Page 10 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Consumer pricing and fees
Working Group Ecosystem

Audience for recommendation DFS regulators

Relevant regulatory bodies should maintain accurate and timely information about the direct and indirect prices
consumers must pay to access DFS to ensure that market prices do not create significant barriers to use.

• Regulators are encouraged to use a variety of techniques, including mandating transparency in charging
of fees and "moral suasion" to ensure the consumer prices are reasonable. The use of mandates over
the amount of fees is not recommended, although it may be advisable in some exceptional situations.
It is important when considering the question of consumer fees to make note of the use case involved.
Consumer fees may be warranted, for example, for person-to-person remittances, particularly when
electronic remittances are substantially safer or less expensive than manual cash transfers. In other use
cases, such as bill payment or merchant payments, having any consumer fee at all may represent an
insurmountable barrier to use, with consumers continuing to use cash for such payments rather than
incurring a fee.
• Regulators should take steps to ensure that pricing information is publically available in a meaningful
way, and that consumers are aware of where this information is.
• Policy makers should consider measures to ensure that economic barriers do not make large value
(including government and employer) "bulk" payments impractical, that DFS providers supporting the
receipt of consumer payments are appropriately compensated, and that charges to consumers for
government to person (G2P) payments (including cash-out fees) are not excessive.
• If payments system interchange reimbursement fees are employed, financial regulators should monitor
these fees and revisit any cost and market assumptions every 2-3 years to determine if the fees are still
necessary, and if so, at what level. If put in place, interchange fees should be specific to a use case, and
be used to compensate one DFS provider for unavoidable costs associated with providing services to the
customer of another DFS provider. For example, if a DFS provider is enabling its consumer to make bill
payments, and these bill payments require ongoing customer service and problem resolution procedures
on the part of that provider, it may be reasonable to use interchange as a mechanism to transfer value
from the biller’s DFS provider to the consumer’s DFS provider. The assumption here is that the biller’s
DFS provider would pass these interchange costs on to the biller, who is receiving the benefit of the
electronic transactions. Another example relates to the use of agent services for cash-out by a consumer,
where the consumer is using an agent who is not a representative of their DFS provider. Interchange
compensation within an interoperable scheme from the consumer’s DFS provider to the agent’s DFS
provider is reasonable (assuming the consumer is not charged by the agent directly) and in keeping with
long-standing practices in ATM network interoperability.
• Financial regulators and competition authorities should resist the use of interchange to compensate
for revenue reductions experienced by one “side” of the transaction: doing so can lock-in outdated
compensation structures; subsidize inefficient processes and cost structures; and retard incentives to
innovate. Altogether, this can create a barrier to true low cost payments.

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