Top PDF Retail payment systems in the OIC Member Countries

Retail payment systems in the OIC Member Countries

Retail payment systems in the OIC Member Countries

For members of the public who are used to traditional cash transactions for immediate delivery of goods and services, any form of intermediation may seem alien. Those who have made the transition to cheque systems will have come to understand the concepts of stored value and the role of intermediaries. They will also have familiarity with concepts such as payment for services that offer greater security than cash, delays in payment clearing, and standardised accounts. From that familiarity it is conceptually a small jump to debit cards, but perhaps a larger jump to credit cards, where the concepts of debt payments and interest rates introduce both procedural and, for some, moral considerations. Those payment systems that rely on digital technologies, and especially mobile phone or mobile internet technologies, require a further leap both conceptually and for some, culturally. Here the challenge is mainly the familiarity of such technologies, which is a trivial matter to those who grow up with mobile phones and online information and entertainment, but can be a large gap to bridge for those newly introduced to such practices. Some people are also concerned about the use of information about their purchasing and selling activities, especially when so many other actors beyond familiar banks and government agencies are involved. They may recognise that privacy is compromised even if they are content with the level of security offered. The may feel threatened by the introduction of players such as telecommunications network operators (mobile and terrestrial), accounting services providers, transaction services, handset and terminal equipment manufacturers, ‘trusted third party’ intermediaries providing security and identity checks, etc.
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Can e payment systems revolutionize finance of the less developed countries? The case of mobile payment technology

Can e payment systems revolutionize finance of the less developed countries? The case of mobile payment technology

Mobile money is a new payment technology used to facilitate financial or commercial transactions (called m-commerce) between buyers and sellers by the use of a mobile phone as an alternative for credit and debit cards, cash, or other means of payments. Monetary value is stored as credit information and can be transmitted through a secure applet. Mobile money can be used in the traditional market for both micro and retail transactions. Payment with mobile phone in the traditional market is based on contactless technology called near field communication (NFC) with a compatible payment terminal. Such as the stored-value card, an NFC is a new short-range device equipped with a chip that stores the users account information, while merchants require special POS readers. The chip is either separated from the SIM card of the mobile network operator or embedded in it. Customers can pay both by swiping the phone across a special reader or by composing a personal identifying code (PIN) into the phone to authorize payments via a short message service (SMS). Mobile money can also be used in the virtual market via the Wireless Application Protocol (WAP) service for the two kinds of transactions and without using a credit card or bank account.
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Competition and regulation in European retail payment systems

Competition and regulation in European retail payment systems

The process of setting standards for network components is vital to achieving the compatibility that makes network complementarity fully possible. 31 According to McAndrews (1997a), setting standards can be done by the market place, through co-operation (industry forums on setting standards), or by authorities. In payment systems, compatibility can be achieved by agreement on common technical standards, infrastructural arrangements or through interbank cooperation (eg as in ‘payment clubs or common systems’ discussed in Section 2.2). In many retail payment systems (most clearly eg in credit transfer systems), standards have traditionally been set ‘domestically’ by national authorities and/or banking associations, and as a consequence, domestic retail payment systems work rather efficiently in many countries. At cross-border level, standardisation has been more problematic on the one hand, because of higher number of different parties involved and, on the other hand, because of strict adherence to the adopted domestic standards in different payment methods. 32 At the international level, SWIFT (the Society for Worldwide Interbank Financial Telecommunication) has been successful in developing and implementing internationally accepted standards for interbank payments. At the European level, the European Committee for Banking Standards (ECBS) has been developing and advocating IBAN (International Bank Account Number) and IPI (International Payment Instruction) standards. 33 An obvious drawback in the work of the ECBS has been the fact that it lacks the power of enforcing the adoption of the formulated standards. In this regard, any standard, no matter how excellent it might be in improving the efficiency of the payment systems, is of little value when it is not adopted by a sufficiently large service provider group. However, the recent establishment of the European Payment Council (EPC) is likely to foster the concentrated effort of setting and adopting common standards in European payment traffic. The authorities can also play a role in standard setting process. For example, the
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Development of Retail Payment Systems Since 1949

