Payment services and the digital future
Kristalina Georgieva, Managing director of the International Monetary Fund (IMF) describes the Technology Industry as one of the bright spots during 2020 because it has allowed us to keep working, providing and receiving services during the lockdown, and it has changed our ways of working, interacting, and living our daily lives“. In her speech, the IMF Managing director also describes the four cornerstones in which the digital future should be built in order to “ensure that payments evolve to meet user needs while remaining safe and resilient“.
Technology Industry has shown us the potential of the digital future during 2020, particularly during the Covid-19 lockdowns. According to Kristalina Georgieva, this digital future should be based in four cornerstones to “foster a financial sector and international monetary system that are efficient and trusted, equitable and inclusive, and still dynamic”:
- Private-sector innovation: Innovation must be led by private sector to better identify people and business needs. However it is essential to ensure risks taken by the private sector “are not translated into risks to end-users or the financial system” and avoid generating “monopoly power, or underserving vulnerable people”.
- Public-sector involvement to provide verifiable digital ID, communications infrastructure, central bank money, and other necessities. On this point the IMF Managing director strongly encourages investment in infrastructure as “nearly half the world’s people are not online”.
She also explains the role of the central bank digital money in the future: The ability to convert the digital money from different providers into local currency on demand is a key metric of stability” in the digital future.
- A robust regulatory and legal frameworks: In order to ensure a level playing field, regulation should be based on activity: “same activity, same risks, same rules”.
- International cooperation to facilitate international payments reducing its final price to consumers and to manage potential spillover effects as “digital money becomes more widespread”.