The purpose of this working paper is to set out the key components and stakeholders in a digital payments ecosystem (DPE); to show how inclusive DPEs are vital in the transition from cash to digital payments; and to describe the key conditions for successfully building an inclusive DPE.
A digital payments ecosystem is achieved when all participants are connected in an electronic payments network based on shared and open standards, and is used by government, businesses and consumers to buy and sell physical and digital goods and services and make transfers. It enables its stakeholders to interact to the benefit of all, while simultaneously enabling its commercial participants to create economic value and deliver inclusive and responsible financial services to end users. While there are common elements to a DPE, each market context is different and, as a result each digital payments ecosystem will have its own particular elements and set of stakeholders.
The transition from cash to digital payments is gathering momentum around the world as more countries, particularly in the developing world, commit themselves to making the shift. The Better Than Cash Alliance and other organizations supporting this transition are assisting the process through fieldwork and research supported by expert analysis.
Because the conditions prevailing in each country vary so widely across the world, there is still much to learn. This working paper reflects the best current insights into those factors that have the potential to support or hinder the transition to digital payments.
This paper was developed for Better Than Cash Alliance members and other audiences seeking to better understand DPEs. It aims to contribute to the knowledge about DPEs and their role in enabling digital payments as a means of reducing costs, improving transparency, increasing financial inclusion, and driving growth.