1、Evolution of payments systems:NATIONAL VERSUS INTERNATIONALomfif.orgEvolution of payments systems:National versus international2Published by OMFIF Ltd.Official Monetary and Financial Institutions Forum 181 Queen Victoria St,London EC4V 4EG,United Kingdom T:+44(0)20 3008 5262 omfif.org omfif.orgABOUT

2、 OMFIFWith a presence in London,Washington and New York,OMFIF is an independent forum for central banking,economic policy and public investment a neutral platform for best practice in worldwide public-private sector exchanges.For more information visit omfif.org or email enquiriesomfif.orgAUTHORPhil

3、ip Moore,Contributing editorEDITORIAL AND PRODUCTIONClive Horwood,Managing Editor and Deputy CEOSimon Hadley,Director,ProductionFergus McKeown,SubeditorABOUT MASTERCARDMastercard is a global technology company in the payments industry.Our mission is to connect and power an inclusive,digital economy

4、that benefits everyone,everywhere by making transactions safe,simple,smart and accessible.Using secure data and networks,partnerships and passion,our innovations and solutions help individuals,financial institutions,governments and businesses realize their greatest potential.Our decency quotient,or

5、DQ,drives our culture and everything we do inside and outside of our company.With connections across more than 210 countries and territories,we are building a sustainable world that unlocks priceless possibilities for all.ACKNOWLEDGMENTSOMFIF thanks officials from the co-operating countries and citi

6、es for this publication,which will be joining us in launch partnerships around the world.We are grateful to many other associates and colleagues for their assistance and guidance.CONTENTSEvolution of payments systems:NATIONAL VERSUS INTERNATIONAL3 Executive summary Providing secure and convenient pa

7、yments in a globalised world4 IntroductionEvolution of payments systems:National versus international5 ResilienceOvercoming technical and strategic obstacles7FunctionalityHow to meet needs of customers9Local and cross-border interoperabilityWorld can reap benefits from payments systems that talk to

8、each other3547911InclusionOnly the broadest possible access will deliver economic benefits13Competition and innovationBuilding best in class safety and innovation features14Challenges of investment:the European Payments InitiativeEuropes struggles show difficulties of creating new systems15Conclusio

9、n Balancing risks and benefits OMFIF Ltd 2022.The entire contents of this publication are protected by copyright.All rights reserved.No part of this publication may be reproduced,stored in a retrieval system,or transmitted in any form or by any means,without the prior permission of the publisher.The

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13、236141311omfif.orgEvolution of payments systems:National versus international3EXECUTIVE SUMMARYTHE range of options in the payments system landscape is broadening.After decades of more or less uninterrupted movement towards more global systems,administered and delivered internationally,several polit

14、ical trends have emerged to push the needle the other way.Perhaps the most important of these is Moscows involvement in Ukraine and the subsequent suspension of services by international payments systems in Russia.Witnessing this,other central banks are likely to be reconsidering the value of a nati

15、onal payments system as a means of securing strategic independence in their payments.OMFIF,in partnership with Mastercard,examines the value proposition of domestic and international schemes,conducting comprehensive interviews with a range of central banks with differing levels of experience with na

16、tional payments systems.The central banks interviewed fell into three categories:those who are considering introducing or expanding national payments systems;those who have a national payments system in operation already;and those where a national payments system used to be in operation but has been

17、 discontinued.This,alongside extensive desktop research into the operation of both national and international payments systems informs the conclusions of the report.Accordingly,while it is important to acknowledge the role national payments systems like Russias Mir have played in allowing the countr

18、y to process domestic payments during the suspension of service by international payments systems,the domestic system has limitations and critical omissions in its scope.While its benefits in operating as the host country is subject to sanctions,this is a relatively rare situation.The lack of robust

19、 fraud management,cross-border acceptance and value-added services reflect a diminished offering in a modern world.Developing such a payments system is a costly and challenging undertaking.Consumers,businesses and governments have high expectations of the performance and resilience of the payments s

20、ystems they use.As technological complexity grows,the potential for vulnerabilities that hackers can exploit also increases,as does the sophistication of the tools required to thwart them.Developing and maintaining these tools requires high levels of both initial and continuous investment and deep t

21、echnical expertise.International payments systems,such as American Express,Diners Club,JCB,Mastercard and Visa,have a natural advantage in this field because their wider networks give them extensive resources and more experience to draw from.At a national level,many countries will struggle to match

22、this capacity,potentially leaving vulnerabilities that can affect not just their own economies but others as well.Similarly,the complexity and expense of ensuring resilience from outages,through precautions like multiple data centres providing redundant capacity,could tax the resources of many natio

23、ns.Cross-border connectivity is another key area of changing demands and expectations.Consumers and businesses expect to be able to seamlessly transact across borders,which requires their payments system to be accepted around the world.Consumers have come to expect this with international payments s

24、ystems.Some national payments systems have managed to achieve a degree of international acceptance,mostly through bilaterally arranged agreements with trading partners,or co-badging adding cross-border acceptance via another(usually international)payments brand.While this can work in a limited way,t

25、he complexity and number of bilateral arrangements required to match the cross-border acceptance of major brands is enormous.While the characteristics and capacity of each economy will be different,the difficulty of developing a national payments system and the cost of funding and maintaining it wil

26、l prove extremely challenging for most.Providing secure and convenient payments in a globalised worldConsumers,businesses and governments have high expectations of the performance and resilience of the payments systems they useomfif.org41.INTRODUCTION Evolution of payments systems:National versus in

27、ternationalFEW outward symbols of globalisation have been as powerful as the expansion of regional and international payment flows in recent decades.Among the most striking indicators of this has been the development of the Society for Worldwide Interbank Financial Telecommunication.Driven by an exp

28、losion in commerce particularly e-commerce,cross-border transactions and travel,Swift has risen in prominence and processes some 42m transactions a day across its 11,000 members.This increase in cross-border trade has been fuelled by and is inextricably linked to the availability of efficient paymen

29、ts systems providing the ability to easily transact across borders.This has resulted in widespread boosts to gross domestic product and cross-border trade.Covid-19 intensified a move from cash to digital payments,whether in person or remote.Research from UK automated teller machine provider LINK ind

30、icates that 50%of survey respondents say they are using less cash than before the pandemic.The increasing reliance on digital payments systems means enhanced governmental scrutiny to ensure that these systems meet the needs of everybody,including of their new users,non-tech savvy people and isolated

31、 populations.This digital commerce explosion has been fuelled in no small part by expansion in the global card market.Although the pace of this expansion may be slowed by global economic weakness,demand for the efficiencies of card payments will ensure continued growth over the coming years.Accordin

32、g to estimates published by Research and Markets in August 2022,the global card market is expected to expand to$399bn by 2026 a compound annual growth rate of 9.7%.Consumers increasingly expect to be able to use their preferred payment methods anywhere in the world and to purchase from any merchant.

