GLOBAL LANDSCAPE STUDY ON DIGITISING P2G PAYMENTS PAY www.karandaaz.com.pk In collaboration with Global Landscape Study on Digitising P2G Payments Published in Pakistan in September 2016 by Karandaaz Pakistan with financial support from the Bill and Melinda Gates Foundation, and the Department for International Development (UKAid). Technical and additional financial support for the study was provided by The Consultative Group to Assist the Poor (CGAP). Authored by Dalberg Global Development Advisors. The views expressed in this document are those of the authors and do not necessarily reflect the views and policies of Karandaaz Pakistan or the donors who have funded the study. © 2016 Karandaaz Pakistan GLOBAL LANDSCAPE STUDY ON DIGITISING P2G PAYMENTS © 2016 Karandaaz Pakistan ACKNOWLEDGEMENTS AND AUTHORSHIP The findings and analysis in the pages that follow would not have been possible without the 86 experts and 55 organisations who shared their time, experience, and knowledge. We are also grateful to the 90+ consumers who took the time to speak with us in one-on-one interviews and focus group discussions (FGDs), providing rich, consumer-level insights that can meaningfully improve the functionality and usefulness of digital person-to-government (P2G) payments. Karandaaz Pakistan funded the landscape study and the Consultative Group to Assist the Poor (CGAP) provided additional funding and technical expertise. Dalberg Global Development Advisors (Dalberg) authored the study. Karandaaz Pakistan promotes access to finance for small and medium enterprises through a commercially directed investment platform, and financial inclusion for individuals by employing technology-enabled digital solutions. The Company has financial and institutional support from leading international development finance institutions, principally the UK Department for International Development (UKAid) and the Bill and Melinda Gates Foundation. A primary focus is on generating economy-wide efficiencies and decreasing the cost of financial transactions by promoting innovative digital financial solutions. Established in 1995 and housed at the World Bank, CGAP seeks to improve the lives of poor people by spurring innovation and advancing knowledge that promotes responsible and inclusive financial markets. CGAP develops innovative solutions for financial inclusion through practical research and active engagement with financial service providers (FSPs), policymakers, and funders. Dalberg is a strategy and policy advisory firm dedicated to global development. Its mission is to mobilise effective responses to the world’s most pressing issues. It works with corporations, foundations, NGOs, and governments to design policies, programmes, and partnerships to serve needs and capture opportunities in frontier and emerging markets. Mehr Shah (Karandaaz Pakistan) and Naeha Rashid (Karandaaz Pakistan) directed the project, Stefan Staschen (CGAP) led the CGAP contribution to the project and Rashmi Pillai (CGAP) and Steve Rasmussen (CGAP) provided valuable guidance. From Dalberg, Andria Thomas, Varad Pande, and Swetha Totapally authored the report, with research, analysis, and writing contributions from Krisha Mathur, Lizann Fernandez, and Jesse Lichtenstein. Anand Raman and Howard Miller provided payments expertise. We received in-country support from Anand Raman (India), Myra Valenzuela (Philippines), Ivan Murenzi (Rwanda), and Wilson Kimali (Rwanda). Research and analysis for this study were completed during the period January–May 2016. Exhibit content was created by Dalberg. Ali Shahrukh Pracha copy-edited the final document. The symbols and icons in the exhibits were taken from the Noun Project and recreated by digital artists at Retroactive Studios. The design of the publication was consolidated with creative management from Sumaira Sagheer (Retroactive Studios), thematic illustrations by Ahla Saeed (Retroactive Studios), cataloguing of case studies by Amina Aqib (Retroactive Studios) and title and layout design by Uzma Toor (Retroactive Studios). Photographs were catalogued by Swetha Totapally (Dalberg) while a few country- specific images in the case studies were contributed by the photo bank at Retroactive Studios. The publication was printed in September 2016 at Pangraphics (Pvt.) Limited in Islamabad. For more information, e-mail us at [email protected]. ACRONYMS AND ABBREVIATIONS ACB Akiba Commercial Bank IMPS Immediate payment service (India) ACH Automated clearing house INR Indian rupee (currency) API Application programming interface IRCTC Indian Railway Catering and Tourism APY Atal Pension Yojana Corporation ATM Automated teller machine IT Information technology B2C Business-to-consumer (payment) IVR Interactive voice response B2G