The future of exchanging value: uncovering new ways of spending

The explosion of new technology and virtual currencies is changing where, when and how people and business exchange value. The report also demonstrates that while the future of payments is uncertain, the availability of internet connectivity and the mass adoption of mobile devices will impact the payments industry and incumbent payments providers. The phenomenal uptake and usage of mobile devices – and the easy accessibility of mobile payments technology – means today’s consumers are more mobile in their transactions and have a wealth of options available regarding where, when and how they make purchasing decisions. The future of exchanging value – Uncovering new ways of spending explores how the emergence of a new generation of payment solutions and business models is changing the payments landscape. Organisations that look beyond traditional payments platforms and simplify the purchasing process by having the right payments solutions available at the right place and at the right time can gain a competitive advantage. The report also demonstrates that while the future of payments is uncertain, the availability of internet connectivity and the mass adoption of mobile devices will impact the payments industry and incumbent payments providers

Taking forward public procurement reforms in Ghana

The construction industry in Ghana, like many others worldwide, has had its fair share of damning independent reviews. Huge and unsustainable foreign debt, excessive budget deficits, huge contractual payment arrears, poor construction performance, corruption and pressure from international financial institutions, forced the government to commit to a reform of public procurement, which culminated in the passing of the Public Procurement Act, 2003 (Act 663). The paper outlines the events leading to, and features of, the public procurement reform in Ghana and analyses its potential impact and the unique challenges it presents. Comparisons are also drawn from relevant scenarios in other countries. The paper concludes that while the Procurement Act sets out the legal, institutional and regulatory framework to secure fiscal transparency and public accountability, the sole reliance on traditional contracting and price-based selection limits the scope for the value for money achievable. Expanding the reforms to cover procurement and project delivery methods and strategies, with a focus on ‘best value’, will increase the potential and likelihood of achieving value for money in public construction in Ghana

Leveraging Technology to Improve Public Service Delivery: A Case of Implementation of National Electronic Funds Transfer (NEFT) System in Employees Provident Fund Organization (EPFO), India

During the recent past, the governments across the countries have started deploying information and communication technologies to offer public services in a more efficient and effective manner. The implementation of e-governance projects in developing countries requires an altogether different approach as the challenge is to offer public services to all the citizens including those who are less technology savvy. It can be safely inferred that a technology solution implemented in some developed countries may not be simply replicated in a developing country, which has its own set of challenges. In this paper the implementation of National Electronic Fund Transfer (NEFT) in Employees’ Provident Fund Organization (EPFO), a government body in India has been taken as an illustration to exemplify the effective use of technology to improve the service delivery in public sphere. Keywords: e-government, e-governance, e-payment, EPFO, ICT, India, NEFT, Provident Fund, Public Services, Social Security

Payment systems efficiency, policy approaches, and the role of the central bank

Central bank spending on the operation of inter-bank funds transfer systems may range from below one million to nearly a billion US dollars annually. This paper examines how such costs are incurred and recovered to pursue payment systems efficiency in different countries and under alternative policy approaches. The key findings are as follows. First, strong scale economy effects were found, with unit costs comparatively lower in retail than large-value payment services, while subsidisation was also evident in a survey of thirty-one payment systems. Second, the minimalist approach was more efficiency enhancing than the competitive and public service policy alternatives, due to higher cost-reducing effects, stronger private sector involvement, and the avoidance of the central bank’s conflicting role as regulator and service provider in the payments system. And third, regulatory and financial innovations, in addition to technological means, are found to be equally important policy tools that the central bank may adopt to improve the technical and economic efficiency of payment systems.payment systems, efficiency, cost, revenues, innovations

Credit Cards and Debit Cards in the United States and Japan

This article examines differences in credit-card and debit-card usage between the United States and Japan. Although I do not doubt that social and psychological factors have some significance, I contend that four institutional factors also have useful explanatory power: the freedom of banks to enter the industry; the size of retailers; the level of telecommunications costs; and the size of the national economy. Generally, credit cards in Japan are used for a smaller share of transactions, with a higher average amount, and with less borrowing per transaction. The costs to merchants that take the cards and the rates of fraud also are noticeably higher in Japan than in the United States. The article argues that the difference in usage is attributable primarily to regulations that largely excluded banks and their affiliates from credit- card lending until 1992 and also, to some lesser degree, to the relatively small size of Japanese retailers. The article concludes that the differences in discount rates and fraud rates are more likely to be transient, but attributable to a combination of factors, including the comparatively small payment-card market and high telecommunications costs, both of which have hampered the sophistication of responses to fraudulent transactions. Debit cards are used quite rarely in Japan?the first general-use debit card was not introduced until the spring of 2000. Although that card is cheaper for the merchants that take it than credit cards, and also is much more resistant to fraudulent transactions, the article suggests that the debit card will not find as large a market in Japan as it has in the United States. The reason is that the shift of the credit card from its use as a borrowing device in the United States to its use as a near-cash payment device in Japan leaves a much smaller niche for the debit card in Japan.

Post-Demonetization E-Payment Trends

Developing a solid foundation for electronic payment systems is an integral part of ICT-driven development for any country. Compared to cash, e-payment transactions offer the advantages of portability, security, and convenience. For interpersonal transactions, e-payments enable instantaneous exchanges of funds without requiring large sums of physical currency to be carried around and exchanged. E-payments also allow money to be sent rapidly to any recipient regardless of location, eliminating the time cost of making transactions over distance. Integrated e-payment systems are vital to the functioning of any ICT platform whose services require payment, especially those based on mobile technology. Finally, e-payments are more visible than cash transactions, reducing the corrupting influence of black money, widening the tax base, improving data on spending and consumption, and aiding in the formalization of large sectors of the economy. India has long been a cash-based economy, but in recent years, the country has been in the process of transitioning towards a cashless society, In November 2016, this transition was accelerated when 87% of the country’s paper currency by value was demonetized. The macroeconomic merits of demonetization remain up for debate, but the policy shock did provide India a golden opportunity to replace legacy systems with ones that could interface with new IT platforms and the country’s national ID database, Aadhaar. Although digital payment remains relatively infrequent for now, total digital payments are expected to reach USD 500 billion by 2020, ten times the level in 2016. Government has encouraged this transition by linking public transactions such as Direct Benefit Transfer (DBT) to e-payment services through Aadhaar. Numerous modes of digital payment are now available to Indian consumers, but some have been more successful than others. Demonetization additionally played a heavy role in influencing which payment systems have been adopted for which purposes. For example, while mobile wallets were popular in the months and years preceding demonetization, Unified Payments Interface (UPI) based systems have since become more prevalent, largely thanks to the convenience of being able to skip the intermediate step of adding money to a specific account in favor of sending money directly to recipients via one’s own bank account. UPI transactions increased threefold in the year following demonetization, representing the largest segment of the country’s digital payment growth. As smartphones continue growing in popularity and data usage continues to increase, India’s digital payment market is expected to reach over 1 trillion USD by 2023. However, specific interventions and investments are required for the information economy to penetrate rural areas. Initiatives such as the ICICI Digital Villages Program provide training and support for rural Indians to enter the digital financial ecosystem, offering assistance in opening paperless accounts, introducing SMS services for fund transfers and balance inquiries, and developing native cashless payment systems for direct deposit. Infrastructure investments are also required to make digital payments feasible for those in remote and poorly connected areas. Such efforts are necessary if ICT-driven development is to sustain India’s economic growth in a fashion inclusive for all of India’s citizens