Development of Retail Payment Systems Since 1949

trade. This raises the question, to what extent is culture a motivation in adoption of payment instruments. Two papers refute it playing any significant role. Deungoue (2008) assesses changes in banks‘ offerings of five payment instruments, cash, card, 15 cheque, credit transfer and direct debit in the context of legislative attempts to create a Single Payment Area in the European Monetary Union between 1990 and 2001. She argues that consumer behaviour in countries is converging because of more consistent regulation of payment instruments and of retail banking (which, she argues, influences payment instruments by causing a greater standardisation of retail banks‘ products). This, she believes, indicates that institutions associated with regulation are important to instrument choices in the EMU. Similarly, Mann (2002) analyses the use of credit and debit cards in the US and Japan. He argues that the difference in the use of credit cards in the two countries is driven by regulations that, until recently, prevented banks from lending revolving credit, an important basis for the issuance of credit cards. He argues that bank-issued credit cards not being able to offer revolving credit meant they were used more like a debit card, which, in turn, meant debit cards were not developed in Japan as they were in the US. Mann supports his arguments with initial evidence showing the removal of these regulations has resulted in early signs of convergence in card usage in the two countries. I note both of these papers, Deungoue (2008) and Mann (2002), draw a distinction between a country's culture and its government's restrictions of freedom, outlining that the second plays a greater role in retail payment system development. I return to this point in subsection 2.4.3 when I analyse literature on the role of government in retail payment systems.
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Integrated waqf based islamic microfinance model (IWIMM) for poverty alleviation in OIC member countries

Integrated waqf based islamic microfinance model (IWIMM) for poverty alleviation in OIC member countries

Poverty dominates the agenda of developing countries. Poverty was and still is one of the major impediments of human progress and societal development. Its existence is as old as human history while its alleviation is attributed to effective and successfull economic policies. Various approaches/policies are offered towards reducing poverty. These policies vary depending on time, space and the country concernced. However, reduction of poverty the major goal of many economic systems as stated by the Millenium Development Goals, thought sometimes not explicitly stated It was found that in OIC member countries religious and cultural norms drive preference of Islamic microfinance over conventional microfinance.The study further developed an Integrated waqf based Islamic micrfinance model (IWIMM) for poverty reduction in OIC memebr countries.This is expected to overcome the challenges of conventional microfinance such as, high cost of capital, low quality of human resource, vulnerabilites of poor borrowers due to lack of sustainable takaful and limited products for the clients with different occupationanl backgrounds. However, the model is yet to be verified empirically. Thus, further studies should be conducted to test the model using quantitative techniques such as, structural equation modelling (SEM). © IDOSI Publications, 2014.
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Infrasturactural Development in Organisation of Islamic Cooperation (OIC) Member Countries: Sukuk Mode Financing as an Alternative

Infrasturactural Development in Organisation of Islamic Cooperation (OIC) Member Countries: Sukuk Mode Financing as an Alternative

The term “Infrastructure” as we know it today originated in France in 19th century and till the first half of the last century (20th Century) it predominantly refers to military installation. Since about 1927, it has been used for roads, bridges railways and other related work needed for industrial economy. It was revealed that the great depression of 1929 in United State of America (USA) led to the new era of American Infrastructure. Thus, the list of the term extended to projects such as Federal administrative building, post office building, railway and bus stations, irrigation projects, road renovation and expansions, hydroelectric dams, rural electrification air and sea ports and so on. Therefore, many definitions has been assigned to the term by deferent scholars from their respective point of views. In other words, it is a heterogeneous term, which a universally accepted definition has remained elusive. However, Cambridge dictionary (n.d) defines it “as the basic system and services, such as transportation and power supplies, that a country or organization uses in order to work effectively”. It also says, it is “the basic structure of an organization or system which is necessary for its operation, especially, public water, energy, and systems for communication and transport” (dictionary.cambridge.org). According to Jetili & Sethi (2007). The term is generally defined as the physical framework of facilities through which goods and services are provided to the public. Its linkages to the economy are multiple and complex, because it affects production and consumption directly, creates positive and negative spill over effects, and involves large flow of expenditure.
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The Proposed Regulatory Regime for Stored Value Facilities and Retail Payment Systems in Hong Kong

