Digital Finance Interoperability & Financial Inclusion: A 20-Country Scan

Interoperable payment systems have the potential to make it easier for people to send payments to anyone and receive payments from anyone quickly and cheaply. In 2016, CGAP commissioned Glenbrook Partners to conduct a 20-country scan that assesses the state of interoperability - the ability for different systems to connect with one another- in select markets to better understand the global landscape in regard to interoperability. The study focused on payments from and to small-value transactional accounts that are accessible to mass-market consumers. For comparability, the scan defined interoperability as the ability for a digital financial service account to make specific kinds of transactions across two or more providers.

The scan found that:

• Some form of interoperability is present in each market, but progress remains slow in increasing the number of use cases and volume of transactions per use case.
• Conditions on the ground are complex and messy, with all 20 countries in the scan showing multiple approaches in play at the same time.
• Six countries are pursuing a “market-wide” approach, whereby some type of central plan covers a majority of providers for a majority of use cases.
• Four countries are pursuing a “focused” approach, whereby a subset of nonbank providers have joined together to make their own arrangement, which is largely separate from mainstream banking.
• The remaining 10 markets do not yet exhibit a dominant pattern; for these 10, a mix of these approaches may be happening simultaneously.

This Working Paper is supported by a PowerPoint slide deck containing one-page descriptions of each of the 20 countries in the scan.