As fast payment systems expand across Africa, they are reshaping transaction flows. Yet, instant payments also raise new questions about governance, interoperability, and financial inclusion. This white paper compares Nigeria’s established NIBSS Instant Payment system with Ethiopia’s newly launched EthioPay-IPS to show how differing design choices affect the reach and resilience of instant payment systems. In it, the authors review core program design, governance and risk management, market integration, and cross-border connectivity, and draw on transaction trends and institutional trajectories to explain why pricing, distribution, use cases, and stakeholder coordination determine how these payment systems scale.
Digital financial inclusion in Rwanda: Successes, usage gaps, and the next priorities
Rwanda’s digital money efforts have reached 85.3% of Rwandans, or 7 million people. The difficult question is whether it works for them, and the case of two Rwandans makes that clear. The first is a salaried civil servant in Kigali who pays her electricity bill, her children’s school fees, and her health insurance entirely through her phone. She never visits a single counter. The second is a young woman who sells vegetables at a weekly market in the Southern Province. She has heard of mobile money and even lives within walking distance of an agent. Yet, she does not own a mobile phone, lacks a regular income, and has never made a digital transaction in her life.
Both women are Rwandan adults. Yet, only one of them is counted among the 85.3% of Rwandan adults who are now digitally financially included, based on the AFR FinScope 2024 Digital Financial Services Thematic Report. This figure places Rwanda among the highest-included countries in sub-Saharan Africa, a remarkable leap from just 46% in 2016. However, behind it lies a more complex story about who digital financial services truly reach and how they do so.
Rwanda’s digital financial inclusion story is one of mobile money. The AFR FinScope 2024 report shows that the vast majority of adults now have access to mobile money services, while banks serve just 1.5% of adults. These mobile money platforms, not bank branches, brought most Rwandans into the financial system. The mobile money services are delivered through basic phones and SIM cards, primarily through providers, such as MTN Rwanda and Airtel Rwanda.
People are drawn to mobile money platforms above all by the need to pay businesses, especially for medical expenses, utilities, and airtime, which top the list. Rwanda’s national digital payment platform is eKash. It enables instant, interoperable transfers across banks and mobile money networks, which makes these everyday transactions seamless.
Government and regulatory action have amplified this momentum. The National Bank of Rwanda’s Payment System Strategy and Law No. 061/2021 mandated interoperability across providers. The Twagiye Kashiresi digital literacy campaign boosted merchant payment volumes, while the COVID-19 period served as an accelerant. Estimates indicate that 9% of Rwandan adults became first-time mobile money users during this period, with an additional 13% who increased their usage.
Yet, access is not the same as use, and use differs from transformation. Rwanda has built a remarkable platform, but the data shows that most people use it primarily for bill payments. The fuller potential of this platform includes digital wage receipts, safe savings, and loan repayment without a branch visit, which remain out of reach for most.
Only 15.4% of adults receive their income digitally. Most of those who do save formally keep their money in a mobile money account, yet informal channels still command a significant share of savings. For many people, especially those with low and unpredictable incomes, savings groups offer a more flexible, accessible, and trusted way to manage money. Village savings and loan associations (VSLAs) are groups that allow small, frequent contributions and quick access to funds when needed, and only 14% of borrowers repay loans digitally.
Rwandans use digital accounts for transactions, but not yet as tools for financial management. This is the access-usage gap, and it matters because the transformative potential of digital finance lies not in the payment itself, but in what the payment can unlock.
The 1.2 million adults who remain entirely excluded have a clear profile. Rural residents comprise 84.7% of this group, and women account for 61.2%. Half of the excluded are young, and 80% have not progressed beyond primary school. Casual workers and street vendors account for nearly half of this group at 44.9%, and most earn irregular incomes with no steady relationship with any financial institution.
The primary barrier is simple and concrete, as 68% of non-mobile money users cite a lack of cell phone ownership as the main reason for not using mobile money. It is not the complexity of service, high fees, or distrust of the system. The network infrastructure around many of these people already exists, with 69.6% of excluded adults living within reach of a reliable Global System for Mobile Communications (GSM) signal. The infrastructure is largely in place, but most excluded adults do not own a device.
