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Real-time retail payments systems or faster payments: A quick framework for decision making
Journal of Payments Strategy & Systems,
10
(3),
267-278
(2016)
Abstract
Faster payments, or real-time retail payments implementations, are currently gaining momentum, with a number of countries looking at implementing such a solution to augment the choice of payment instruments for customers. This paper looks at existing real-time retail payments by scanning the literature, and identifies real-time retail payment systems (RTRPS) in operation, discusses some of their attributes, establishes through data and analysis that it is the income level that has a good correlation with the number of cashless per capita transactions per year in a country and not necessarily the population levels, although population levels do determine the maximum possible cashless transactions in a country. Thereafter, in order to help countries (particularly developing countries) facilitate discussions and decision making on RTRPS implementation, a simple framework based on the population and adoption levels of cashless payments in the country, an index for RTRPS readiness, is constructed. Some options that countries could consider for such implementation are also discussed.
Keywords: faster payments; real time retail payments; framework for real time retail payments; RTRPS readiness index; relationship between per capita GDP and per capita cashless transactions
The full article is available to subscribers to the journal.
Author's Biography
Mahadevan Balakrishnan is currently with the Payment System Development Group, World Bank, helping multiple developing nations improve their financial market infrastructure. Prior to that he was Chief Operating Officer of the National Payments Corporation of India (NPCI), responsible for Business, Operations and Technology. In that role he was involved in the creation of multiple retail payment infrastructures for the country, covering NFS ATM Network, the Immediate Payment System (IMPS), ACH, cheque truncation systems, the automation of 1000+ clearing houses in India with a standard solution, AADHAAR-based payment ecosystems for direct benefit transfer schemes, and the RUPAY domestic cards scheme, thus helping NPCI deliver its vision of simple, easy, convenient and cost-effective retail payment systems for all Indians. The systems he helped create in India facilitated the PMJDY financial inclusion schemes and the Direct Benefits Transfer to Bank Accounts schemes, saving India billions of Rupees. He has over 25 years of banking/technology leadership/ management experience with leading banks such as ABN AMRO Bank, Barclays and Citibank, and he was also involved in the implementation of some of the payment systems for these banks. He is a postgraduate in Business Administration (MBA) and in Bank Management (MBM), and has a Doctorate (PhD) in Financial Management/Payments. He has published several papers relating to payment systems in national and international journals.