33、This places a high level of expectation on payment providers to ensure universal acceptance.But,despite the powerful forces promoting global commerce and global payments systems,this trend is not necessarily inexorable.Driven by consumer and merchant preferences and innovation,competition in payment

34、s is fierce and continuously increasing.And global payments systems are not the only players claiming their slice of the pie.The establishment of alternative options means more competition in the payments space that,if solutions are interoperable,should mean improved outcomes for both consumers and

35、merchants.More recently,deglobalisation has been supercharged by an intensification of geopolitical tensions driven by Russias actions in Ukraine.In the context of global payments,a notable consequence of Russias February 2022 action in Ukraine has been the suspension of services of a number of inte

36、rnational payments networks in Russia.This increased Russias dependence on its national payments system(NSPK)and the local scheme(Mir)set up following the imposition of sanctions in 2014 and 2015 respectively,which were effectively left as the dominant players in the domestic market.Russias ability

37、to continue to process domestic digital payments despite the suspension of activities gave many of its citizens a valuable economic lifeline.Central banks around the world which might see themselves within the scope of similar sanctions and service withdrawals might consider emulating Russia.However

38、,this has recently been undermined by a new Office of Foreign Assets Control announcement,which makes it clear that the US will impose sanctions on anyone who executes transactions with sanctioned parties via Mir,closing off any loopholes that would allow sanctioned parties to use it to circumvent r

39、estrictions.Central banks might also wish to establish autonomy in their payments systems simply to have it entirely under their control,within their jurisdiction,provided nationally,since this would allow them to set their own rules.But establishing a national payments system is no simple task.The

40、risks and costs are substantial.Even if these can be managed,it is far from guaranteed that national payments systems will deliver the values envisioned by central banks,considering their,by default,national or,at most,bilateral value proposition in a universe that is,physically or digitally,going g

41、lobal.These risks and benefits are explored below.First,we address the topic of resilience,both geopolitical and technical.While it might be attractive to preserve the use of digital payments under sanctions,the costs and complexities of preventing fraud,financial crime and malfunctions are consider

42、able.Then we address the challenges of ensuring modern,competitive and functional payments that will be widely adopted,universally accepted and,perhaps most importantly,will be safe and secure for both their owners and their users.In each case,while some national payments systems have achieved good

43、result,it is extremely challenging to develop and maintain high-quality payments systems.Evolution of payments systems:National versus internationalomfif.orgEvolution of payments systems:National versus international5Overcoming technical and strategic obstaclesRESILIENCE in a payments system refers

44、to its ability to operate continuously,without disruption from causes like natural disasters,political instability or technical failures.Given the growth in digital payments at the expense of cash,resilience and reliability have become ever more important to the health of the global economy.Central

45、banks can take different approaches to ensuring their payments network will be resilient.Some might opt for a hands-on approach,launching their own payments system under their control and with their own rules.Others prefer to allow various international payments networks,such as American Express,Din

46、ers Club,JCB,Mastercard and Visa,to operate independently,albeit under their strict supervision and rules,to ensure back-up options exist in the case of the failure of one system or another.STRATEGIC RESILIENCEChinas efforts to strengthen China UnionPay are an example that must be seen as an attempt

47、 to gain greater autonomy from the West in the case of future confrontation.This became particularly obvious after the West imposed sanctions on Russia in response to the annexation of parts of Ukraine.If Moscow can be targeted,policy-makers in Beijing reasoned that China could be next.Indeed,this u

48、se of financial infrastructure as a tool of foreign policy has set a precedent that is likely to encourage other countries to consider reducing their payments systems dependence on non-domestic third parties.This might come through national card schemes or through regional financial messaging servic

49、es designed to reduce reliance on Swift.While it is important to acknowledge the benefits of reducing reliance on third parties,it is also essential to acknowledge the limitations of this strategy.Adoption is a huge challenge.While Mir has been an important lifeline for Russian consumers,allowing th

50、em to access funds and make payments domestically,only around half of Russians owned a Mir card as of September 2021,according to Mirs statistics.Replacing their international cards meant a huge and sudden strain on the card production supply chain during a time of reduced imports and a global chip

51、shortage.While those seeking to emulate Russias example will roll out their network at more appropriate times,unless adoption both on the consumer and merchant side is near universal,they are likely to face similar sudden surges in demand,with which they will be ill-equipped to cope,in the event of

52、sanctions.Even if the various Swift alternatives gain traction,they will not necessarily substantially reduce the impact of sanctions as many potential counterparties will cease trading with sanctioned parties,regardless of the payments system used.Cost is a further factor worth being considered.Nat

53、ional payments systems demand high upfront capital expenditure and substantial operating costs.These costs stem in large part from designing and maintaining resilient infrastructure that can prevent fraud,money laundering and terrorist financing as well as offering secure and innovative,universally

54、accepted payments systems.Meeting these standards constitutes an enormously complex and expensive challenge.If the goal is to obtain strategic independence,then these costs are only justified in the event of the imposition of sanctions which,for most economies,is an extremely unlikely outcome.TECHNI

55、CAL RESILIENCEAs digital payments networks have grown,their systemic importance has also increased and so too has the severity of the threat posed by service outages and the importance of ensuring that payments systems make use Given the growth in digital payments at the expense of cash,resilience a

56、nd reliability have become ever more important to the health of the global economy2.RESILIENCEof all available methods of mitigating this risk.Broadly,this vulnerability can arise from three different kinds of external shock:unexpected natural disasters;equally unpredictable malicious cyberattacks o

57、r terrorist action;or technological malfunctions or glitches arising from human error,unexpected spikes in volumes,aging or obsolete systems,or more general wear and tear.The frequency of the first two causes extreme natural disasters and cyberattacks is climbing.There were 7,348 major natural disas

58、ters between 2000-19,up from 4,212 between 1980-1999,according to Yale Environment 360.The frequency of cyberattacks and data breaches increased by 15.1%in 2021 compared to 2020,according to a report from ThoughtLab.To date,the worlds payments systems have had a good record of withstanding external

