companion report were written assuming that national payment systems are under
central bank oversight. As payment system overseers, central banks play an active role in the establishment,
deployment, and operation of interoperability agreements between national PSIs – including their planning,
implementation, and sustainability – even when the agreements are private sector-led initiatives. In view of
such recognition, those principles were mainly intended to provide policy indications for retail payment system
operators and PSPs to appropriately manage the risks associated with national interoperability agreements. On
the other hand, the principles for international interoperability submitted below have been conceived by giving
specific consideration to the need for both public and private sector stakeholder cooperation across all stages
of international interoperability agreements, in particular, their planning, implementation, and sustainability:
all areas where cross-border oversight responsibilities are typically not well identified or clearly defined. In

22 The regional payment system oversight arrangement adopted in the Southern African Development Community (SADC) provides
an illustrative example in this regard. See Annex 1.

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