Page 18 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

3 Interoperability recommendations

Title of recommendation Interoperability mission

Working Group Interoperability

Audience for recommendation Authorities, DFS Providers

Interoperability should enable users to make electronic payment transactions with any other user in a conve-
nient, affordable, fast, seamless and secure way, even with a single transaction account.

At the core of this vision lies the “transaction account”. A transaction account can be a deposit (current
account, checking account, card account, savings account) or an e-money account (prepaid account, online
money, mobile money), issued by a bank or a non-bank. These types of accounts share the characteristics of
allowing user to make and receive payment transactions. The need to hold different accounts (including for
closed-loop systems like transit cards) especially affects poor users, since for them it is more difficult to afford
idle balances in those accounts. Therefore, if a user wishes to hold only one transaction account, he/she should
be able to initiate and receive his/her payments via this single transaction account.
Payment transactions are made in order to settle an obligation or send money to someone else, without
underlying economic transaction. Payments are often considered a friction to that end objective. Users must be
able to access transaction accounts and initiate payment transactions in an overarching or ubiquitous manner,
independent of their location, this implies 24/7 availability. In that sense payments should be convenient, with
minimum effort for end users as possible.
Payments between customers of two different DFS providers should not be perceived users as being
different from payments between two customers of the same service provider. This seamless experience
should include commercial conditions that should not be different between transactions within the same
provider (on-net or on-us) and comparable payment transactions across different providers (off-net or off-us).
Payment transactions, including those between customers of different payment providers, must be affordable,
as a way to foster usage, value deposits and drive financial inclusion.

Payment transaction should be fast, meaning that the final receiver of the transaction should have the
certainty of availability of funds instantly. Certainty of availability of funds on an instant basis is fundamental
to meet the aim of substituting cash transactions.

Another required feature is safety. Payment services are only viable if they are perceived as safe by final
users. As a store of value, transaction accounts must be perceived at least as safe as holding, carrying and
handling cash. If users see a transaction account and the associated payment instruments as being susceptible
to fraudulent access and use they will not adopt it.
Making payments with any other user refers to the possibility to make payment transactions between users
in-person or remotely, i.e. if they are geographically separated within or across borders. Often innovative
solutions that offer global reach do so within closed or limited interoperable schemes only or still rely on
complex correspondent banking relationships.

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