59、shocks of this kind.One of the most notable examples of this was in Japan following the earthquake and tsunami of March 2011,which led to the Fukushima nuclear disaster.The World Bank put the economic cost of the earthquake and its aftermath at$235bn,shaving almost 0.5%off Japans gross domestic prod

60、uct,making it the most omfif.orgEvolution of payments systems:National versus international6expensive natural disaster in history.Nevertheless,according to the Bank of Japan,Even in the aftermath of the earthquake,the nations payment and settlement systems and financial institutions,as well as the B

61、ank of Japan,continued to operate in a stable manner,and managed to maintain their normal functioning as financial infrastructure on the whole.The resilience of the Japanese payments system was a tribute to the operational and technological efficiency of the Bank of Japan Financial Network System(BO

62、J-NET),which is at the core of payments and settlement systems in Japan.A disruption in its operations would cause failures in interbank settlement of funds and Japanese government bonds,which in turn could have a serious adverse impact on peoples lives and economic activity,the Bank of Japan explai

63、ned.In the case of the great east Japan earthquake,a Japan Meteorological Agency seismic intensity of“5 lower”was recorded in the area in Tokyo where the Banks computer centre is located,but the earthquake did not affect the functioning of the BOJ-NET and the system continued stable operation.As a r

64、esult of these efforts,even on the day of the earthquake,funds and securities transfers over the BOJ-NET were completed at the normal scheduled times.Although the system was able to survive despite its centralised location,a more severe earthquake might have caused the system to fail,and redundancy

65、in the form of a back-up data centre elsewhere would have been safer.It is worth acknowledging the extremely impressive track record of reliability and resilience demonstrated by international payments systems,such as American Express,Diners Club,JCB,Mastercard and Visa.Outages and disruption are fe

66、w and far in between and resolved quickly,thanks to international payments systems maintaining sufficient geographically dispersed infrastructure and resources to meet recovery and resumption.International payments systems have demonstrated impressive resilience to terrorist attacks.Perhaps the most

67、 impressive among these was the performance of international payments systems in the wake of the 9/11 attacks on New York and Washington.The Securities and Exchange Commission noted that core payments systems continued to function well despite operational failures and telecommunication breakdowns am

68、ong major financial institutions which led to significant liquidity bottlenecks for several days.This resilience was all the more impressive because many financial firms were forced to halt operations because of offices in the World Trade Center.Although core payments systems were largely unaffected

69、,the 9/11 attacks nevertheless spurred many in the international payments systems community to improve their disaster recovery systems,building back-up facilities to allow them to continue business even in the most extreme circumstances.These changes are likely to have improved the resilience of int

70、ernational payments systems and subsequent instances of unrest,such as the war in Ukraine and political unrest in Venezuela,have not disrupted services.This has been especially important for Ukraine,where payments from abroad have helped to keep the country afloat during its war with Russia.Investin

71、g in resilience is often a difficult sell for governments,since it is almost always extremely expensive and provides no immediate improvements to the quality of service.Building duplicate synchronised payments processing centres involves high up-front investment and on-going costs to maintain and up

72、grade these systems.This kind of investment is not an immediately rewarding activity since,in the best case scenario,redundant capacity is never used.Only in emergency situations is the value demonstrated.There are economies of scale here such that a greater degree of standardisation in payments sys

73、tems means costs associated with developing this kind of technical resilience are lower.This means that the amount required to be invested on back-ups is likely to be lower on a per transaction basis for international payments systems,which can use the same systems to ensure resilience in their whol

74、e network.1.Outage of systemically important payment systems in selected jurisdictionsNotes:Transaction figures are for 2019 based on data from the BIS.Outage hours are based on public information of operational incidents associated with the RITS,July 2020,TARGET,Oct 2020,CHAPS Sterling,Oct 2014 and

75、 Fedwire Funds Service,Feb 2021.RITS also reported operational incidents in Feb 2015 and Aug 2018.Source:Bank for International Settlements:IMF staff.$235bnCost of the 2011 Japanese earthquake and tsunamiJurisdiction(payments system)Volume($m)Value of transactions($bn)Average value per transaction($

76、000)Value of transactions as a percentage of GDP(%)Outage(hours)Australia(RITS)1336.62.92.62Euro Area(TARGET2)89509.45.73.810UK(CHAPS Sterling)49106.32.23.79US(Fedwire)168695.84.13.23-4omfif.orgEvolution of payments systems:National versus international7THE range of functions expected of modern paym

77、ents networks is growing larger and larger.Digital payments networks,whether national or international,are increasingly expected to work both online and offline,and to provide comprehensive opportunities for payers to unwind erroneous transactions in order to provide protection to consumers and merc

78、hant.Most importantly,the threats that cyberattacks pose to consumers,merchants and governments are exploding.Payments systems must maintain a state of continuous research and investment to ensure that they have the tools necessary to combat more and more sophisticated threats.As with resilience,pro

79、viding this broad and expanding functionality requires state-of-the-art technology,huge expertise and continuous investments that can be expensive.OFFLINE PAYMENTSA core requirement for a versatile,modern and inclusive system is the capacity to make digital payments offline as is often required for

80、payments made in-flight.Making digital payments dependent on internet access can limit adoption in areas where it is rare or sporadic.In 2021,Visa launched a proof of concept initiative for offline payments in India.Initiated in line with the Indian governments commitment to broaden financial inclus

81、ion,this project was launched in partnership with a payments solutions provider,Innoviti,and two local banks,Yes Bank and Axis Bank.Many national payments systems Mexicos SPEI system for one are unable to offer offline transactions currently.While the provision of offline payments technology is rega

82、rded as a bonus feature in developed markets,for those in countries where internet access is sporadic,unreliable or less than total,it is a necessity if people are to move away from total cash reliance.CUSTOMER SERVICE AND CHARGEBACKSThe chargeback process is a common feature in international card p

83、ayments systems,allowing users to unwind payments made erroneously or if products or services were not delivered.If a payer makes a card payment to the wrong account,they can contact their bank and,if the claim is valid,the bank can return the funds to the cardholder.International payments systems,s

84、uch as Visa,Mastercard,Diners Club,American Express and PayPal,have comprehensive arbitration procedures to ensure payments are returned when appropriate and to prevent abuse of the system.National payments systems do not always have such features.Brazils Pix system is among the more popular and suc

