Quick Win No. 3
Adopt a commitment to promote financial inclusion and to endorse internationally accepted payment standards to enable greater interoperability.
The adoption of electronic payments has been accelerated by the COVID-19 pandemic. According to the latest Global Findex, two-thirds of adults worldwide now make or receive electronic payments, with the share in developing economies having grown from 35% in 2014 to 57% in 2021. While 55% of online shoppers have purchased from another country in a 12-month period, close to 40% of merchants consider accepting and processing foreign transactions an obstacle in conducting e-commerce. Ensuring affordable and efficient electronic payments is important to build an inclusive digital economy and for facilitating international trade.
Limitations in financial inclusion and payments interoperability are the top two obstacles that make payments less affordable and more inefficient. At the global level, improving financial inclusion and payments interoperability are key goals of the G20 as part of their joint effort to improve cross border payments, together with the IMF, World Bank and Financial Stability Board.
During the COVID-19 pandemic, several governments partnered with industry – payment networks, banks, local merchants – to leverage electronic payments to improve financial inclusion. Countries such as Peru, Guatemala and the Dominican Republic delivered critical social disbursements to unbanked citizens using just their national ID numbers or mobile credentials. Countries such as Papua New Guinea pushed for digital transformation of the government payments collection process, which in turn accelerated electronic payment acceptance for other countries. At the regional level, the World Economic Forum together with the International Development Bank built a regional multi-stakeholder community to accelerate electronic payments in Latin America and the Caribbean, focusing specifically on growing them to improve financial inclusion and to facilitate trade and economic activities. A key component of this work is to encourage the public and private sector to collaborate to create inclusive and sustainable solutions that meet individual and business needs.
When it comes to examples for promoting payments interoperability, Singapore is the champion, tackling the interoperability challenges on multiple fronts. It has entered into Fintech collaboration agreements with over 30 countries to facilitate information sharing and regulatory coordination. It has also initiated various digital economy agreements with specific provisions committing to fostering the adoption and use of internationally accepted standards, promoting interoperability and interlinkage of payment infrastructures. Furthermore, Singapore is in the process of linking real-time payment systems with Thailand, India, Philippines, and Malaysia to promote regional economic integration.
With e-commerce constituting at least 30% of global GDP according to the United Nations Conference on Trade and Development (UNCTAD), improving the status of electronic payments is crucial for job creation and economic prosperity. The WTO is in the best position to align all countries to commit to financial inclusion through public and private collaboration and to endorse internationally acceptable standards for relevant payment methods for more interoperability and better trade.