The electronic payments business is characterized by batch processing, extended clearing cycles, rigid procedures, complex contractual arrangements, opaque fee structures, and rising fraud rates. Recognising these inefficiencies, central banks have continued to drive reforms, particularly in non-cash, low-value payment systems. And while these reforms are generally aimed at improving the speed, security and cost of non-cash payments, some reforms have been more effective than others.
In this whitepaper, we look at how some reforms are designed to embrace and encourage innovation, while others preserve the anachronistic banking practices that have blocked real innovation in this sector.
Although the need for financial inclusion is well understood, the solution has proved elusive. Access to education, communications services, and financial and banking services can pose special challenges in the Third World. And the barriers to inclusivity in developing countries are often formidable, such as distance from a financial service provider, lack of necessary documentation papers, lack of trust in financial service providers, low financial literacy rates, the high cost of making low-value transactions, and religion, to name just a few. This whitepaper investigates the challenges of financial inclusion, the costs and issues associated with it, and explores why emerging and developing countries are now primed for digital payment innovation.
The global payments paradigm is changing. Worldwide, the dominant international card schemes battle against ever-increasing fraud, exposing their underwhelming response to the emergence of card-notpresent transactions. In the developing world, banks are looking to mobile technologies to capture payments by the unbanked and remove reliance on cash. And in the first world, disruptors are carving out pieces of the market to capitalise on new technologies and widening gaps in niche market payment scenarios, particularly for e-commerce and m-commerce.
In this white paper, we discuss how a new payments scheme can assist central banks to regain control of their domestic payments, draw the unbanked into the financial system, promote a “cash-lite” economy, combat financial fraud, and reduce the cost of payments for consumers, merchants and banks without eroding margins in the payments industry.
As the IoT and connected devices become more prevalent, our smartphones are becoming increasingly connected to the world around us. Smart portable, mobile and wearable devices use a number of different wireless communications technologies, including Wi-Fi, NFC and Bluetooth. To be successful, a next generation payment technology needs to be widely adopted, scalable, interoperable, secure, wireless, low-power and low-cost. While Wi-Fi and NFC meet some of these requirements, only Bluetooth ticks all the boxes.