85、cessful national payments systems examined for this report.There was an extremely extensive television marketing campaign to promote its adoption.Introduced at the end of 2020,Pix is partly responsible for a substantial decline in households cash use in Brazil throughout 2021.Some 122m individuals h

86、ave used Pix since its launch,according to the Brazilian central bank.However,despite this widespread adoption,Brazilian citizens still have How to meet needs of customers3.FUNCTIONALITYconcerns stemming from the lack of a customer service procedure to reverse payments.Qualitative research published

87、 by Finthropology highlighted a vulnerability to criminal abuse wherein criminals force people to transfer money to them via Pix.The Pix app has the functionality to support negotiations between payer and payee but this reimbursement procedure must be initiated by the payee.Partly as a result of thi

88、s,Finthropologys research revealed that some citizens do not consider Pix safe.Others said that they were unwilling to use it because of their concerns that,if they send the payment to the wrong address,they will have no means of recovering the funds.omfif.orgEvolution of payments systems:National v

89、ersus international8SECURITY,ANTI-MONEY LAUNDERING AND FRAUD PREVENTIONThe technical systems underpinning payments security are complex and multifaceted.There are a variety of design choices that payments system designers,national or international,must make to minimise fraud.Digitalisation and advan

90、ces in technology are constantly creating new opportunities for everyone,including for bad actors to exploit potential vulnerabilities.Tools have evolved rapidly,with distributed denial-of-service and ransomware attacks posing new costly threats to customers,businesses and governments,and raising th

91、e bar in terms of what banking systems,as well as payments systems,need to do in order to fight fraud.Exact figures on the amount lost to fraud vary widely from provider to provider.Juniper Research suggests that$41.4bn will be lost to payments fraud in 2022 Protection against fraudulent payments ha

92、s become increasingly important as the use of cash has diminished and consumers and merchants are carrying out more digital,e-commerce and cross-border transactions.Already underway long before coronavirus,this gathered unprecedented momentum during the pandemic.The Federal Reserve is sensitive to t

93、his risk and is committed to strengthening the financial system in response.Progress closing data gaps will improve the assessment of cyber vulnerabilities and identification of mitigants,the Fed noted in May 2022.In the meantime,better information sharing and a coordinated response to successful at

94、tacks can improve mitigation.Collaborative efforts within the official sector and joint with industry and academia also can increase understanding of the systemic dimensions of cyber risk,including the potential for the financial system to amplify the effect of a cyber event and the potential to mit

95、igate the spillover effects.One of the issues with this development is that fraudsters are able to apply their techniques on a global basis,exporting successful systems from region to region in search of vulnerabilities and moving to the weakest link.This will not work against international systems

96、because,once they have experienced a fraud,they can implement protections against it to prevent it happening again.National systems do not have this global exposure and so are more likely to be reactive than proactive.This means that the use of different systems in different jurisdictions leaves vul

97、nerabilities,with the consequences extending beyond the borders of a jurisdiction because of cross-border trade.Unless a domestic scheme can keep up with the pace of development maintained by international schemes,which have the advantage of the ability to monitor risks around the world,there is the

98、 threat that any deficit in their security creates opportunities an island that fraudsters can exploit.Mexicos Interbank Electronic Payment System(SPEI)fee structure is based on the principle of recouping costs.As such,security and cost of use are inextricably linked.If the sophistication and freque

99、ncy of cyberthreats climb,the Bank of Mexico will presumably need to raise the costs it passes on to members without the benefits of economies of scale.This is a particular threat for smaller nations.If the development of payments infrastructure takes place under conditions of limited financial reso

100、urces and technological expertise,its efficacy will be weakened,leaving the system vulnerable to malfunctions and criminal activity.For many nations,it will prove challenging to match the level of investment as well as the technical expertise and experience of the international payments systems,incl

101、uding American Express,Diners Club,JCB,Mastercard and Visa,which benefit from economies of scale when recouping their costs.For instance,in Bangladesh,hackers were able to steal some$101m from the New York Federal Reserve account held by the Bangladesh Bank the nations central bank.Using malware,hac

102、kers based outside Bangladesh were able to observe how transfers were completed and obtain Swift credentials to sign into the network,issuing fraudulent instructions resulting in the transfer of$20m to Sri Lanka and$81m to the Philippines.Nevertheless,authorities that have developed their own nation

103、al payments systems insist that they have infrastructure in place to protect against cybersecurity breaches,deploying technology such as artificial intelligence,which is equally as robust as those entrenched in international systems.The Saudi Central Bank,for example,notes that it has implemented a

104、variety of measures in terms of mature processes that follow the industrys standards and best practices.We also have market leading cyber technologies that secure our payment ecosystem along with constant cyber monitoring.Our systems follow the industrys leading standards;we leverage multiple techni

105、ques such as tokenisation,encryption and signing to ensure the confidentiality and integrity of our ecosystem.We have employed technologies that help minimise cyber fraud impact.We rely on multiple global threat intelligence sources.We also have the process and technologies to share our produced thr

106、eats across the financial industry within the kingdom.Our cyber technologies utilise multiple methods including but not limited to artificial intelligence.Not all countries will have the resources or the technical expertise to invest in expensive fraud prevention technology like tokenisation,a proce

107、ss of encrypting card numbers to prevent them being copied by bad actors during the payment process.According to the Dutch Payments Association,although the e-commerce market grew strongly,remote card payments fraud(card-not-present fraud)damages decreased by 43%to 2.2m in 2021,compared to 2020 duri

108、ng which time the Netherlands relied on international payment systems security.The mandatory double security of online card payments has had a positive effect on CNP fraud.Cyber attacks have evolved from viruses to the ransomware attacks that have high pay off for the cyber criminal community2004Vir

109、usWormsTrojan2007Identity theftPhishing2010DNS attackBotnetsSql attacksAnti-spam sitesCompetitive sabotage2013Social engineeringDoSBotnetsMalicious emailPoSPRESENTBanking malware,Key logger,Bitcoin stealer,Phone hijacking,Cyber warfare,Mobile attacksAPT,DDoS,Ransomwareomfif.orgEvolution of payments

110、systems:National versus international9ANOTHER essential component is efficient interoperability.At its simplest level,this refers to the ability of different payments systems to work with one another either locally or across borders and time zones.The quality of interoperability is fundamental to th

111、e globalisation of all digital services.Online interactions rest on effective interoperability emails can go to accounts from other providers and so on.In card payments,the EMVCo specifications provide a foundation for the standardisation required for interoperability.The economic benefits of intero