Beyond devices, attitude plays a role. Many excluded adults prefer to deal with people rather than machines and prefer cash payments. These attitudes are not irrational preferences, as they reflect trust, habit, and the social fabric of informal financial life, but they are also addressable. 65.3% of excluded adults live within 1 km of a mobile money agent, which means the last mile is shorter and more solvable than it seems.
Exclusion also has a gender dimension, as two out of every three excluded adults are women. The gender gap in digital financial inclusion is present across all age groups and widens with age, which reflects deeper structural constraints. Lower phone ownership, less control over household income, and reduced exposure to formal financial services all play a role.
Kenya’s M-Pesa is the most-cited comparator for Rwanda. M-Pesa turned a payment tool into an economic lifeline in Kenya, with more than 34 million subscribers and 300,000 agent outlets. It enabled microloans, salary disbursement, and integration into government services. The lesson is that coverage and ecosystem depth determine how widely people use a platform.
India’s Aadhaar-enabled ecosystem offers a second model for Rwanda. India simplified the account-opening process and enabled direct benefit transfers at scale by linking biometric identity to financial access. Rwanda’s existing national ID infrastructure and eKash platform are natural foundations for a similar approach, particularly for the Umurenge SACCOs and cooperatives that remain only partially connected to the national payment switch.
Nigeria’s interoperability push shows how cross-platform connectivity expands trust and use among previously excluded populations. Rwanda’s eKash is already a move in this direction. Yet, full extension to savings and credit cooperative organizations (SACCOs) that serve rural communities remains an unfinished piece of the puzzle.
On the technology frontier, AI credit models can use mobile money transaction history to extend small loans to users without formal credit records. Rwanda’s planned CBDC pilots from 2026 offer an entry point to bring excluded populations into the digital system for the first time through transparent government-to-person payments. These tools shift the system from access to utility.
Rwanda’s digital financial inclusion journey has reached an inflection point. The groundwork is largely in place, with the mobile money built, agent networks expanded, and the near-universal access achieved in urban areas. The country should be proud of this next step that goes beyond technology to reach a point where digital financial services become genuinely useful and trusted. These services should reach the vegetable seller in the Southern Province, the rural woman without a phone, and the young casual worker who has never had a reason to go digital.
Affordable devices, liquid networks of well-trained agents in the most underserved zones, and products designed for irregular incomes rather than salaried employees alone must drive the next step. It means fee transparency, local-language interfaces, and patient community-level work to build digital confidence where cash remains the default.
The AFR FinScope 2024 report provides Rwanda’s policymakers, providers, and development partners with a precise map of where the gaps are and who carries them. Rwanda has solved access, and the next step will not be measured by the number of accounts opened, but by the lives changed.
This blog draws on findings from the AFR FinScope 2024 Digital Financial Services Thematic Report, published by Access to Finance Rwanda.
How have Uganda’s micro and small enterprises recovered, adapted, and grown after COVID-19?
The Resilience and Survivability Survey II explores this question through a longitudinal study that tracks the same businesses over time to better understand what drives their resilience, recovery, and long-term growth.
The survey builds on the 2023 baseline study to examine the impact of the Mastercard Foundation MSE Recovery Fund on financial access, business continuity, profitability, employment, and enterprise resilience among Uganda’s MSEs. It particularly emphasizes businesses led by women, youth, refugees, and PWDs.
The findings offer vital insights into the realities that businesses continue to face, from access to finance and informality to digital adoption, flexible financing, and business development support. It also highlights the strategies that have been helping enterprises survive and grow.
The study was developed under the Mastercard Foundation MSE Recovery Fund. The fund is implemented by Financial Sector Deepening (FSD) Uganda in collaboration with MSC (MicroSave Consulting), Asigma, and gnuGrid.
Read the full report here.
Building the rails for B2B digitization in Bangladesh’s retail supply chains
Part 1 of this series discussed how Bangladesh’s digital payments ecosystem works well at the retail counter but breaks along supply-chain payment routes. Digital money enters shops through QR-based transactions and interoperable transfers, yet it rarely travels further upstream to wholesalers, distributors, and manufacturers. It affects the growth of MSMEs in Bangladesh and the way it happens across emerging markets and developing economies (EMDEs) .
