Using Interoperability to Become Cashless
New Delhi, India: December 22, 2016, LiveMint, a leading English daily published an article titled ‘Using interoperability to become cashless’. The article debates how the recent monetary experiment has provided an opportunity to focus on India’s non-cash payment infrastructure.
The news item states that the aftermath of the government’s decision to withdraw high-value banknotes have reached fever pitch. In the public discourse on Facebook and Twitter, arguments have usually taken colour from the political affiliation of the commenter; in more hallowed debates among policy wonks and economists, the views appear to be sharply divided on whether the withdrawal will bring net benefits or not. Some influential voices (Kenneth Rogoff, Larry Summers, among others) have argued that this monetary experiment may hurt. Others (like Bibek Debroy, J.R. Varma and Vivek Dehejia) have argued in favour of the withdrawal—that this will operate as a one-time tax on the current float of unaccounted-for wealth stored in cash while whiplashing the consumer economy into digital (or plasticized) transactions. Regardless of the merits of the measure, however, what seems certain is that unless the government and regulators act swiftly to put in place infrastructure facilitating digital transactions, the potential positives will remain just that—potential positives.
One such critical infrastructural necessity is the interoperability of prepaid payment instruments (PPI), popularly known as wallets. While interoperability has several dimensions, in its simplest form it is the ability of, say, a Paytm user to transact with a merchant/user that uses another wallet (say, Freecharge). The ATM provides the most visible example of interoperability in retail finance. You walk into the ATM of any bank and swipe a card issued by your bank and withdraw cash. The card/point-of-sale terminal ecosystem is another example of interoperability. Interoperability is said to have pro-competitive effects and also promote financial inclusion.
The authors of the article are Sakshi Chadha, Manager, MicroSave and Mandar Kagade, Policy Analyst, Bharti Institute of Public Policy, Indian School of Business. Read the entire article here.
DFS: Are We Realising Their Full Potential? Join us for a discussion on 19th Jan 2017, London
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Digital financial services are now being touted as the answer to financial inclusion. But there are growing concerns that DFS primarily focuses almost exclusively on payments – not least of all because the mobile network operators are leading the charge, and banks typically remain laggards.
Having asked the poor to run the marathon out of poverty on one leg (microcredit), are we doing the same again by asking them to run the race with digital payments alone? We know that the poor need a range of financial services (savings, credit, insurance and payments) and thus real financial inclusion must necessarily provide all of these. Further details are available on
So how do we move DFS beyond payments? And are we doing enough?
About the speakers:
Graham A.N. Wright founded MicroSave and is currently its Group Managing Director. Graham has been deeply involved in digital financial services (DFS) from the days he sat on the original steering committee for M-PESA and supported its initial pilot-testing process. He has worked on a wide variety of DFS projects with banks and telcos in Bangladesh, Colombia, India, Indonesia, Kenya, Papua New Guinea, South Africa, Tanzania and Uganda.
Anant Nautiyal is a Manager for the Mobile Money Programme at GSMA. In this role, Anant manages engagements in markets with mobile operators to foster collaborative ecosystem initiatives (such as merchant payments, PAYG service provider payments, interoperability and more). Prior to joining GSMA, Anant worked at the International Telecommunication Union (ITU) in Geneva, and in philanthropic and consulting roles in the ‘mobile for development’ space.