The Proposed Regulatory Regime for Stored Value Facilities and Retail Payment Systems in Hong Kong

5.4.4.2 A major example to illustrate the concept of “facilitator” was the Mondex Scheme (which ceased operation many years ago and is no longer in operation in the current market). Under that scheme, Mondex was the originator of Mondex values which were sold to Mondex member banks for onward selling to retail customers. In return, Mondex received cash from its member banks and held a pool of funds which backed the Mondex values in circulation. Mondex values issued were stored in card-based devices which could be used for payment for goods and services in accepting locations. Consumers and merchants could redeem Mondex value in cash from their issuing banks. The issuing banks, in turn, could redeem the Mondex value for funds from Mondex. In this case, Mondex fell into the definition of “facilitator” as it facilitated the issue of Mondex cards by its member banks by originating the electronic value contained in the card in the first place.
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Report on the Brazilian Retail Payment System

Report on the Brazilian Retail Payment System

The report is based on information got through interviews with, and questionnaires answered by, banks, payment service providers, some real economy representatives, and banking associations. To get information on international experience, texts and reports published by international organizations, central banks and research institutions were considered. In addition, technical visits have been made to foreign central banks and retail payment clearing and settlement systems of the following countries: Germany, Belgium, Spain, the United States, Finland, France, the Netherlands, Italy, Portugal, the United Kingdom, Sweden and Switzerland. As compared to other countries considered in this report, the Brazilian retail payment system presents some peculiar features: (i) paper-based instruments (mainly cheque) are still used in large scale; (ii) retail payment clearing and settlement infrastructure is fragmented; (iii) there is low level of interoperability in ATM and POS networks.
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Integrating European retail payment systems: some economics of SEPA

Integrating European retail payment systems: some economics of SEPA

The general structure of our model can be described as follows. We consider horizontally-differentiated payment card networks in two countries. These networks are owned by card issuers and acquirers that in practice are mainly banks. We do not model issuing and acquiring banks explicitly so we can think that payment cards are issued by the payment networks. Consumers are uniformly distributed along a Hotelling line with two payment card networks located at the two extremities of the segment [0,1]. Consumers have unit demands for payment cards and cash is assumed to be their alternative payment method. We also assume that consumers have a perfect foresight and can thus correctly anticipate how many consumers will be subscribing each payment card network. This perfect foresight assumption helps to circumvent the multiple equilibria problem (see eg Shy, 2001, or equivalent concept of ‘fulfilled expectations equilibrium’ used in Katz and Shapiro, 1985). Next, we present the main building blocks of the model and show how it can be applied to describe the SEPA-formation.
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Optimal Design and Ownership Structures of Innovative Retail Payment Systems

Optimal Design and Ownership Structures of Innovative Retail Payment Systems

In addition to the different ownership structures, there is ongoing debate regarding how the innovative retail payment services should be deployed. Not only that the innovations require substantial infrastructure investments, but the scope and timing of adoption, as well as the design characteristics of the innovative payment services, vary across jurisdictions. Different environments, competitive pressure and business needs would influence when and in what form the innovative retail payment services emerge. Table A1 in the Appendix provides some examples of advanced retail payment system innovations in leading countries. In this research, we study how banks should build their innovative retail payment and settlement services in response to the FinTech trend. We propose a two-stage analytical model to compare the design and performance of innovative retail payment systems under two types of ownerships, namely, the government ownership and private ownership. We examine the optimal system design and banks’ participating incentives and timing decisions. We aim to answer the following questions: What are the optimal system configurations, in terms of system capacity to support innovative payments, under each ownership structure? What are banks’ participating incentives and strategies under each ownership structure, given that banks have heterogeneous capabilities of handling liquidity risk in settlement? What are the policy implications of the different ownership structures? When would bank associations be more effective in aligning banks’ economic incentives? And under what conditions would government mandate lead to socially optimal outcomes?
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Cyberspace Enhanced Payment Systems in the Zimbabwean Retail Sector: Opportunities and Threats

