Instant Payments for the Maldives: The Maldives Payment System Development Project

Posted on Jul 22, 2021 by Mr. Ali Hashim, Governor, Maldives Monetary Authority

Introduction

Developments in technology have brought about enormous transformations in almost every industry throughout the world over the past few years. Factors such as evolving technological innovations, demographics, customer preferences, regulatory requirements and the emergence of new market players have changed the dynamics of not only the financial sector but all industries globally.

Accordingly, this shift has resulted in the evolution of banking services as we know it. The rise of fintech start-ups and other non-bank payment service providers (PSPs) have strengthened their position in the market with innovative, user-friendly digital products and services. Concepts such as digital banking (branchless banking) are inevitably becoming the norm—with the delivery of service over the internet, mobile applications, and other digital means threatening to make the more traditional methods of over-the-counter service delivery obsolete.

At the same time, the use of biometrics and other such innovations are taking over the processes of know-your-customer (KYC), digitalizing a key element in the provision of payment services. While digitalization of financial services and technological developments are moving at a fast pace, aiding in financial inclusion and accessibility through innovative services, we at the Maldives Monetary Authority (MMA) are keen to not be left behind in this financial revolution.

As such, a key pre-requisite to the provision of efficient digital financial services is a digitally enhanced, inclusive infrastructure that facilitates interoperability between different services providers. Owing to the high geographic dispersion of the country—with residents scattered across 187 inhabited islands—the delivery of service through a sound and robust technological infrastructure will enable the services to reach even the most isolated corners of the country. This will drastically reduce the high dependency on traditional paper-based payment methods, as well as the need to visit physical outlets to access basic financial services, a long-standing challenge in the Maldivian payments and financial landscape.

To capitalize on the technological developments in the global payments arena and the country’s strong telecommunication infrastructure, the MMA identified the need for a sound and inclusive, digitally enhanced network that will address the obstacles in developing and introducing digital financial services in the Maldives. In line with this, the MMA has initiated the Maldives Payment System Development (MPSD) Project with the aim of transforming the payment landscape by building an instant payment system which will enable simple, fast, and secure payment services for Maldivians.

With advancements in technology, almost all general services such as payments for daily spending, transferring money to friends and family, or even making utility payments have been made possible with a tap on a smart device. However, the availability of appropriate infrastructure will be ...



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Tags

Instant Payments, Financial Inclusion, Modernisation, Infrastructure, Innovation