Fighting Poverty, Profitably: Transforming the Economics of Payments to Build Sustainable, Inclusive Financial Systems

The Gates Foundation's Financial Services for the Poor program (FSP) believes that effective financial services are paramount in the fight against poverty. Nonetheless, today more than 2 billion people live outside the formal financial sector. Increasing their access to high quality, affordable financial services will accelerate the well-being of households, communities, and economies in the developing world. One of the most promising ways to deliver these financial services to the poor -- profitably and at scale -- is by using digital payment platforms.These are the conclusions we have reached as the result of extensive research in pursuit of one of the Foundation's primary missions: to give the world's poorest people the chance to lift themselves out of hunger and extreme poverty.FSP conducted this research because we believe that there is a gap in the fact base and understanding of how payment systems can extend digital services to low income consumers in developing markets. This is a complex topic, with fragmented information and a high degree of country-by-country variability. A complete view across the entire payment system has been missing, limiting how system providers, policy makers, and regulators (groups we refer to collectively as financial inclusion stakeholders) evaluate decisions and take actions. With a holistic view of the payment system, we believe that interventions can have higher impact, and stakeholders can better understand and address the ripple effects that changes to one part of the system can have. In this report, we focus on the economics of payment systems to understand how they can be transformed to serve poor people in a way that is profitable and sustainable in aggregate

Adoption of Mobile Financial Services among Rural Under-Banked

During the last decade, there has been tremendous growth in mobile penetration in many countries across the globe and most interestingly in a number of developing countries. On the other hand around, half of the world’s population is deprived of banking and financial services. This paper is based on a study that was aimed to identify drivers and inhibitors for adoption of MFS among the rural under-banked population and to compare the same with that of the existing studies. During the study, an extensive review of literature was conducted to identify the factors that were studied and found significantly affecting the adoption of mobile financial services. This was followed by an exploratory qualitative research conducted among the rural under-banked population of three distinct states in India. The findings of the study indicate that the demand for banking and financial services and the amount of hardships faced in availing these services through the existing channels of delivery can act as strong drivers for MFS adoption among the rural under-banked. On the other hand, factors like lack of trust on technology and lack of technology readiness were found to act as barriers to the adoption of MFS.

The Fact-Finding Security Examination in NFC-enabled Mobile Payment System

Contactless payments devised for NFC technology are gaining popularity. Howbeit, with NFC technology permeating concerns about arising security threats and risks to lessen mobile payments is vital. The security analysis of NFC-enabled mobile payment system is precariously imperative due to its widespread ratification. In mobile payments security is a prevalent concern by virtue of the financial value at stave. This paper assays the security of NFC based mobile payment system. It discusses the security requirements, threats and attacks that could occur in mobile payment system and the countermeasures to be taken to secure pursuance suitability

Establishing Mobile Money Systems

Establishment of a mobile money platform requires initial investment which grows slowly at first, then requires critical mass for it to take off. The case study of M-Pesa in Kenya is described in Section 2, largely touted as the most successful mobile money network to have been established in Africa. Beneficiaries of mobile money programmes in the emergency response in Haiti (Section 3) needed product orientation and training. Different issues are reported on through country examples in this report. The importance of trust and the workings of dispute settlement are described in the context of Somaliland in Section 4. The levels of taxes applied to transactions affects mobile money usage. Research from Uganda (Section 5) and Jordan (Section 6) provide useful information to that effect. Section 7 discusses interoperability between different mobile money providers within the Rwandan context. Section 8 draws together further information that was identified in the search as of interest on regulation and Section 9 provides further examples of experience with agent networks.FCDO (Foreign, Commonwealth and Development Office

Understanding the corpus of mobile payment services research: an analysis of the literature using co-citation analysis and social network analysis

Mobile Payment Services have advanced in the last two decades, gaining the attention of experts and researchers from around the world. A number of reviews and literature analysis studies have been carried out, aimed at analysing the numerous dimensions of mobile payment services; however, no researcher has attempted a co-citation analysis to scrutinise and comprehend the core knowledge structures that are integral parts of mobile payment services studies. Therefore, in order to fill this research gap, this research article aims to interpret the corpus of mobile payment services research, which was published during the period of 1997 to June 2017. Bibliometric and Social Network Analysis (SNA) methods were employed to formulate the core intellectual structure of research targeting mobile payment services. The Web of Knowledge (WoK) database was the key source from where 406 articles and 3,424 citations were obtained. These documents were analysed using co-citation analysis. UCINET was used to enlist the keynote research papers in the realm of mobile payment services as per factor analysis, citation and co-citation analysis, multidimensional scaling and centrality measurement. Seven core clusters of mobile payment services research emerged as a critical finding of this study; these clusters include (1) Adoption and usage; (2) Trust, risk and security; (3) Application; (4) Scheme; (5) Protocol; (6) Architecture; (7) Mobile payment corporation. The findings of this research study provide crucial guidelines for practitioners and researchers involved in this field.Mobile Payment Services have advanced in the last two decades, gaining the attention of experts and researchers from around the world. A number of reviews and literature analysis studies have been carried out, aimed at analysing the numerous dimensions of mobile payment services; however, no researcher has attempted a co-citation analysis to scrutinise and comprehend the core knowledge structures that are integral parts of mobile payment services studies. Therefore, in order to fill this research gap, this research article aims to interpret the corpus of mobile payment services research, which was published during the period of 1997 to June 2017. Bibliometric and Social Network Analysis (SNA) methods were employed to formulate the core intellectual structure of research targeting mobile payment services. The Web of Knowledge (WoK) database was the key source from where 406 articles and 3,424 citations were obtained. These documents were analysed using co-citation analysis. UCINET was used to enlist the keynote research papers in the realm of mobile payment services as per factor analysis, citation and co-citation analysis, multidimensional scaling and centrality measurement. Seven core clusters of mobile payment services research emerged as a critical finding of this study; these clusters include (1) Adoption and usage; (2) Trust, risk and security; (3) Application; (4) Scheme; (5) Protocol; (6) Architecture; (7) Mobile payment corporation. The findings of this research study provide crucial guidelines for practitioners and researchers involved in this field

Better Than Cash? Global Proliferation of Debit and Prepaid Cards and Consumer Protection Policy

A global deluge of debit cards and prepaid cards – payment cards that do not require consumers to qualify for credit – is rapidly making electronic payment systems accessible to much of the world’s population that previously paid in cash for goods and services. The global proliferation of payment cards is fraught with both risk and promise for consumers. The billions of people of low to moderate incomes who are being hurled from a cash economy into the era of electronic payments in emerging economies by the proliferation of debit and prepaid cards are particularly vulnerable to abuses by banks and merchants. Unregulated private lawmaking by payment card associations and card issuers will not ensure that consumers are treated fairly, due to their countervailing incentives to attract merchants into their payment networks. Technological solutions promote efficiency and limit abuse, but cannot ensure fair resolution of consumer-merchant disputes. Payment card associations such as Visa and MasterCard operate chargeback systems for resolving disputes, but chargeback systems cannot function in cash economies without merchants’ consent, because cash transactions are usually anonymous, evidenced at most by a receipt, and do not involve an intermediary. However, while the lack of anonymity inherent in the use of payment cards entails risk for consumer privacy, it also makes possible greater transparency in payment systems. As billions of vulnerable consumers become connected to electronic payment systems, chargeback systems become a possible means of protecting them from merchant misconduct. Moreover, this lack of anonymity makes possible new ways of protecting consumers, such as disclosure to consumers of outcomes of the Visa and MasterCard chargeback systems through merchant ratings such as those posted on eBay. There is a risk that nations with emerging economies will uncritically emulate regimes of consumer protection adopted in the United States and Europe. These regimes in many respects lack a consistent conceptual foundation and fail to address problems, such as bank fees, access to banking services and payment system insolvency, that are poorly addressed in developed countries if they are addressed at all. For example, debit and prepaid card transactions are both a convenient means of obtaining cash and a substitute for cash, but this does not justify denying chargeback rights to consumers who use debit and prepaid cards, as if they had paid in cash. Prior scholarship on payment cards has suffered from the assumption that American use of credit cards is normative. This article demonstrates that it is a global anomaly; most consumers worldwide use payment cards for convenience rather than a source of long-term credit, and that is why debit cards have become popular so quickly. Moreover, fees and charges imposed on consumers for payment card services are one of the most prolific sources of consumer complaints. Fee regulation should be regarded as a legitimate part of payments law in scholarship on the subject, and should not be ignored in establishing a regulatory system to govern debit and prepaid cards

Trade in financial services : mobile banking in Southern Africa

The report will be discussed at a policy discussion workshop that will being together a select group of policy champions from each of the focus countries to discuss appropriate incentives that encourage innovative bank and non-bank led domestic and international m-banking solutions. In this Introduction, the authors summarize the layout of the report, and then touch upon two over-arching issues that need to be taken into account in reading the report. To set the context for m-banking services in the focus countries, chapter two reviews the demand for m-banking services in Southern Africa, particularly in relation to migrant remittances and cross-border payments of trade-related transactions. This analysis is complemented by some international comparisons set out in annex C. On the supply side, chapter three briefly describes the financial and telecommunications landscape in which the development of m-banking is set. The heart of this study is the country diagnostics set out in annex A, which examine, for each country the regulatory issues that are listed in annex B. For ease of reference, the results of the country diagnostics are summarized in chapter four. The country diagnostics include a number of recommendations to overcome the constraints on the development of accessible m-banking in each country and the region, which are developed further in the draft presentation for the workshop in annex D. The main threads of the key recommendations are brought together and summarized in chapter five.Banks&Banking Reform,Emerging Markets,Access to Finance,E-Business,Remittances

Building blocks of e-commerce

This article examines the architecture of e-commerce as a set of layers, each supporting the one above it. The layers have clean interfaces, that is, they can be designed independently. We present an architecture with six layers. The lowest layer consists of a physical communication network such as local area network or public switched telephone networks. The next higher layer is the logical layer which describes the protocol used to interconnect communication systems to create internet, intranet and extranet. The services provided over the internet infrastructure, namely, e-mail, world wide web etc., are described in what is called network services layer. It is essential to ensure security of messages, documents etc., which are transmitted using network services. The messaging layer is thus concerned with encryption methods, both private and public key encryption and their applications. We call the layer above this the middleman service, which is concerned with value-added services offered by intermediaries to enable payment for services received, certify digital signatures, safely transmit documents and provide information on behalf of companies. The topmost layer is the application layer which users see. The major applications are customer-to-business (C2B) e-commerce, business-to-business (B2B) e-commerce, customer-to-consumer (C2C) e-commerce etc. We briefly explain these modes