In cash-based supply chains, the confirmation of transactions is instant. Digital payments have not yet matched that certainty. Until they do, businesses will continue to reach for cash, and the supply chain will depend on informal, unrecorded transactions.
Digitizing B2B payments, therefore, changes more than payment methods. It changes how liquidity circulates, how credit is assessed, and how supply chains are managed. If upstream payments remain cash-based, four structural consequences follow.
1. Liquidity remains tied to physical movement rather than digital circulation
Retail distribution operates on daily working-capital cycles. Today, liquidity moves quickly within local cash-based routes, but that speed depends on physical handling, transport, and deposit. This limits how efficiently funds move across actors, locations, and financial institutions.
The risk is that cash is slow. As a result, payment speeds continue to depend on physical proximity rather than on real-time confirmation across the supply chain. Inventory release remains tied to where cash is located, not where digital liquidity could circulate instantly.
2. Supply-chain credit cannot scale without transaction visibility
If B2B payments remain cash-based, millions of businesses stay invisible to lenders. A retailer may purchase goods from the same distributor every week for years. Yet, without digital transaction histories, that relationship remains outside formal credit systems. Without verified purchase records, lenders cannot reliably assess how much a business earns, their repayment discipline, or inventory cycles.
As a result, lenders continue to exclude retailers and distributors from structured working-capital financing despite their active participation in the retail economy. Digital supply chain payments would make these commercial relationships visible and help develop inventory-linked lending and distributor-anchored credit models.
3. Inventory intelligence remains fragmented across supply chains
Cash-based transactions make reconciliation slow. Distributors and sales representatives report incidents inconsistently across networks. Manufacturers lack visibility into distributor-level offtake. Distributors manage fragmented ledgers across routes and outlets, while policymakers lack reliable insights into transaction flows across retail networks.
Without digital settlement trails, supply chains cannot generate the transaction intelligence required to forecast demand, manage inventory efficiently, or support evidence-based policy decisions to formalize the retail sector.
4. Cash-handling risk remains embedded in distribution operations
Across distribution routes, sales representatives and distributors handle large volumes of cash daily. Each step, including collection, transport, counting, deposit, and reconciliation, introduces operational risks and cost.
The lack of better digital payment solutions for upstream supply chains ultimately constrains the growth of MSMEs in Bangladesh. When digital money cannot flow from retailers to distributors to manufacturers, working capital stays trapped, formal credit remains out of reach, and millions of small businesses operate below their potential. Digital transformation must extend beyond the shop counter to drive inclusive economic growth.
The persistence of cash in upstream retail payments is not primarily a question of merchant awareness or consumer adoption. Bangladesh already has widespread QR infrastructure, strong mobile financial services usage, and expanding interoperability across providers.
Regulators and payment providers designed the existing pathways for person-to-business transactions, not for distributor-led inventory payment settlement across layered supply chains. Distribution networks depend on route-level confirmation, thin-margin settlement economics, and same-day liquidity cycles. Without payment systems that reflect these operational realities, digital tools cannot replace cash for inventory purchases.
Experience from other markets show that upstream digitization succeeds only when payment architecture is redesigned around supply-chain economics rather than consumer payment behavior. Bangladesh alone does not face breaks in supply chains. Across emerging markets, consumer payments digitized quickly while B2B flows remained cash-dependent due to liquidity timing, reconciliation gaps, misaligned merchant discount rate (MDR) structures, and sales-representative-driven workflows.
These markets overcame these constraints through ordering, delivery, and settlement systems rather than treating payments as a separate layer.
So, what will it take to digitize B2B payments in Bangladesh? Global experience shows that B2B digitization succeeds only when payment architecture reflects the realities of supply chains. For Bangladesh, five design principles emerge clearly.
- Instant settlement as the foundation, not a feature: Distributor liquidity cycles operate daily. If settlement is delayed or uncertain, inventory release slows immediately. B2B payments require guaranteed real-time settlement aligned with inventory movement rather than end-of-day confirmation cycles.
- MDR and pricing rules aligned with distributor margins: Consumer-grade MDR levels do not match wholesale distribution economics. As seen in Brazil’s Pix model, zero or near-zero MDR enabled B2B payments to scale rapidly across thin-margin supply chains. Pricing frameworks for B2B transactions must reflect the operating margins of distributors, which MSC’s research shows are often only 1–2%. This can be achieved through tiered pricing structures, capped transaction fees, or near-zero cost transfers for high-value supply chain payments.
- Reconciliation must be embedded within distribution workflows: B2B payments function reliably only when ordering, delivery, and settlement confirmation are synchronized. Payment confirmation must be visible to retailers, sales representatives, distributors, and manufacturers simultaneously. Dispute-resolution mechanisms must link directly to digital invoices and the delivery of receipts.
- Digital funds must remain usable across supply-chain tiers, not trapped within merchant collection channels: When a retailer pays a distributor digitally, the distributor must be able to reuse those same funds immediately for upstream purchases from manufacturers or suppliers. Today, most digital collection tools do not support seamless onward circulation across supply-chain relationships. Without this ability to reuse incoming digital liquidity across tiers, payment systems cannot support continuous digital settlement along distribution routes.
- Incentives must support upstream liquidity circulation: Supply chains depend on the predictable availability of liquidity. If distributors cannot reuse incoming digital funds immediately for upstream purchases, they revert to cash. Settlement certainty must be combined with liquidity-assurance mechanisms that support continuous digital circulation across supply-chain tiers.
Bangladesh has successfully digitized how consumers pay in shops, but not the movement that keeps supply chains running. Upstream flows remain cash-driven because existing payment pathways were never designed for high-value, time-sensitive distribution networks. The next step, therefore, is to enable digital liquidity to move across the supply chain with the same certainty as cash. Bangladesh does not need more digital touchpoints. It needs digital money that can move with the same reliability as the goods it pays for.
Why Bangladesh’s supply chains still run on cash despite digitization
A retail shopkeeper in Manikganj, Rubel single-handedly handles sales, ledger updates, and cash counting. He sells packaged foods, beverages, and household essentials, such as lentils, rice, and soybean oil. While he owns a Bangla QR from a mobile finance service (MFS) provider and understands merchant payments through this channel, he rarely uses it to receive payments from customers. The reason, though, is practical.
After Rubel receives a digital payment, he must withdraw the funds from a nearby agent and incur both merchant discount rate (MDR) charges and agent fees. Why is this so? Because the wholesalers and distributors who restock his shop demand cash instead of digital funds, which otherwise could be transferred to their accounts. As a result, even when customers pay digitally, Rubel must use cash to stay in business.
This experience is not unique to Rubel. Across Bangladesh’s 7.8 million small and medium retailers, digital payments often enter shops and businesses but cannot circulate through the supply chain. The issue is not whether retailers accept digital payments, but whether they can use digital money to restock inventory. Currently, most retailers cannot use digital money for restocking.
Bangladesh has been actively advancing the digitization of payments at retail points of sale. However, the broader digitization of liquidity flows across the supply chain has yet to begin.
Wholesale and retail trade contribute nearly USD 160 billion (BDT 17.4 trillion) across the sector in 2025. Every retail transaction triggers a chain of upstream payments: Retailer to wholesaler, wholesaler to distributor, and distributor to manufacturer. These payment cycles keep essential goods flowing daily across the country.
MSC (MicroSave Consulting) conducted a long-term study of merchant digital payments to understand how they function in practice. The study highlights two critical findings:
- It shows that only a small share of payment flows, nearly 10% beyond the retail counter, remain digital once transactions move upstream into distributor and wholesaler payments.
- It reveals that around 37% of retailers avoid digital payments not because they prefer cash, but because their own suppliers, such as distributors and wholesalers, require cash settlement.
This pattern reflects a structural mismatch between how digital payment tools are designed and how retail supply chains actually function.
Bangladesh has made visible progress in the digitization of payments at the retail counter. Interoperable QR acceptance has expanded, mobile wallets have seen wide use, and consumers are increasingly comfortable with digital payments in everyday transactions. Digital payments are becoming part of routine commercial activity at the point of sale. However, payment flows change once they move beyond the retail counter to wholesalers and distributors.
Cash dominates payments in Bangladesh’s retail value chains despite the availability of interoperable payment tools, such as Bangla QR and the inter-FSP fund transfer system. More than 9 million microentrepreneurs, from fast-moving consumer goods (FMCG) shops to pharmacies and agri-business retailers, contribute roughly 25% to the nation’s GDP and drive significant economic activity. Yet most transactions between retailers, wholesalers, dealers, distributors, and producers still occur in cash. The challenge is not the absence of digital infrastructure. It is that existing payment pathways were designed primarily for people-to-business transactions (P2B), not for business-to-business (B2B) ones.
Digital money stops at the shop counter because existing payment tools are not designed to serve upstream business requirements. Consumer-grade payment tools were designed primarily to help businesses receive payments from customers. When these same tools are used for inventory purchases across supply chains, they fail to match the liquidity timing, pricing realities, and confirmation requirements of distribution networks. The following three operational barriers explain why digital money often stops at the shop counter instead of moving upstream.
Barrier 1: The retailer’s trap, money goes in, but cannot move upstream
When a customer pays retailers like Rubel digitally, the funds are received in the retailer’s mobile wallet. Rubel’s wallet could be a personal MFS account, such as bKash, Nagad, or Rocket, or a dedicated merchant wallet offered by the provider. In both cases, the funds cannot be easily forwarded to upstream suppliers for inventory restocking. However, the retailer cannot easily use those same digital funds to pay suppliers.
Most digital payment products, such as merchant wallets and QR-based collections are designed primarily to receive customer payments. While options, such as bank transfers or QR payments technically exist, they lack features essential for routine B2B use that include bulk transfers and seamless onward payments. As a result, funds become trapped. The retailer who receives a digital payment from a customer cannot easily forward those funds to wholesalers or distributors and are forced to cash-out.
Barrier 2: The distributor’s math, fees that work for shops do not work for bulk
A typical shopkeeper, such as Rubel, might make a profit of BDT 5 (USD 0.041) to BDT 10 (USD 0.081) for every BDT 100 (USD 0.81) of goods sold. A distributor, who moves goods in bulk, often makes only BDT 1 (USD 0.0081) to BDT 2 (USD 0.016) for every BDT 100 (USD 0.81) of goods sold. Digital payment fees, that is, merchant discount rates (MDR), are usually around 1%. For retailers, this fee is deducted from the payment they receive, but their profit margin is wide enough to absorb the cost. Yet for a distributor, the same 1% fee is deducted from the payments they receive from retailers. Since their margin is only 1% to 2%, this fee consumes half or more of their profit. As a result, even if the technology worked perfectly, economics would still block the adoption of digital payments upstream.
Barrier 3: The confirmation gap, which the distributors cannot afford to wait or wonder
When distributors hand over goods to retailers or wholesalers, they need immediate confirmation that payment has been received and matched to a specific order. Cash provides instant confirmation of payment. Existing digital payment tools cannot yet provide the order-linked confirmation and reconciliation that certain distributors require to release inventory confidently. These tools also do not support the partial-payment structures that are common in B2B transactions. As a result, distributors continue to rely on cash as it remains the only payment instrument that reliably matches inventory release with settlement confirmation.
These operational barriers are closely linked to how retail distribution networks function. Retail supply chains operate through layered relationships that connect retailers, wholesalers, dealers, sub-distributors, distributors, and manufacturers. Sales representatives (SRs) play a critical role in the delivery of goods, collection of payments, and confirmation of settlement across these networks.
Distribution routes depend on route-level confirmation and same-day liquidity availability, which makes the certainty of payment essential for inventory movement or management. Consumers increasingly use mobile wallets and banking apps for payments. However, transactions within upstream relationships remain overwhelmingly cash-based, as existing digital tools do not yet match the liquidity timing, confirmation certainty, and reconciliation needs of distribution networks.
The three operational barriers described are deeply embedded in the policy rules, provider systems, and merchant incentives that shape Bangladesh’s digital payments ecosystem for its vast number of micro, small, and medium enterprises (MSMEs).
- At the macro level, which covers policy, pricing, and rails: The same MDR misalignment and lack of instant settlement make digital payments economically unviable for distributors and break daily liquidity cycles.
