Page 28 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Payment infrastructure access & governance
Working Group Interoperability

Audience for recommendation Payment infrastructure providers

Payment infrastructures should have objective, risk-based participation requirements that permit fair and open
access to their services. This can enable authorized and/or regulated DFS providers – including authorized/regu-
lated non-banks – to establish interoperability among each other. The payment infrastructure governance should
reflect the relevance of all DFS providers (banks and non-banks) appropriately.

Being able to make effective use of key payment infrastructures is an important element underlying a
competitive payments market. Access to these payment infrastructures can enable interoperability among
DFS providers thereby promoting competition, reducing fixed costs, enabling economies of scale that help
in ensuring the financial viability of the service offered by individual DFS providers, and at the same time
enhancing convenience for users of payment services.

Gaining access to clearing and settlement services is of capital importance for the ultimate success of
new entrants into the market. In the absence of appropriate governance arrangements or safeguards,
participants with a dominant position in a payments infrastructure may establish strategic barriers to prevent
new entrants to the system. These barriers could be explicit or implicit in terms of higher pricing and access
requirements. Certain payments infrastructure pricing and access policies can negatively affect interoperability
and consequently competition.

Authorized/regulated non-banks are having an increasing role in payments in general, and in retail
payments in particular, including for the continued development of digital financial services. Despite this
increasing role, many authorized/regulated non-banks that provide payment services are still not accepted
as direct participants in many payment infrastructures, either of a retail nature or a large-value nature. This
often results in fragmentation of payment services and/or of DFS providers, which leads to their limited or
null interoperability.

22