Cyberspace Enhanced Payment Systems in the Zimbabwean Retail Sector: Opportunities and Threats

The above statistics point to the fact that the retail sector in Zimbabwe has embraced ICT based payment systems, with the debit card facility and mobile money transfer payments as the leading payment platforms. Most of the retail outlets have POS terminals to enable debit card payments. Also important to note is the fact that the ecocash mobile money is linked to the ecocash debit card, hence a customer can choose to transact using either the card or the mobile money transfer. This possibly explains the dominance of the debit card payment platform in the retail sector. The findings resonate with the trends in other African countries wherein KPMG (2015) highlights the dominance of card payments and mobile payments in Kenya, Nigeria and South Africa. However, despite the dominance of the debit card facility, credit cards are not accepted for retail payments in Zimbabwe. All the interviewees also indicated that the credit card platform is not available in their respective businesses. More so, financial institutions in Zimbabwe are not issuing credit cards to customers. This is in sharp contrast with the global trends wherein credit cards are widely used in the United States (FRS, 2013), Australia (APCA, 2015), Kenya, and South Africa (KPMG, 2015). Though not a dominant payment platform, the RTGS facility also provides a good alternative to cash payment. Two shop owners who were interviewed indicated that retail products such as office furniture and appliances are mainly paid for through the use of RTGS facility, as most companies are reluctant to transact in cash. In concurrence to the questionnaire findings, seven of the ten interviewees from the retail business indicated that most of their loyal customers prefer to use debits cards and mobile phone transfers rather than transacting in cash. This was also supported by 6 out of 10 customers who indicated that they would rather use payment cards and mobile money transfers than to transact in cash. One of the customers had this to say, “I would rather use non cash based payment methods whenever possible than risk losing my hard earned cash to robbers.” Ironically though, non cash based payment systems are also prone to criminal activities. As (Metcalf and Kirst,2013) concur, the adoption of internet and
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Retail Payment Systems: What can we Learn from Two Sided Markets?

Retail Payment Systems: What can we Learn from Two Sided Markets?

The first natural criticism of the two-sided market theory pertains to the lack of empirical research to quantify indirect network externalities between consumers and merchants. In order to estimate membership and usage externalities in payment card systems, for instance, one should first use data to estimate demand on both sides of the market. This would be difficult to achieve, since most merchants are already equipped with terminals to accept cards in the majority of developed countries. When they are affiliated with a system, merchants are generally not allowed to turn down cards because of the "honour-all-cards" rule. It would consequently be impossible to estimate the negative usage externality that merchants would be likely to cause to consumers. It would also be rather difficult to derive a demand function for cards on the consumer side, because prices vary significantly from bank to bank, according to the bundle of services sold with the card. The appropriate theoretical framework from the literature on two-sided markets should consquently be chosen to estimate the links between transaction volumes and price structure. This would also prove difficult to estimate for the payment card industry, since consumers usually pay yearly or quarterly membership fees, while merchants are charged per transaction. Compared to other two-sided markets, like the media industry, it seems more difficult to gather the appropriate data and develop a theoretical framework to analyse the payment card industry 39 .
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Can E-Payment Systems Revolutionize Finance of the Less Developed Countries? The Case of Mobile Payment Technology

Can E-Payment Systems Revolutionize Finance of the Less Developed Countries? The Case of Mobile Payment Technology