- At the meso level, which covers provider systems and operations: The absence of batch payments, multi‑user access, and SR‑level reconciliation means distribution networks cannot replace cash‑based workflows.
- At the micro level, which covers merchant incentives and behavior: Retailers perceive digital balances trapped, as upstream actors demand cash, and settlement uncertainty discourages retaining digital value for inventory purchases.
Together, these reflections show that upstream payments remain cash‑based. The issue is not the unavailability of digital tools. Rather, the problem stems from the ecosystem, where policies, providers, and merchants remain focused on consumer-facing payments rather than supply‑chain settlement.
Bangladesh has successfully digitized customer payments at the counter. It has not yet been digitized how that money moves through the supply chain, from retailer to wholesaler to distributor to manufacturer. Until digital money can move upstream with the same speed, certainty, and reconciliation as cash, B2B payments will remain outside the country’s digital payment ecosystem.
Understanding this structural gap is the first step. Part 2 explores what this means for liquidity circulation, credit visibility, and the depth of Bangladesh’s digital transformation. Read the next part here.
Who is responsible? Closing the accountability gap in financial fraud prevention
Financial fraud is a systemic problem being addressed by individual solutions. Across most markets, the response to a scam victim is to report it to the bank, file a police complaint, submit evidence to a regulator, and hope. Meanwhile, the fraud operation that targeted that victim is already processing the next call, the next transfer, and the next cash-out.
Fraud ecosystems have been deliberately engineered to move faster than the institutions designed to stop them. Banks and regulators need to move beyond better awareness campaigns or faster forms of grievance management to close this gap. It requires a fundamental redesign of accountability and understanding of who is responsible for what and when in the transaction chain.
The blind spots across the ecosystem
The accountability gap is not located in a single institution. Rather, it runs across the entire ecosystem, where each actor’s blind spot enables the next fraud.
Banks are positioned closest to the transaction, which should make them the most effective line of defense. Yet most fraud detection systems are calibrated to identify unauthorized transactions, such as credential theft, account takeover, and card skimming. Authorized push payment (APP) fraud is another type of fraud in a completely different category, where the victim is manipulated into initiating a payment themselves. APP bypasses most conventional controls. MSC’s Mind the Gap report found that more than 60% of fraud victims across India, Bangladesh, and Kenya did not know what grievance mechanisms existed. 48% of victims who attempted to report were dismissed for their inability to furnish evidence.
Existing grievance resolution systems are largely designed around what the institution needs and not what the victim can provide. MSC’s consumer protection research in India has consistently documented this gap across the financial services lifecycle. We have traced the cycle from transparency of product terms at onboarding, to the accessibility of recourse channels post-harm. Our customer protection in the Indian digital financial services series mapped specific failure points related to recourse and transparency that leave customers without an effective remedy when things go wrong.
In India specifically, the Prevention of Money Laundering Act (PMLA) creates a structural paralysis, as banks cannot freeze suspected mule accounts without authorization from the court or law enforcement. This creates a legally mandated delay that fraudsters systematically exploit. The IBA Working Group has proposed that banks be granted enhanced authority to place temporary holds on suspected mule accounts before formal orders arrive, which is a necessary regulatory design reform that remains pending.
Fraud is also rampant in the telecom sector. Caller ID spoofing, SIM swaps, and the leasing of backend numbers to route fraudulent calls are all examples of vulnerabilities at the telecom layer. The UK’s Ofcom interventions show that these are solvable. Regulators can impose mandatory blocking of international calls that fake domestic numbers, block invalid caller IDs, and ban leasing backend numbers used to hijack calls. Although these are technical controls with measurable impact, most jurisdictions have not implemented them.
Digital platforms, such as social media, messaging apps, and digital marketplaces, are another source of most scams. Yet, platform accountability for fraud from their infrastructure remains largely voluntary. Recorded Future’s 2024 Payment Fraud Report identified nearly 1,200 scam domains linked to fraudulent merchant accounts and nearly 11,000 e-commerce domains infected by Magecart skimmers. This is a threefold increase from 2023. Takedown times for fraudulent pages are measured in days, while scam operations are measured in hours.
