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The share of digital payment transactions to total monthly retail payments in the Philippines grew from 42.1% in 2022 to 52.8% in 2023, according to the Bangko Sentral ng Pilipinas (BSP). This indicates that the central bank has surpassed its target of digitalizing 50% of digital payments volume in the country under its Digital Payments Transformation Roadmap 2018-2023. In terms of value, the latest e-payments measurement also showed that the share of monthly digital payments to total transactions increased to 55.3% in 2023 from 40.1% in 2022. The main contributors to the rise in e-payments were merchant payments which accounted for 64.9% of monthly digital payments volume, person-to-person transfers at 19.3%, and business-to-business supplier payments at 6.1%.

The U.S. Federal Reserve Board (FRB) published an assessment of the offline digital payment payment services and analyzes their potential to mitigate internet outage risks and bolster digital payment resilience. It finds that many services branded as offline payment solutions are more accurately classified as hybrid solutions because they ultimately require internet access for clearing and settlement. Truly offline digital payment systems that exchange digital bearer instruments for instant, in-person settlement are still in early development stages. The note lays out a variety of risks associated with offline payment models, including risks related to double spending, security, user privacy, and merchant liability. It concludes that certain offline payment models are promising, but more research and wider uptake is needed for the technology to drive incremental gains in payment system resilience and reliability.

"This paper studies the desirability of programmable payments where transfers are automatically executed conditional upon preset objective criteria. We do so by studying optimal payment arrangements in a framework that captures a wide range of economic relationships between two parties. Our framework stacks the cards in favor of programmable payments by considering an environment without legal recourse. The results show that the optimal payment arrangements for long-term economic relationships consist predominantly of simple direct payments. Direct payments increase the surplus by avoiding the liquidity cost of locking-up funds from the moment where the payer commits the funds in a programmable payment until the moment where the conditions are satisfied to release those funds to the payee. Programmable payments will be desirable, and may in fact be the only viable payment arrangement, in situations where economic relationships are of a short duration. "

The Eurosystem defined a harmonized policy to allow non-bank payment service providers (PSPs) to access central bank-operated payment systems, including TARGET. Non-bank PSPs include payment institutions (PIs) and electronic money institutions (EMIs). The broader access criteria for TARGET are aimed at enhancing the efficiency of the European retail payments market, fostering competition and innovation in the European payments landscape, and supporting the uptake of instant payments in the European Union. Starting in April 2025, non-bank PSPs meeting certain requirements will be able to access TARGET, including T2 (for settling payments) and TIPS (for settling instant payments). The Payment Services Directive was also amended to introduce the option for non-bank PSPs to safeguard users' funds in an account held with a central bank, subject to the discretion of that central bank.

The National Bank of Cambodia (NBC) and Ant International have reportedly launched cross-border QR code payments. The payments will occur between NBC's Bakong payment system and Ant International's Alipay+ cross-border mobile payments and digital solutions platform. This will allow users of 12 international payment apps, including Alipay, AlipayHK, Touch 'n Go eWallet, GCash, Kakao Pay, and others, to make seamless payments to merchants in Cambodia by scanning KHQR codes. This will support payments in Cambodian riels. In September 2024, the NBC and Bank Negara Malaysia launched a similar scheme for payments between Cambodia and Malaysia.

According to McKinsey, digital payment transactions grew rapidly in emerging markets during the past two years, as the pandemic accelerated shifts to contactless payments and e-commerce. E-wallets proliferated, real-time account-to-account transfers took off, and industry players formed new partnerships to access capabilities and broaden their customer base. Some of the fastest growth occurred in Africa and Southeast Asia, where low banking penetration gives payments providers opportunities to capture untapped potential and reach underserved populations... Margins for digital payments providers are already wafer thin and are likely to be eroded further by competitive intensity and declining fees. In many cases, payments are more a means to cross-sell other products than a profit center in their own right. Some services, such as peer-to-peer (P2P) payments, are usually offered to users for free in most markets. In Brazil, for instance, Pix is pushing margins down by offering P2P payments for free and person-to-merchant (P2M) payments at low cost.

The U.S. Treasury published a report on the Future of Money and Payments that reviews the current U.S. system of money and payments, including developments in instant payments and stablecoins. It describes design choices for a potential U.S. central bank digital currency (CBDC) and recommends that the Fed advance work on it, in case one is determined to be in the national interest. Among other things, the report also encourages use of instant payment systems to support a more competitive, efficient, and inclusive U.S. payment landscape, the establishment of a federal framework for payments regulation to protect users and the financial system, while supporting responsible innovations in payments, and prioritizing efforts to improve cross-border payments, both to enhance payment system efficiency and protect national security.