112、perability in payments are compelling and quantifiable.According to World Bank calculations,enhanced efficiency through interoperability could save 0.7%of gross domestic product per year.While the benefits of seamless interoperability between payments systems are extensive,achieving it requires buy-

113、in and co-operation among industry players,governments and infrastructure providers.This implies that the systems best positioned to maximise the benefits of interoperability are internationally,rather than locally or even regionally,focused.On the other hand,the costs to merchants and acquirers of

114、a lack of interoperability are considerable,since it requires them to invest in more point of sale infrastructure or risk losing sales.Accordingly,this kind of interoperability should not be seen as a luxury extra feature but a necessity to ensure merchants can conduct business,particularly for thos

115、e businesses that operate in multiple markets.It is more complicated and costly if these markets require their own payments solution.DOMESTIC INTEROPERABILITYWhile a variety of new payments solutions from both the public and private sectors are emerging,frequently these offer good and efficient conn

116、ectivity and broaden access to formerly excluded groups,but only offer transaction services within their own network.WeChat and the M-Pesa fall into this category.Meanwhile,central banks in emerging as well as developed economies are alive to the importance of interoperability across payments system

117、s.For example,the South African Reserve Bank,whose national payments service at present only offers domestic interoperability,observed that the proliferation of closed-loop domestic remittance networks in South Africa,used by consumers(particularly the unbanked and underbanked)to send and receive pa

118、yments,is one manifestation of the lack of interoperability.The current fragmented environment of closed-loop remittance systems hinders consumer choice,as they are either forced to receive funds using a remittance network chosen by the sender or have limited availability of networks in their area.S

119、ARB acknowledged that much needs to be done to achieve interoperability in South Africa and has included regional and global interoperability among its goals in its Vision 2025 development project.Interoperability continues to be an important policy objective for the South African NPS,noted the Sout

120、h African Reserve Bank.Interoperability prevents fragmentation:multiple,disparate payments systems providing World can reap benefits from payments systems that talk to each other4.DOMESTIC AND CROSS-BORDER INTEROPERABILITYsimilar payment offerings,where such offerings are available only to a select

121、set of customers.Similarly,the Vision 2025 paper from the SARB continued:Promoting interoperability would enable consumers across South Africa to send and receive funds using the most convenient and most affordable remittance method available and would increase competition between remittance provide

122、rs.Increasing interoperability between formal and informal payments systems,as well as between financial infrastructures,would increase efficiencies,lower costs,and lead to more competition and innovation in payment service provision.omfif.orgEvolution of payments systems:National versus internation

123、al10CROSS-BORDER INTEROPERABILITYCross-border payments are,by definition,more complex than domestic payments because they deal with multiple jurisdictions,time zones,banking systems,currencies and data formats.International payments systems,such as American Express,Diners Club,JCB,Mastercard and Vis

124、a,have,of course,a natural advantage in that they are already in operation all over the world and do not need to establish technical interoperability relationships bilaterally with every potential counterparty.While operators of national payments systems have had success in negotiating bilateral arr

125、angements with their key counterparties,the number of connections a modern,well-connected economy requires quickly becomes unwieldy.Multilateral arrangements where many countries plug into the same payments network are simpler.One example of this is the P27 initiative.P27 is a pan-Nordic payment inf

126、rastructure that was launched in 2017 by six Nordic banks.Once operational,it will provide a platform for payments in Nordic currencies and euro across several countries,in line with consumers,merchants and banks wishes for cross-border payments.The ease with which Nordic citizens and business will

127、be able to transact across borders with P27 is proving extremely attractive to central banks,governments,businesses and citizens.Using the ISO20022 standardised data format means that payments can be processed efficiently and more automation can be introduced.This has broadly been true across Europe

128、,with the UK,Ireland,the Netherlands,Sweden,Finland and many others following suit,abandoning their national payments systems in favour of the cross-border connectivity offered by the Single Euro Payments Area.Typically,these national schemes were owned and operated by banks,who discontinued their i

129、nitiatives in favour of the international alternative that offered them many of the same features of their domestic schemes,but with better cross-border connectivity.Continuing to operate the domestic scheme in parallel would have been expensive and redundant.For example,the Netherlands maintained a

130、 national payments system for debit card payments until 2012 and for giro payments until 2014.Both were rendered largely obsolete by the advent of SEPA harmonising the handling of cashless payments across the European Union.This allowed credit transfers,direct debit payments and credit card payments

131、 to be made by European consumers,businesses and public administrations.When SEPA became a reality,the Dutch banks that collectively owned the domestic card scheme adopted Mastercards Maestro debit card and Visas V Pay.The case of Finland is quite similar.Domestic bank cards came to a halt in Finlan

132、d in 2008 and were phased out entirely in 2010,in preparation for the launch in 2014 of SEPA.In terms of weighing up the relative merits of replacing their national systems with international ones,the central banks of Finland and the Netherlands both reported that there were some minor advantages as

133、sociated with their national payments systems.The domestic card scheme was a cost-efficient solution for merchants because it had low transaction costs,said Matti Hellqvist of the Bank of Finland.However,this benefit was easily outweighed by cross-border utility.But for consumers its use was limited

134、 to Finland,as it had no cross-border utility.Also,it was magstripe-based which was more vulnerable to fraud,whereas the transition to EMV Europay,Mastercard and Visa chips was taking place at the time of transition.The Dutch central bank,meanwhile,noted that another advantage of a national payments

135、 system is that it allows the authorities to enact any necessary changes more rapidly.When you have a closed system,as the non-euro countries have in Europe,you can act more quickly because you dont have to take into account each of the different countries payments systems and providers.You can also

136、 be more flexible because you have a smaller geographical scope,said a spokesperson for the Dutch central bank.This consideration was similarly outweighed by easier cross-border connectivity.However,when all those national payments systems have to talk to each other in order to make cross-border pay

137、ments a reality,then its less efficient because different settlement times,for example,can slow the process.In many cases,the principal shortcoming has arisen from the costs associated with reinventing a wheel which is already functioning efficiently in most countries around the world.Euro area cent

138、ral banks which abandoned national payments systems following the launch of SEPA have reported that they did so chiefly because its advent made many of the functions of Europes former national payments systems obsolete.Cross-border payments are of increasing importance economically.Accordingly,natio

139、nally owned payments systems are looking to expand abroad to improve their cross-border functionality.In tandem with Chinas growing influence globally,Shanghai-headquartered China UnionPay has expanded overseas considerably in recent years.UnionPay International reported that its cards are now accep

140、ted in 181 countries and issued in 77.It said that UnionPay International provides high quality,cost effective and secure cross-border payment services to the worlds largest cardholder base and ensures convenient local services to a growing number of global UnionPay cardholders and merchants.Accordi

141、ng to Reuters,UnionPay is fast catching up with global competitors in absolute volume processed,benefiting largely from the rising purchasing power of Chinese buyers domestically and overseas.This is an effort to expand Chinas financial influence globally.The recognition of Chinese brands,especially

142、 in finance,is very low abroad.Companies like this UnionPay are trying to change that,said Simon Lee,assistant dean,undergraduate studies,and senior lecturer of the school of accountancy at the Chinese University of Hong Kong Business School,in an interview with the Financial Times in 2017.Chinas ab

143、ility to promote the use of UnionPay is inextricably linked to its economic dominance in the region.Smaller countries without Chinas trading dynamics will find it much harder to export their systems.Then,of course,there is Mir,the Russian system,which is also an option that some countries seem to be

144、 considering.Russia has been making strong efforts to increase its acceptance among its trading partners,particularly Turkey,which is a major importer of Russian natural gas,for which it pays in roubles.However,OFAC has,as mentioned,made it clear that this is not a means of circumventing sanctions w

145、hich has meant that Turkey is starting to step back from this relationship.Denizbank and Bankasi AS have both stopped processing transactions using Mir.Iran,on the other hand,is reported to be at an advanced stage of talks with Russia over joining the Mir system.Russias news agency reported in July

146、that Iran was ready to accept payments made with Mir bank cards.In some other economies,the question of alignment with the Russian payments system is more nuanced.Banks in India,for example,remain undecided about the merits of joining the Mir system.However,it is clear that many national payments sy

147、stems are doing their best to attract international co-operation with key trading partners to ease the process of sending funds across borders.It is important to acknowledge these valuable but limited successes,while at the same time admitting that it is an immense challenge for any national system

148、to achieve the level of acceptance offered by international systems.When viable options like the P27 and SEPA emerge,countries have opted to go with the international network to improve connectivity.Chinas ability to promote the use of UnionPay is inextricably linked to its economic dominanceomfif.o

149、rgEvolution of payments systems:National versus international11Only the broadest possible access will deliver economic benefits5.INCLUSIONAT the most basic level,efficient and innovative payments systems can support economic resilience by reducing the costs of exchanging goods and services and buyin

150、g and selling assets.A robust system is fundamental to the expansion of financial inclusion and the development of an efficient,liquid and low cost capital market.A weak system,by contrast,can lead to unnecessary costs for consumers and businesses,reduce the competitiveness of local banking and capi

151、tal markets,and act as a drag on economic activity,productivity,job creation and innovation.Giving the broadest possible access to users facilitates the broadest range of economic activity and benefits for individuals and businesses alike.Both national and international payments systems can be vecto

152、rs to improved financial inclusion.A number of payments systems,such as M-Pesa,have been highly successful in promoting financial inclusion in emerging economies.M-Pesa was launched in 2007 by Vodafone and Kenyas largest mobile network operator,Safaricom.With more than 51m customers across seven cou

153、ntries in Africa,M-Pesa describes itself as the preferred way to make payments across the continent both for the banked and unbanked due to its safety and unmatched convenience.It also provides financial services to millions of people who have mobile phones,but do not have bank accounts,or only have

154、 limited access to banking services.The development of the Saudi Arabian national payments system was also originally motivated chiefly by the low usage of formal banking services in the country.As recently as 2009,over 90%of retail consumer payments were in cash,while less than half of the adult po

155、pulation had a bank account.Besides the increased efficiency,reduced costs and lower security risks arising from a reduced use of cash,there were other important motives for the development of the Saudi payments It is also important to consider the value that easy cross-border payments have for fina

156、ncial inclusionomfif.orgEvolution of payments systems:National versus international12network(later renamed mada).One of these was the governments commitment to enhancing the efficiency and quality of the countrys payments systems and positioning them as a key enabler for achieving national economic

157、goals.Another long-term objective was to promote and support the development of the fintech sector in Saudi Arabia,thereby helping to accelerate the countrys transition to a digital economy.Increasingly,authorities across the emerging market universe are confident that the introduction of retail cen

158、tral bank digital currencies will play an important role in strengthening economic systems and promoting financial inclusion.This was foremost among the motives for the planned launch of a retail CBDC in Mexico.However,early indications are far from encouraging that this is a route to financial incl

159、usion.The launch of the digital peso is part of a broader programme designed to modernise Mexicos payments system and broaden financial inclusion.This is an urgent priority in a country where about 90%of the population still uses cash,while fewer than one-quarter of residents have a bank account.The

160、 initiative was kickstarted in 2019 with the introduction of the Cobro Digital Programme(CoDi).This aimed to use quick response codes and near-field communication technology to bring free electronic banking accounts within the reach of every Mexican citizen.Its early experience was discouraging.As S

161、&P Global commented at the end of 2020,More than a year after launching.CoDi is still struggling for relevance.So far,the initiative has garnered 6.4m users,far short of Banco de Mxicos goal for 18m accounts by Septembers end.Usage is also weak,with just over a million transactions so far;the centra

162、l bank wanted 28 times that amount by now.This disappointing uptake was attributed in part to Covid-19.But it was also said to have been a function of the unfavourable economics that have bedevilled new payments systems in some more developed economies.According to the S&P Global analysis,To be sure

163、,CoDi doesnt offer banks a short-term cost-reward benefit:financial institutions have to front the bill for implementing it yet will earn no fees from doing so.Nevertheless,awareness of the benefits of electronic banking has been gathering momentum in Mexico since the launch of CoDi.According to Sta

164、tista,while cash remained Mexicos most used payment method since Covid-19,its market share has decreased conspicuously with only 4 out of 10 transactions in brick and mortar stores using physical money in 2021.Nigeria is another large emerging economy that has found encouraging the adoption of innov

165、ative payments systems more challenging than it had expected.After a short delay,Nigeria launched its digital currency,the e-naira,at the end of October 2021.Introduced with much fanfare as the first digital currency in Africa,it was promoted by the Central Bank of Nigeria with the slogan Same naira

166、.More opportunities.During the launch,Prime Minister Muhammadu Buhari told the media he expected the e-naira to boost Nigerias GDP by$29bn over the next 10 years.The principal objective of the e-naira project was to widen financial inclusion.With good reason.According to KPMG,more than one in three

