Retail Payment Systems
In the OIC Member Countries
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systems are used for the bulk of mainly low-value payments to and from individuals, and
between individuals, companies and public authorities. While they may not appear to be
‘systemically important’, they contribute to both the stability and efficiency of the financial
system as a whole and to citizens’ confidence in their states. As such, many countries regard
retail payment systems as a component of ‘critical infrastructure’.
To facilitate the development of better retail payment services, it is important to understand
previous studies about retail payments and markets. New payment service businesses create
the opportunity to disrupt established markets, however there are many factors that might
contribute to such changes, making it all the more difficult to assess which systems are likely
to succeed. Banks and financial institutions, mobile network operators (MNOs), and incumbent
mobile payment service providers try to understand this issue, but their analyses are rarely
based on empirical data and large-scale research. Much available information is compiled by
participants, such as Vodafone, in ways that allow them to focus on their own participation and
interests.2 As such, this research explores the importance of efficient retail payment systems
and sheds light on the business value of retail payment services. This study also develops an
integrated framework for the evaluation of the retail payment system by policy makers in the
OIC Member States.
1.2 Objective of the Report
We focus on policy- and practice-relevant knowledge about how retail payment systems are
being used in the OIC Member States. The underlying question is: How are the OIC Member
States adapting and using retail payment systems to promote financial stability, and how does
this affect their development? The research further describes which public institutions such as
governments and central banks, financial institutions and telecommunication companies affect
the use and proliferation of differing payment systems. This research is intended to inform
and provide actionable recommendations for the relevant policy makers.
The main features of the report are to:
1. Identify the conceptual framework for the analysis of retail payment systems and of recent
developments internationally.
2. Provide an analysis of the current retail payment systems of OIC Member States.
3. Analyse the selected OIC Member States in terms of retail payment systems in line with
international best practices.
2 See ; see also the World Bank report on
M-Pesa: