Leading Digital Money Markets: A Global Payments Tour

Videos Readings Key terms Week 1: Roadmaps for the journey Pack your bags! Course overview The fintech stack Ignacio Mas, “Mapping the DFS Ecosystem with a • Protocol stack Fintech Stack,” Briefing Paper for the Catalyst Fund • OSI layer model for (available here). communications industries Tracking progress in financial Asli Demirguc-Kunt et al, “The Global Findex • Country ratings: EIU, Brookings, inclusion database 2017: Measuring financial inclusion Citi/ICL around the world,” World Bank Policy Research • AFI & Maya Declarations Working Paper No. 7255 (available here). • User surveys: Findex, Finscope • Bank survey: IMF FAS Reflections on countries´ digital Bhaskar Chakravorti & RS Chaturvedi, “Digital Planet readiness 2017,” The Fletcher School, July 2017 (available here). OPTIONAL: Reflections on the United Nations, “17 goals to transform our world” Sustainable Development (available here). Goals Weeks 2: The rise of over-the-top superplatforms: China Chinese DFS in perspective The Economist ,"The age of the appacus: in fintech, • China’s DFS growth in China shows the way," 25 February 2017 (available perspective here). • BAT-J, Yu’ebao The Chinese financial sector Elliott & Yan, “The Chinese Financial System,” John L. • Role of banking system and its evolution Thornton China Center at Brookings,” 2013 • Shadow banking (available here). Chinese fintech: who are the Ngai et al., “Disruption and Connection: Cracking • Internet finance innovators and what are their the Myths of China Internet Finance Innovation” • P2P lenders business models? McKinsey Greater China FIG Practice, July 2016 • WeChat, JD Group, Creditease, (available here). Yirendai Fintech and techfin business Lin Wanxia, “Instead of fintech, Alibaba affiliate • Ant Financial models and approaches wants to go 'techfin'” 24 March 2017 (available

here). OPTIONAL: Expert Valentova, Emilie, “Yu’e Bao turned 185m e- Interview: Prof. Long Chen, commerce customers into financial CSO of Ant Financial investors,” Harvard Business Review, September 2015 (available here). OPTIONAL: Expert Rao, Leena, "Chinese E-commerce Giant JD.com Interview: Lin Jin, VP Strategy Raises $1 Billion For Finance Unit", Fortune and Research, JD Group Magazine January 2016 (available here). Weeks 3: The rise of over-the-top superplatforms: China (cont´d) Financial regulatory landscape Elliott & Yu, “Shadow Banking in China,” Brookings- • CBIRC, PBOC, CSRC in China Tsinghua Center, March 2015 (available here). Regulating fintech in China Zhou, Weihuan and Arner, Douglas W. and Buckley, • Social credit scoring Ross P., ”Regulation of Digital Financial Services in • 2015 Guidelines on internet China: Last Mover Advantage” (September, 2015). finance 8(1) Tsinghua China Law Review 25-62 (available here). Policies to promote financial World Bank Group & People's Bank of China. Toward • National policies on financial inclusion and cashless society Universal Financial Inclusion in China: Models, inclusion Challenges, and Global Lessons. 2018. World Bank, • Tiandong model Washington, DC, pages 69-82 (available here). • Digital fiat currency (DFC) What have we learned about Zennon Kapron & Michelle Meertens “Social and from China? Networks, e-Commerce Platforms, and the Growth of Digital Payment Ecosystems in China: What It Means for Other Countries”, BTCA Case study 2017, pages 4-13 (available here). Faculty lounge discussion: The rise of over-the-top superplatforms: China Week 4: How the global internet majors are playing the field: the US & beyond The device players: Apple & Robert Hof, “: A clever combination of • Device capabilities: secure Samsung technologies makes it faster and more secure to element, TouchID, NFC buy things with a wave of your phone,” MIT • Tokenization, Token Service Technology Review, 2015 (available here). Provider

• ApplePay, The social media players: John Caliaham, “How to use Android Pay – What is • Chatbots on instant messaging Facebook & Google it, what banks support it?” 20 Sep 2017 (available platforms here). • Host Card Emulation • Google Wallet, Android Pay The retailers: Amazon, Uber, CBInsights, “Everything You Need To Know About • Walmart Pay, Starbucks & Walmart What Amazon Is Doing In Financial Services,” April • QR codes 2018 (available here) Third-party merchant Brad Weimert, “Getting Paid: How to Choose • Chargebacks & risks payments: PayPal, Square & Between PayPal vs vs Merchant Accounts,” 8 • Merchant account aggregator, Stripe January 8 2015 (available here). payment gateway, payment processor • PayPal Working Capital, Square card reader, Stripe Atlas portal Faculty lounge discussion: How the global internet majors are playing the field: the US & beyond Weeks 5: Architecting a digital money grid from the ground up: India Digital identity & Aadhaar UIDAI, “Aadhaar: Dynamics of Digital Identity” • Aadhaar, UID, UIDAI (available here). • Embedded services: AePS, microATM Interbank infrastructure & IMPS RBI, “Payment and Settlement Systems” (available • Institutions: RBI, NPCI here). • Infrastructures: RTGS, RuPay, IMPS, NACH Payment interfaces & UPI A Varghese, “Unified Payments Interface / UPI, • APIs & UPI India; An Introduction; Plain and Simple,” Medium • Virtual payment address blog, 23 March 2016 (available here). Other aggregation & • APB, BBPS, NUUP standardization initiatives • E-sign, digital lockers OPTIONAL: M Sharma & S InterMedia, “Quicksights Report: FII Tracker Survey,” Aggarwal on the informal January 2016 (available here).

financial lives of the poor

Weeks 6: Architecting a digital money grid from the ground up: India (cont´d) Connecting people: JAM & Department of Financial Services, Ministry of • JAM trinity: phone, account, ID PMJDY Finance, “Pradhan Mantri Jan-Dhan Yojana: A numbers National Mission on Financial Inclusion” (available • PMJDY, Bank Mitr here). G2P payments A Pathak and L Singh, “G2P Payments: Concerted • Distributing cash & Efforts Will be the Key,” MicroSave India Focus Note commodities: G2P, DBT, PDS #124, November 2015 (available here). Service providers: Land grab & Boston Consulting Group (BCG) and Google, • PPIs, Payment & Small Finance beyond “Digital Payments 2020: The Making of a $500 Billion Banks Ecosystem in India” (available here). The India Stack iSPIRT, “IndiaStack: Towards Presence-less, Paperless, • IndiaStack, APIs, federated and Cashless Service Delivery,” slideshow databases presentation (available here). Faculty lounge discussion: Architecting a digital money grid from the ground up: India OPTIONAL: N Nilekani & S Jain B Goenka et al, “2016 iSPIRT Annual Letter” on the IndiaStack (available here). V Krishna, “Nandan Nilekani has a BILLION likes in India, what’s next for him?” an interview in YourStory, 13 April 2016 (available here). Week 7: Independent study week OPTIONAL: Time traveller´s view Douglas W. Arner, Jànos Barberis and Ross P. of fintech Buckley (2016). “The Evolution of FinTech: A New Post-Crisis Paradigm?” Georgetown Journal of International Law, Vol. 47, available here. Week 8: More integrated, more competitive, more private: European policy initiatives SEPA 1: Payments integration & European Central Bank, “SEPA: An integrated retail • Goals: single market harmonization in Europe payment market,” 2009 (available here).

• Governance: EU, ERPB, EPC, ECB, PSD • Standards: IBAN, EMV, ISO20022 • Instruments: credit transfer, direct debit, card payment SEPA 2: Stepping up Anne Boden, “Explaining PSD2 without TLAs is • SEPA instant payments competition and innovation tough!” Starling Bank, 9 October 2015 (available • E-invoicing, e-reconciliations through PSD2 here). • XS2A: APIs, PISPs, AISPs Privacy by design “GDPR key changes,” eugdpr.org (available here). • GDPR • Data protection & privacy Sweden, a North Star “, the secret Swedish FinTech payment • Peak cash company,” Medium.com, 8 Jan 2017 (available • Svish here). • BankID Faculty lounge discussion: More integrated, more competitive, more private: European policy initiatives Week 9: Africa: Telco’s take center stage The African mobile money Mckinsey “Mobile Money in Emerging Markets: The • Mobile money deployments landscape: Where is it business case for financial inclusion”, 2018 (available • Active vs. registered users happening? here). • Sprinters • Enabling regulation The archetypal model: The GSMA, "The impact of mobile money interoperability • Archetypal model case of Tigo Pesa in Tanzania," September 2016 (available here). • Distribution structure • Advanced financial services • Interoperability Challenges and opportunities Media Intelligence, "Assessing the Active Use of • Ecosystem for African MNOs in evolving Mobile Money services in Cameroon," 2015 • APIs, OTT the model (available here). • Closed-loop & open-loop systems Regional integration: The SADC Elizabeth McQuerry & Cici Northup, “Regional • SADC, SIRESS Integrated Regional Electronic Payments Integration, Financial Inclusion, and • Cross-border payments,