Paxos launched a new stablecoin payments platform targeting payment service providers (PSP) and Fintechs that want to enable stablecoin payments. Global payment processing company Stripe will be the first PSP to integrate the new platform into its system. The infrastructure will be featured on Stripe's Pay with Crypto product, which allows users to accept stablecoin payments settling in fiat currencies. Once a stablecoin payment is received via Paxos, users can choose whether to immediately convert to fiat currency and settle in local currency, or pay out stablecoin balances directly to merchants. Merchants will have the ability to issue refunds by instantly converting fiat into the stablecoin originally used, then sending directly to the wallet used in the initial payment. https://paxos.com/blog/paxos-launches-new-stablecoin-payments-platform/ https://docs.stripe.com/crypto/integrate-pay-with-crypto

The Riksbank considers it necessary to increase the possibility of making payments even in the event of major disruptions in data communication. Therefore, card payments should be possible even without functioning data communication, i.e. offline. Hence, the Riksbank will collaborate with the private and public actors concerned, including card network providers, card acquirers and retailers, to achieve a common view and identify measures. The Riksbank considers the technical conditions for offline payments already favorable, but issues to be resolved around administrative processes, how abuse of offline payments can be curbed and who should bear the liquidity and credit risk arising from an offline payment. The Riksbank's objective is that, by July 1, 2026, it shall be possible to make card payments offline for the purchase of essential goods in the event of disruptions lasting up to 7 days. The possibility shall apply to all those over the age of 18 who have a card with one of the banks covered by the Riksbank's regulations.

Crunchfish and Lipis Advisors pubished a guide to offline payments design, providing insights to how offline payments relate and can interoperate with online payment system. It provides a way of categorizing offline payment solutions by three design choices which provides the payment ecosystem with a better understanding of the nuances of offline payments: -Online Payment Rail: (i) distributed ledger technology (DLT) based or (ii) centralized account-based. (The paper incorrectly labels DLT-based as token-based (see the 20xx New York Fed article on this misnomer). -Offline Security Protocol: (i) native (layer-1) or (ii) non-native (layer-2) tokens security protocol, described in relation to the underlying online payment rail. -Offline Trusted Environment: (i) hardware-based or (ii) software-based.

"Financial intermediaries play an important role in consumer adoption and use of payment technology. Card schemes and card-issuing banks set rules for cashless payments between consumers and merchants. We document that these rules have a strong causal impact on the use of digital payment technology. We study an increase in the value limit for contactless cardholder verification ("tap-and-go" limit) that was introduced at the onset of the COVID-19 pandemic. Our analysis is based on anonymized, transaction-level data for a large sample of point-of-sale (POS) debit card payments between 2019 and 2021. We show that the increase in the "tap-and-go" limit caused a significant increase in the consumer use of contactless payments but only a minor increase in first-time adoption of this payment technology. Our results suggest that policy-makers are advised to consider the role of intermediaries and verification rules when evaluating payment innovations, such as instant payment systems or central bank digital currencies (CBDCs)."

The authors of a recent IMF working paper, based on a study of the declining use of cash for payments relative to payment cards and e-money in 24 of 25 countries studied, concluded that the main impact of the introduction of a retail central bank digital currency (CBDC) will be on the usage of cash substitutes. They assume that central banks will likely design their CBDCs to largely match user and merchant benefits associated cards use in terms of convenience, speed of payment, fraud control, and other desirable payment attributes, and then run through the additional incentives that may be required for their adoption and use. These might include zero fees to both users and merchants, and making payments immediately final and available in receivers' bank deposit accounts. However, card schemes may fight back by reducing interchange fees and providing merchants immediate access to card sale revenues and make up the revenue loss elsewhere. Also, card firms that own and supply fast payment services may choose to rely on these newer payment services going forward, providing zero-cost person-to-person mobile payments, as well as person-to-business point of sale transactions and business-to-business invoice payments, with fees paid for by the receiver.

The Swiss National Bank (SNB) published a paper that examines how payment choice affects consumer discretionary spending using a proprietary dataset that links a payment-methods survey, a payment-diary survey and a behavioral survey for a representative sample of 1,138 Swiss consumers. It finds that "present-biased" consumers spend more, the more often they use cashless payment instruments. (Present-based consumers are those that score high on indicators of impulsivity and procrastination.) For consumers with low levels of present bias, we find that spending is unaffected by payment instrument usage. This suggests that designers of instant payment services and central bank digital currency (CBDC) wallets consider offering prepaid payment cards or of mobile-payment applications that allow consumers to manage and restrict their liquidity in a convenient manner.