167、Nigerian adults are financially excluded,With no access to useful,relevant and affordable formal financial services such as payment,savings and credit.Of the 106m adult Nigerians in 2020,44.8%were banked,while 5.7%and 13.6%were served by other formal channels and informal financial service providers

168、.The e-naira project has three additional objectives besides addressing the poor penetration rate of formal banking services in Nigeria.According to the CBN,it will increase local and international trade by making transactions cheap,safe,quick and better.It will improve security because it cannot be

169、 forged or counterfeited as a result of its unique identity and security structure.And it will aid revenue collection by reducing cash handling costs.A few months after its launch,there was precious little evidence that the e-naira was achieving traction in any of these areas.Among respondents to a

170、poll conducted in February 2022,only 4%had used the e-naira;of more concern,64%knew nothing about it.Among point of sale merchants participating in this poll,meanwhile,67%did not know what the e-naira was.While 16%had downloaded the digital e-naira wallet,none had used it.The experiences of Mexico a

171、nd Nigeria suggest that the process of adoption will be lengthy and require extensive education and promotional campaigns.By extension,the upfront costs associated with such initiatives will only be recouped over the long term and it may be many years before any of the economic and social benefits b

172、ecome visible.It is also important to consider the value that easy cross-border payments have for financial inclusion.Migrants often send money home to their families via remittance networks.These are unlikely to be efficiently provided by national payments systems.Nigeria is another large emerging

173、economy that has found encouraging the adoption of innovative payments systems more challenging than it had expectedomfif.orgEvolution of payments systems:National versus international13MUCH of the innovation in the payments industry relates to enhancing and improving cross-border connectivity as we

174、ll as best in class innovation and safety features.For the reasons discussed above,international payments systems,such as American Express,Diners Club,JCB,Mastercard and Visa,are best placed to deliver these kinds of improvements.Innovation also requires a process of continuous investment,which many

175、 national payments system operators will struggle to afford.For the international systems,their funding for innovative research is drawn from a much wider pool of transactions and revenue base than national systems may have.However,countries that have successfully developed national payments systems

176、 are adamant that these have stymied neither the competition nor the innovation that is necessary to deliver enhanced efficiencies,reduce costs and widen financial inclusion.Take the example of the national payments system in Saudi Arabia,mada,which connects all automated teller machines and POS ter

177、minals offered by local banks throughout the country to a central payments switch that in turn reroutes the financial transactions between a merchants bank and the card issuers bank.The Saudi Central Bank reported that by providing a centralised platform for retail(card-based)payments,independently

178、operated by itself(through its authorised payments system operator Saudi Payments),it facilitates a permissioned access universal payments infrastructure,offering membership-based access to over 1.2m POS terminals nationwide.As a centralised platform,the mada network offers a non-discriminatory serv

179、ice level to all participants and means that account and payments service providers need not be active on both the issuing and acquiring legs of a transaction to be part of the service.This in turn has fostered healthy competition within the national payments market.The SCB explained that,as the lar

180、gest single retail payments infrastructure in the country,accounting for over 5bn payment transactions at POS terminals alone in 2021,the mada national payments system is one of the key enablers facilitating the new-wave of fintech competition in the kingdom.The SCB reported that its analysis of the

181、 kingdoms fintech landscape concluded that,as of mid-2022,more than 40%of all new fintech development has been in the payments space.Moreover,the NPS infrastructure,supported by progressive payments service provider(and electronic money institution)regulations and the deployment of the regulatory sa

182、ndbox(from 2018)have facilitated a significant increase in competition,expansion of service capacity and improvement in operating service levels.It added that the build-out of technical capability at the centralised mada switch(operated by Saudi Payments),accessed through a standard interface,publis

183、hed operational pricing regime(switch fees)and regulated inter participant(interchange)and merchant pricing regime facilitates a level playing field for participants and a positive platform for innovation and competition.On the other hand,the South African Reserve Bank recognised that at a co-operat

184、ive industry level,innovation in domestic electronic payments infrastructure has been sluggish.It added that this may be attributable to competitors unease about working together,arising from a previous competition commission enquiry into banking practices.But the central bank insisted that in netwo

185、rk economies and two-sided markets,co-operation is necessary to address country-and industry-level NPS objectives in the best interest of the transacting public of South Africa.Regarding competition,there is another benefit of allowing several interoperable payments systems to compete to provide ser

186、vices to consumers and businesses.Returning to the question of technical resilience,having multiple payments systems builds natural redundancy into the system in the event of failures or outages.Any central bank considering launching its own national payments system must take care not to erode this

187、natural resilience by hampering the ability of other payments systems to continue to operate in their economies.Beyond the natural resilience that multiple competing systems offer,if a national payments system becomes a monopoly in its jurisdiction,the competitive drivers that improve consumer outco

188、mes and lower costs disappear,which is likely to lead to a worse service.Building best in class safety and innovation features6.COMPETITION AND INNOVATION5bnNumber of POS transactions processed by Saudi Arabias mada system in 2021omfif.orgEvolution of payments systems:National versus international14

189、ONE of the key examples of multilateral cross-border arrangements is the Single Euro Payments Area,but its own history has been far from simple and it has struggled to expand its services into card payments because of cost.The Single Euro Payments Area was initially introduced for credit transfers i

190、n 2008;direct debits followed in 2009.This paved the way for full implementation of the SEPA project in 2014 and its extension to non-euro area countries in 2016.As of October 2020,there were 36 countries in SEPA,including several that are neither part of the euro area nor the European Union.Buildin

191、g the equivalent system in the cards market a so-called SEPA for cards has been more challenging.Europe has seen a number of attempts to establish a regional card payments network.These have ranged from the Euro Alliance of Payment Schemes,formed in 2007,to the PayFair card project in 2012 and the M

192、onnet plan,which was abandoned in 2012.According to the European Central Bank,the failure of various initiatives to establish a common card payment mechanism can be attributed to national card schemes and banks failure to recognise a viable business case in the short term.This has not weakened the E

193、CBs enthusiasm for a common market for payment cards.Cards play a major role for European citizens and businesses conducting their daily payment transactions,it argued in 2019.Thus,the Eurosystem continues to strongly support the creation of a SEPA for cards.Despite some positive steps in recent yea

194、rs,the Eurosystem has observed that a SEPA for cards has not been achieved yet and progress towards establishing it has been slower than hoped.In addition,recent developments in the payments market have the potential to substantially affect the cards business.The most recent of these was the Europea