Settlement System Remittances in the Southern African Development regional switches Community (SADC): Reflections on a Work in Progress” 2017 (available here). Week 10: From Africa to Asia: Agents take center stage An African MMO agent Jungwon Byun, "Zoona: A Case Study on Third Party • Agent networks network story: The case Innovation in Digital Finance," prepared by FSD • Crowd funding for SMEs of Zoona Zambia, August 2015 (available here). • Over-the-counter • Liquidity management

Using OTC to build scale: Yasmina McCarthy and Roar Bjaerum, “Easypaisa: • Hawala money transfer The EasyPaisa story Mobile Money Innovation in Pakistan,” prepared by • Branchless banking in Pakistan GSMA, Mobile Money for the Unbanked, July 2013 • Walk-in transaction (available here). • OTC vs self-service • One-time transactional services vs. stored-value account • Biometric devices A non-deliberate approach to Jaheed Parvez, Ariful Islam and Josh Woodard, • Direct cash-in / cash-out OTC: The case of bKash in “Mobile Financial Services, Regulations & Usage in • Informal OTC Bangladesh Select USAID Projects,” prepared for USAID, April • Techno phobia 2015 (available here). • Financial transaction phobia OTC: A necessary step or Mike McCaffrey, Graham Wright and Anup Singh, • Face to face transactions AT missed opportunity and ”OTC: A Digital Stepping Stone or a Dead-end • Personal transactional scenarios for evolving out of it Path,” prepared by MicroSave, 2016 information (available here). • Telco agnostic • Shifter use case • Interest bearing wallet • Multiple SIM syndrome Faculty lounge discussion: Africa: Telco’s take center stage & From Africa to Asia: Agents take center stage

Week 11: Building inclusive & interoperable systems from scratch: Rwanda, Peru & Jordan The principles and architecture Bill & Melinda Gates Foundation, “The Level One • LevelOne Project of an inclusive and Project Guide: Designing a New System for Financial • Principles of Inclusive and interoperable payment system Inclusion,” 2015 (available here). Interoperable Payment Systems • Architecture components: Rules, Rails, Accounts and Applications Evolving from mobile money to Allison Spector, Helen Mant, “The Business of • Public-private partnerships merchant payments: mVISA in Financial Inclusion in Rwanda: Lessons from • On-behalf Rwanda Visa’s transformational public-private partnership in • Payments infrastructure Rwanda”, IGD, 2013. (available here). • Merchant payments • QR code payments Driven by industry: Peru’s BIM Pablo Antón Díaz and Tomás Conde, “Modelo Peru • Modelo Peru, BIM Unique Model, Unique Challenges, Bright Future,” • Cross industry collaboration Institute of International Finance and Center for • Shared infrastructure Financial Inclusion, 2017 (available here). • Common acceptance marks Driven by government: Claire Scharwatt and Anant Nautiya, “The long road • Non-bank financial Jordan´s JoMoPay to interoperability in Jordan. Lessons for the wider institutions industry,” GSMA, 2016 (available here). • Centralized fraud management and detection • Financial literacy • Big data Week 12: Summary & implications Stacking up the innovations Reread: Ignacio Mas, “Mapping the DFS Ecosystem • (Review of fintech stack from with a Fintech Stack,” Briefing Paper for the Catalyst week 1) Fund (available here). A horizontalizing industry Clayton Christensen et al, “What Is Disruptive • Vertical vs. horizontal Innovation?”, Harvard Business Review, Dec. 2015 integration (available here). • Scale through specialization • Driving industry change

International standard setting Timothy Lyman et al, “Global Standard-Setting • ISO, EMV, PCI DSS Bodies and Financial Inclusion for the Poor: Toward Proportionate Standards and Guidance,” White Paper Prepared by CGAP on Behalf of the G20 Global Partnership for Financial Inclusion, October 2011 (available here). Implications for policy makers Patrick Jenkins, “We don’t take cash’: is this the • Sequencing changes & providers future of money?”, FT Magazine, 10 May 2018 • Unbundling the layers (available here). • Race to 0 fee payments Faculty lounge discussion: Summary & implications OPTIONAL: Learning from Bhaskar Chakravorti et al (2016) "The Countries That • Cash-lite vs cashless leaders in the race to Would Profit Most from a Cashless World", Harvard • Over the hump: velocity and cashlessness Business Review (available here). readiness • Incentives and penalties OPTIONAL: Applying the • Use case dimensions payment use case framework • Ecosystem drivers OPTIONAL: Reflections on the Pick one of the Fletcher School cost of cash studies cost of cash for the US, India or Mexico (available here).