The Eurosystem has a mandate to promote the smooth functioning of the payment system from a holistic perspective. From the perspective of retail payments, the smooth functioning of the payment system means ensuring that, in their tangible interaction with the euro, people and businesses are able to make safe and efficient payments and thus their trust in the currency is maintained. To this end, the Eurosystem is responsible for issuing public money, currently in the form of cash, which may possibly be complemented by a digital version, i.e. a digital euro. In addition, the Eurosystem can act: (i) as a catalyst for change, promoting efficiency in the field of retail payments; (ii) as overseer, setting retail payment standards and rules and ensuring compliance; and (iii) as an operator, having the possibility to set up public infrastructures. The trends at work in the retail payments landscape have the potential to bring benefits to consumers and businesses alike. However, they also carry risk and will require the Eurosystem to take action in its different capacities. This article looks at the changing retail payments ecosystem, before turning to the Eurosystem's multi-faceted policy response and providing perspectives on the way ahead.

Capgemini published its annual World Payments Report that reflects the views of 600 corporate treasurers from across three industries: insurance, retail, and automotive. It also includes payments insights from focused interviews and surveys with over 200 senior payment executives of leading banks, financial service organizations, payment service providers, industry associations, and central banks representing all regions of the globe. The report finds that supportive regulations and innovative industry initiatives, especially regarding open finance and instant payments, have resulted in surging non-cash payments in the Asia-Pacific region. Also instant payments, now operational in over 80 markets, are picking up speed.

The Bank for International Settlements (BIS) proposed a formally defined model to represent three key functions of payment system architectures: issuance/withdrawal, holding and transfer of funds in a standardized manner. The model defines payment diagrams, using a precisely defined syntax. The paper illustrates the application of these diagrams for domestic and cross-border account transfers, as well as cash, card, e-money and stablecoin payments. However, the payment diagrams can be used for any type of funds and can be applied across different payment system architectures. It also demonstrates how the diagrams correspond to the balance sheet approach commonly used in economics, and that it offers added value by providing an end-to-end visualization of every stage of the payment journey. The model provides a tool for central banks, regulators and the payment industry to better understand and compare existing and new payment system architectures.

Payments Canada selected Mastercard's Vocalink as the clearing and settlement solution provider for the country's new Real-Time Rail (RTR). Operated by Payments Canada and regulated by the Bank of Canada, the RTR will allow Canadians to initiate payments and receive irrevocable funds in seconds, 24/7/365. Underpinned by the ISO 20022 data standard, the system will support payment information travelling with every payment and act as a platform for innovation, enabling the introduction of new and enhanced payment products and experiences. The RTR is expected to launch in 2022.

The Bangko Sentral ng Pilipinas (BSP)published its "2022 Status of Digital Payments" report, highlighting the significant growth of digital payments in the Philippines, now comprising 42% of all retail payments in 2022 (versus 14% rate in 2019) and 40% in terms of value (24%). Merchant payments and person-to-person (P2P) fund transfers are the main drivers of the greater digital payments adoption, representing 74% and 15% of total digital payment volumes, respectively. These payment use-cases are high-frequency, low-value transactions.  https://www.bsp.gov.ph/SitePages/MediaAndResearch/MediaDisp.aspx?ItemId=6776

"QR code payments lower payment costs for commercial customers, enable them to get their money faster, make reconciliation easier and provide a seamless payment experience for their customers. Financial institutions looking to offer innovative, high value payment methods to their commercial customers can test QR code payment use cases, solution providers and strategies today in a closed-loop environment. As RTP and FedNow gain traction in the U.S., financial institutions with QR code payment know-how can enhance their instant payments offering with QR codes to differentiate, and ultimately win new business."

FIS published its 2023 Global Payments Report that examines how consumers pay today both in-store and online across 40 global markets. In 2022, there were almost 70 real-time payment (RTP) schemes providing high-speed payment rails that helped drive account-to-account (A2A) payments to account for $525 billion in global e-commerce transaction value, versus $463 billion in 2021. A2A payments flow directly - and often instantly - from a consumer's bank account to a merchant's account, helping to drive down the cost of acceptance for merchants. The growth of A2A in the U.S. mirrors the global trend, with A2A accounting for 9% of e-commerce transaction value in 2022. This is projected to keep growing, fueled in part by consumer use cases arising from the 2023 launch of the Federal Reserve's FedNow payments network, and the existing RTP from The Clearing House and Zelle real-time payment networks