Mobile money is a new payment technology used to facilitate financial or commercial transactions (called m-commerce) between buyers and sellers by the use of a mobile phone as an alternative for credit and debit cards, cash, or other means of payments. Monetary value is stored as credit information and can be transmitted through a secure applet. Mobile money can be used in the traditional market for both micro and retail transactions. Payment with mobile phones in the traditional market is based on contactless technology called Near Field Communication (NFC) with a compatible payment terminal. Similar to the stored-value card, an NFC is a new short-range device equipped with a chip that stores the users account information, while merchants require special Point Of Sale readers (POS). The chip is either separated from the SIM card of the mobile network operator or embedded in it. Customers can pay both by swiping the phone across a special reader or by composing a personal identifying code (PIN) into the phone to authorize payments via a short message service (SMS). Mobile money can also be used in the virtual market via the Wireless Application Protocol (WAP) service for the two kinds of transactions and without using a credit card or bank account.
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Reducing postharvest losses in the OIC member countries

Reducing postharvest losses in the OIC member countries

farmer level in Egypt. Rodents alone were found to cause annual weight losses of 4-10% of stored grains, with 10-26% of bags being damaged (El-Lakwah, 1984). Very limited data on losses incurred in the open-air flat storage sites (shounas) is available and inventory control is based on counting of the bags without regard to quality or quantity changes (El-Lakwah, 1995). One 1993/4 study found losses varied between shounas, generally ranging from 2- 12.4%, with the insect Trogoderma granarium attack on wheat and rodents causing high losses (El-Lakwah & Laborius, 1995). The wheat storage period is typically between 4-8 months. Handling and transport losses were ~0.21% on shounas. Storage losses of cereal grains in the Lakyubia region were 0.03-0.77% and for pulses, 1.41-2.81% in 1989/91 (El-Lakwah et al., 1993). Later stored product entomological research included laboratory work on the role of botanicals, such as Neemazal (a 10% neem powder) in protecting stored grain against insect damage (El-Lakwah and El-Kashlan, 1999), and studies assessing whether differential resistance of sorghum varieties to attack during storage by the angoumois grain moth, Sitotroga cerealella could be incorporated into effective stored pest management (Hassan et al., 2014). Laboratory studies on stored product pest management occur, but very few large scale applied studies follow (El-Lakwah, 1995). The few studies that have looked at aflatoxin contamination of food products have found that a high proportion of cereal grains (maize, wheat and rice) and groundnuts in Egyptian markets contained aflatoxins B1 or G1 at levels well beyond the WHO and FDA safe limit for human consumption (El-Shanshoury et al., 2014). Unfortunately the African Postharvest Losses Information Systems ( APHLIS) does not cover North Africa and therefore cereal
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TRENDS IN INTERNATIONAL MERCHANDISE TRADE: A REVIEW OF THE OIC MEMBER COUNTRIES

TRENDS IN INTERNATIONAL MERCHANDISE TRADE: A REVIEW OF THE OIC MEMBER COUNTRIES

The volume of merchandise trade among countries has been rapidly increasing in recent two decades along with the tidal wave of globalization that began in the late 1980s. In this respect, the growing levels of economic integration through the emergence of economic blocks in addition to the increasing number of trade agreements around the world, the formation of more flexible global production systems thanks to the developments in information and telecommunication technologies accompanied by the proliferation of multinational firms and foreign direct investments, and the improvements in modes of transportation that have resulted in lower costs have been the major contributors to the expansion in the global merchandise trade.
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Climate Change and Crop Yields in Iran and Other OIC Countries

Climate Change and Crop Yields in Iran and Other OIC Countries

Exenberger et al (2014) examined the impact of climate change on agricultural production and considering technological differences, in a panel of 127 countries from 1961 to 2002. In high income countries, climate change hasn’t significant impact on agricultural production, but has significant adverse impacts on low and middle income countries. These adverse effects implies a moderate negative effect of temperature increase on agricultural production. For low income countries, the adverse impacts include the reduction in precipitation and the increase in the frequency of drought events which both are strong in sub- Saharan Africa.
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The Effects of Democracy on Environment Quality Index in Selected OIC Countries