195、n Payments Initiative,launched in July 2020 by a whos-who of European banks with the promise of challenging international payments systems by delivering a new,pan-European standard of payments.The EPI,which has the backing of the ECB,said that its shareholders want to bring value to the market by of

196、fering an end-to-end payment solution based on the Instant Payment scheme as defined by the European Payments Council,covering multiple use cases(e.g.merchant payments and peer-to-peer payments),secure,immediate and easy-to-use.Europe has now the opportunity to leverage instant payments.This initiat

197、ive is therefore in line with recent positions from European public authorities urging banks and payment service providers to build a payments solution on top of the Instant Payment scheme and to offer an alternative and independent payment system.It added that the EPIs objective is to offer a consi

198、stent digital payment solution for all major retail use cases(peer-to-peer,point of sale,e-commerce and mobile commerce)that can be used anywhere in Europe and to supersede the fragmented landscape that currently exists.In doing so,EPI founders are responding to merchant and consumer communities tha

199、t have been calling for payment initiatives to take a more pan-European approach.Like its antecedents,the EPI has already had a troubled life.By November 2021,it was reported to be appealing for public financial support,conceding that its backers from the private sector were baulking at the costs in

200、volved in rolling out the system,which the EPI conceded were massive.By March 2022,more than half of its original participants were said to have pulled out of the scheme,including influential European banks such as CaixaBank of Spain and DZ BANK and Commerzbank of Germany.This forced the EPI to scal

201、e back its ambitions.We have decided to redefine EPIs scope and agreed that,unfortunately,we have to abandon the card scheme plans(the idea of creating a European card scheme and setting up a European card),its chief executive officer,Martina Weimert,told in June 2022.Nevertheless,with the remaining

202、 banks and players,we agreed that it would make sense to focus on an account-to-account instant payment solution for all kinds of use cases,all through a wallet.Although the card would have been nice due to the tremendous volumes that usually come with cards,we decided to focus on the account-to-acc

203、ount instant payment part instead.And since we implement it through a wallet,we can also address the digital euro and digital identity features.We cannot be a direct competitor to Visa and Mastercard on the card side anymore,she added.However,as we are seeing,we will have the additional push of the

204、regulator towards instant payments.Our goal now is to be established as a European alternative through account-to-account and request-to-pay payments.So,despite a clear desire to create a multilateral card payments system offering seamless regional connectivity,the difficulties encountered have so f

205、ar proven too much for the euro area to overcome.While the benefits of cross-border interoperability are clear and widely-accepted,the path to achieving it is far more complex and requires extremely high levels of investment.Despite a clear desire to create a multilateral card payments system offeri

206、ng seamless regional connectivity,the difficulties encountered have so far proven too much for the euro area to overcomeEuropes struggles show difficulties of creating new systems7.CHALLENGES OF INVESTMENT:THE EUROPEAN PAYMENTS INITIATIVEomfif.orgEvolution of payments systems:National versus interna

207、tional15It is undeniable that a strategically independent payments network is an attractive concept for countries that anticipate the imposition of sanctions.International payments systems will suspend their service in such cases and countries will be left without the ability to use their digital pa

208、yments systems.However,it is important to acknowledge two things.First,for most countries,sanctions are an unlikely eventuality.Second,although a national payments system will provide an avenue for domestic digital payments,it will not necessarily provide a means for sanctioned parties to transact a

209、cross borders with counterparties,since they would face sanctions themselves.For those that dont see resilience from sanctions as a primary concern,technical resilience and reliability are more important.Broadly,there are two approaches to ensuring this.A country can either establish a domestic paym

210、ents network entirely under its control or leverage the possibilities of international payments systems,ensuring control through strict oversight provisions.The former option requires a great deal of technical expertise and entails significant up-front and continuous investment in order to develop t

211、he redundant capacity to resist outages and the cybersecurity architecture to combat an ever-expanding range of digital threats.Countries must also make sure that,in establishing this domestic player,they do not compromise the natural resilience born of having numerous interoperable payments systems

212、 in competition.Countries will find it hard to compete with the experience and the economies of scale that international payments systems are able to leverage,as well as their ability to share resources between jurisdictions.Similarly,consumer and business expectations of the functionality offered b

213、y payments systems are constantly expanding.Merchants must be able to offer consumers the ability to transact in whatever new and convenient ways emerge,or risk losing business and being at a competitive disadvantage to merchants using payments systems that can support new methods.Even if these high

214、 and difficult standards are met,it is far from a given that a system will be widely adopted by the population.Perhaps the most important differentiation is in cross-border connectivity.As we have seen,some national payments systems operators have been able to negotiate bilateral acceptance agreemen

215、ts with key trading partners.While this can be helpful,the complexity of developing internationally acceptable payments networks through this method is enormous.Typically,when an international multilateral solution presents itself,national operators go with it and abandon their existing system.TECHN

216、ICAL GAPSSome central banks interviewed were not equipped to discuss technical questions regarding the details of their payments systems and the features of the systems that underpin them.The below points are worthy of consideration for central banks contemplating adopting national payments systems.

217、1.Will the national payments system and its associated services be run in-house or rely on third parties?If the former,are you confident you have the resources and technical expertise required?If the latter,how will these be selected and how will they be overseen?If strategic resilience is a motivat

218、ing factor,can this be guaranteed with third party involvement?2.Will data storage and processing be centralised or decentralised?3.How will widespread adoption be encouraged?4.Will the revenue generated be enough to cover the investments necessary to provide thorough protection from fraud and cyber

219、crime,including real-time fraud monitoring,tokenisation and artificial intelligence solutions?What about biometric verification and 3D secure integration?5.Similarly,with the dynamic and changing payments landscape,how will interoperability with new systems,such as digital wallets,buy now,pay later

220、schemes,and open banking,be maintained?The question of whether a national payments system is a viable or wise choice for a given central bank depends on many country-specific factors.Those considering such a system should have an extremely high degree of technological capacity and a high tolerance f

221、or a large investment of resources that may not be fully recouped for a long time,if ever.They must also develop a strategy for deployment to promote adoption and,ideally,have a strong relationship with key trading parties to ensure that they can efficiently set up cross-border relationships.Weighin

222、g up these costs and requirements against a desire for strategic independence of payments systems is a key responsibility for central banks.Balancing risks and benefits8.CONCLUSIONCountries will find it hard to compete with the experience and the economies of scale that international payments systems are able to leverage