Business-to-government (payment) JOD Jordanian dinar (currency) BESCOM Bangalore Electricity Supply Company JoMoPay Jordan Mobile Payment BEST Brihanmumbai Electric Supply and KBS Kigali Bus Services Transport KP Khyber Pakhtunkhwa (province in Pakistan) BIR Bureau of Internal Revenue (Philippines) KRA Kenya Revenue Authority BISP Benazir Income Support Programme KYC Know your customer (Pakistan) LGU Local government unit BSP Bangko Sentral ng Pilipinas (Central Bank MDR Merchant discount rate of the Republic of the Philippines) MFI Microfinance institution BTCA Better Than Cash Alliance MNO Mobile network operator CBJ Central Bank of Jordan MTN Mobile Telephone Network CeG Centre for e-Governance (India) NBP National Bank of Pakistan CGAP Consultative Group to Assist the Poor NEFT National electronic funds transfer (India) CISMP Centralised information system on mass payments (Azerbaijan) NFIF National Financial Inclusion Framework (Tanzania) COA Commission on Audit (Philippines) NFIS National Financial Inclusion Strategy CRISIL Credit Rating Information Services of India (Pakistan) Limited NMB National Microfinance Bank (Tanzania) DAWASCO Dar es Salaam Water and Sewerage Corporation (Tanzania) NPC National Payment Council (Jordan) DEITY Department of Electronics and Information NPCI National Payments Corporation of India Technology (India) NPS National Pension Scheme (India) DFS Digital financial services NRPS National retail payment system EBPP Electronic bill presentment and payment (Philippines) EBT Exim Bank Tanzania NSDL National Securities Depository Limited (India) EFT Electronic funds transfer OBLS Online Business Licensing Service EGMP E-Government Master Plan (Philippines) (Singapore) EMP Emerging Market Partners OECD Organisation for Economic Co-operation EWURA Energy and Water Utilities Regulating and Development Authority (Tanzania) OTC Over-the-counter (transaction) FGD Focus group discussion P2B Person-to-business (payment) FSP Financial service provider P2G Person-to-government (payment) G2P Government-to-person (payment) P2P Person-to-person (payment) GEPP Ghana Electronic Payment Platform Pag-IBIG Pagtutulungan sa Kinabukasan: Ikaw, GSM Global System for Mobile Communications Fund Bangko, Industria at Gobyerno GSMA Groupe Speciale Mobile Association (Home Development Mutual Fund – Philippines) ICT Information and communications technology © 2016 Karandaaz Pakistan PFRDA Pension Funds Regulatory and Development Authority (India) PHP Philippine peso (currency) PIN Personal identification number PKR Pakistani rupee (currency) PMJDY Pradhan Mantri Jan-Dhan Yojana POS Point-of-sale (device) PPP Public-private partnership PRAN Pension registration number (India) RDB Rwanda Development Board RFID Radio frequency identification RFP Request for proposal RFTC Rwanda Federation of Transport Cooperatives ROPL RwandaOnline Platform Ltd. RRA Rwanda Revenue Authority RTGS Real-time gross settlement RURA Rwanda Utility Regulatory Authority RWF Rwandan franc (currency) SIM Subscriber identification module (card) SIMM Scaling Innovations in Mobile Money (USAID team) SMI Smart e-Money Inc. SMS Short messaging service SSS Social Security System (Philippines) STK SIM application toolkit TPB Tanzania Postal Bank TRA Tanzania Revenue Authority TTMS Traffic Ticket Management System (Pakistan) TZS Tanzanian shilling (currency) UI User interface UKAID UK Department for International Development USAID United States Agency for International Development USD United States dollar (currency) USSD Unstructured supplementary service data UX User experience GLOSSARY OF TERMS Automated clearing house (ACH) – An electronic E-government – The use of the Internet and network for financial transactions in the United States telecommunications technology to improve public that processes transactions in batches. sector effectiveness. Digitising P2G payments is one Application programming interface (API) – A set of component of e-government; governments can also protocols and tools used for building software and digitise service delivery, information to citizens, and applications. In the context of person-to-government businesses through e-government solutions. (P2G) solutions, APIs are used to transfer information Electronic funds transfer (EFT) – The electronic from the front-end solution to government back-end transfer of money from one account to another, either systems and vice-versa. within a single financial institution or across multiple Back-end system – The technology stack, including institutions. software, systems, firewalls, and other technology- End-to-end encryption – A P2G security protocol related investments, that a government makes when ensuring that only the payer (the individual) and developing a digital P2G solution. payee