The Development of E-payments and Challenges for Central Banks in The SEACEN Countries
It is noted that one of the most important factors in promoting e-payment in the SEACEN countries is providing infrastructure. However, it is e-payments users' preferences that will determine the success of any payment instruments in the long-run. Other important factors include the adequacy of the legal framework, cost/profitability for operators as well as technical issues such as interoperability. Based on the development of e-payments, the development stages in the SEACEN countries can be roughly divided into three stages, namely advanced, moderately advanced and less developed ones. Policy recommendations are then mapped to these three stages of e-payment development. Central banks play a variety of role in the e-payment scenes. This includes policy making, licensing, supervision and as a catalyst for the promotion of e-payments. While e-payment may affect the core functions of the central banks, such as monetary policy implementation and maintaining financial stability, it is noted that currently to minimize such risks, SEACEN central banks and the relevant authorities have initiated several measures to help reduce various types of risk involved, in particular credit risk and systemic risk from the payment and settlement process. These include the enactment of regulations on e-payments and the establishment of oversight framework for e-payment systems. As this study concentrates on retail payment systems, it is useful to note that retail payment systems when compared to wholesale and corporate e-payments are less likely to propagate instability of the overall payment systems. For instance, at present, the issuance of retail e-money is too relatively small to pose a threat to financial stability. The study also notes that market-driven supervision which emphasizes on competitions and innovations and user-focused technological-driven infrastructure development can lead to the effective promotion of e-payment development.
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