MSC’s Building trust through design report adds another perspective. Deceptive interface design, which comprises manipulative consent flows, hidden fees, and guilt-tripping prompts, erodes user agency and creates conditions for external fraud to thrive. Regulatory accountability must extend to the design layer, not only to obviously illegal content.
Even where consumers know how to report, the system often fails them. MSC’s TRUST framework identifies the precise dimensions in which most grievance systems fail. Transparency suffers when consumers do not understand the terms they agreed to. Consumers lose recourse when complaint channels close, require multiple steps, or operate in a language they do not speak. They face information asymmetry at every point, which undermines their ability to understand what happened. Security investments fall behind. And once fraud occurs, timeliness matters most, yet procedural compliance systematically sacrifices it.
What effective accountability looks like
Three jurisdictions have moved furthest towards a systemic accountability model. Their approaches converge on the common principle that fraud prevention is a shared responsibility across the transaction chain, not a consumer obligation.
Since October 2024, payment service providers in the UK must reimburse APP fraud victims more than USD 100,000, with costs split between sending and receiving banks. The one-year assessment showed that reimbursement alone is insufficient, as it simply compensates victims but fails to break the criminal business model. The more impactful interventions have been at the telecom layer, such as caller ID blocks, filters for invalid numbers, and requirements for operators to verify business customers.
In Australia, the Scams Prevention Framework was passed in early 2025. It requires banks, telcos, and digital platforms to implement defined controls or bear liability for losses, with penalties of more than USD 35 million or 30% of turnover during the breach period. It includes digital platforms as designated entities and becomes the first framework to formally extend accountability to the channels where scams originate.
Singapore’s Shared Responsibility Framework, effective December 2024, allocates liability in a defined sequence. In it, liability falls first on the financial institution, then on the telecom operator, and finally on the consumer. This can occur only if both institutions have fulfilled their obligations. This waterfall model establishes clear, predictable accountability for each actor and upholds the principle that consumers should not bear losses when institutions have failed in their duties.
What behaviorally informed prevention actually requires
Accountability frameworks set the incentive structure. But institutions and regulators must make different design decisions to build the actual prevention architecture.
- Contextual friction, not generic warnings: Transaction-level interventions, such as cooling-off periods for high-risk payments, purpose prompts, and real-time behavioral flags, are demonstrably more effective than warning messages delivered at onboarding. India’s NPCI removed P2P UPI collect requests, a concrete example of friction designed into the system.
- Cross-institutional intelligence sharing: Mule account registries, cross-bank fraud signals, and real-time data sharing between banks, telcos, and platforms turn individual detection into network-level prevention. India’s MuleHunter.AI at the RBI Innovation Hub is an early example of this direction.
- SupTech and RegTech investment: MSC’s SupTech data maturity framework finds that one-third of regulators still rely on manual submissions, and fewer than 10% of smaller jurisdictions have full data standardization. The limiting factor is data quality. Many authorities validate data manually. Regulators cannot supervise what they cannot measure. Fraud cannot be detected if reporting systems lag transactions by weeks.
- Capability-building as a regulatory obligation: Financial literacy must shift from a CSR activity to a mandatory, measurable output. To address this, MSC’s PTE Framework offers a practical model for how phygital capability delivery driven by teachable moments can be designed, contextualized, and evaluated across diverse user segments.
- Victim-centered grievance design: Regulators can use the MSC TRUST framework to redesign grievance resolution systems to build solutions from the victim’s perspective. These should be accessible in local languages, multi-channel, credible, and be able to initiate protective holds without a court order.
The way forward
Fraud today is institutionally tolerated due to design fragmentation: Banks are responsible for transactions, telcos are responsible for calls, platforms are responsible for content, and regulators are responsible for their own sectors. In the space between those silos, fraud operations run freely.
The evidence from the UK, Australia, and Singapore, and from MSC’s field research across Asia, Africa, and the Pacific, proves that institutions must design protection into the transaction rather than just bolt it on. It also requires a grievance management system built for the person who has just been deceived, not for the institution that manages its liability.
The fraud supply chain is end-to-end, and the protection system that counters it must reflect this reality.
This is Blog 3 of a three-part MSC series on fraud supply chains. Blog 1 examined why ordinary people fall for fraud. Blog 2 examined how fraud operations are industrialized and monetized.