Page 14 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Government support of the DFS ecosystem
Working Group Ecosystem

Audience for recommendation Governments and other DFS stakeholders

Government support of the DFS ecosystem is necessary for it to flourish. Government agencies are encouraged
to support the ecosystem in multiple ways.

• Stakeholders in the DFS ecosystem are encouraged to work with government units to facilitate the
digitization of government services - in particular, payment flows between the government and consumers
or enterprises (e.g., salaries, social transfers, fees). This includes both government to person (G2P) and
person to government (P2G) transactions.
• The specific matter of G2P payments (sometimes generically referred to as “bulk” payments – including
payments of salary and non-governmental benefits) has been extensively studied over recent years.
The DFS Focus Group concentrated on one particular issue within G2P payments: the question of how
payments are addressed, or routed from the paying agency to the consumer’s DFS account. The DFS
Focus Group published a report, “Bulk Payments and the DFS Ecosystem” that investigated the issue and
isolated some best practices. The use of a national identity number to address a payment is beneficial in
that it does not require the paying agency to collect, store, and maintain beneficiary account information -
doing so is both time and labor intensive and subject to frauds of various types. An interoperable payment
scheme, with a directory at its core that maps national identities to consumer transaction account(s),
is an elegant and efficient solution to these problems, and regulators are encouraged to promote this.
Furthermore, if the national identity scheme has a biometric component, and this biometric is associated
with the transaction account, it is possible to substantially reduce fraud from “ghost accounts”. Policy
makers are urged to look at India as an example. Transaction accounts are associated with a biometric
that is accessible by the interoperable payments scheme. Payments into accounts may be made using
the identity number. Consumers wishing to withdraw funds from their transaction accounts can do so
at any agent whose account is connected to the payments scheme; the consumer identifies themselves
to the agent with a biometrically enabled “micro ATM” at the agent’s location.

• Governments should play an active role in working with DFS providers to educate consumers and promote
the visibility of DFS services.

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