The Effects of Democracy on Environment Quality Index in Selected OIC Countries

Air pollution means the mixture of air with gases, drips, and particles that diminish the air quality. In other words, pollution is harmful materials in atmosphere produced naturally or by human activities (Shafipur, 2008). Vehicles, airplanes, industries, and construction are the main factors of air pollution. Environmental pollution is a main challenge in today‟s world, so that countries follow organizing environmental problems rather than their internal policies. Industrialization leads to utilization of fossil fuels such as coal, oil, and gas increasingly for production and transportation. Combustion of such fuels releases CO2 in atmosphere. Thus, countries producing these materials play important roles in polluting the air. According to the material equilibrium principle, in an economic system only a part of energy is converted to goods and services, and the rest is returned to environment as the residue or pollution. Along with the development of human knowledge, human handicrafts affect the shape of waste, residue, pollution gases, etc. directly and indirectly.
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Unified Payment Interface—An Advancement in Payment Systems

Unified Payment Interface—An Advancement in Payment Systems

This paper studies Unified Payment Interface (UPI), a new age payment sys- tem introduced in India by National Payment Corporation of India. Unified Payment Interface is a mobile centric, real time interbank payment system which has the potential to transform and universalize digital payments in In- dia. The paper traces the evolution of payments systems in India and ex- amines in detail the technology behind Unified Payment Interface focusing on its architecture and security systems through empirical and theoretical litera- ture review. UPI is a significant advancement as compared to extant payment system in terms of cost, ease of use for consumers, settlement times and secu- rity and has witnessed good user adoption. Its modular API based architecture will enable development of innovative solutions for consumers and business- es. UPI is currently in its infancy stage and development of merchant centric UPI solutions will greatly increase the user adoption. UPI can help bring a large part of the population within the ambit of digital economy and can be a great tool for financial inclusion in India.
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A PRACTICAL GUIDE FOR MEASURING RETAIL PAYMENT COSTS

A PRACTICAL GUIDE FOR MEASURING RETAIL PAYMENT COSTS

142. Structure: As in the case of the demand side actors, a three-section questionnaire can capture the relevant data for the supply side actors, PSP and PIP. The first part should cover volume data. It is important to collect data on the volume of transactions carried out using each payment instrument through each transmission method (where applicable) and on the number of payment instruments issued, delivered, recycled, destroyed, truncated, etc. (e.g. number of banknotes, coins, paper cheques, paper forms for direct credit transfers and direct debit transfer mandates, payment cards, etc.) within a certain period of time. The second section deals with the cost elements. For the PSP questionnaire, a distinction needs to be made between resource costs and transfer costs, in particular. It is important to point out that, although many cost elements are classified as resource costs, this is only the case when the activities associated with these cost elements are performed in-house or they are outsourced to organizations that are not qualified as PIP or PSP. When activities are outsourced to other surveyed PIP/PSP, the outsourcing fees are considered to be transfer costs by definition. Therefore, the design of the PSP questionnaire should make it possible to distinguish among activities performed internally, fees paid for services outsourced to other PSP/PIP surveyed or non-PSP/non-PIP. This approach aims to avoid double counting of costs. The third and final section aims to capture general information such as number of employees, number of branches, number of transaction accounts, operations costs, and other information of this nature. See sample questions in Box 5 (PSP) and Box 6 (PIP).
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Non-performing loans and bank efficiency of conventional and Islamic banks in OIC countries

Non-performing loans and bank efficiency of conventional and Islamic banks in OIC countries

financial system. This applies to both the conventional banks and the Islamic banking sector that is growing competitively in these countries. Therefore, to discharge their responsibilities effectively, the banking sector must be cost, profit and revenue efficient. Furthermore it has to have an effective mechanism to avoid adverse selection and minimize the amount of non-performing loans (NPL) for the conventional banks and nonperforming financing (NPF) for the Islamic banks. This will consequently help the banking sector to perform better and contribute towards the nation’s economic growth.
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