Payment Aspects of Financial Inclusion (PAFI)

September 11, 2017

Having efficient, accessible and safe retail payment systems and services is necessary to be able to extend access to transaction accounts for the 2 billion worldwide people who are still unserved by regulated financial service providers.

The World Bank Group and the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements convened a task force on Payment Aspects of Financial Inclusion (PAFI) to comprehensively examine how payment systems and services affect financial inclusion efforts.

The PAFI task force, convened in 2014, brought together experts from central banks, development banks and international organizations to examine this issue in a comprehensive manner.

Its mandate was to examine demand- and supply-side factors affecting financial inclusion in the context of payment systems and services, and to suggest what measures could be taken to address these issues. The demand side is comprised by payment service users, like consumers, businesses, and government agencies and the supply side are payment service providers, like banks and authorized and/or regulated non-banks, as well as payment system operators.

The task force’s objectives were to:

  • Support the efforts of authorities to expand access to transaction accounts and the use of electronic payment services
  • Contribute to the recognition that safe and efficient payment services are important for the well-being of individuals, households and businesses, as well as a gateway to a broader range of financial services
  • Advance market efficiency, flexibility, integrity and competitiveness to support financial inclusion and stability
  • Facilitate the establishment of a balanced and proportional regulatory environment to facilitate effective, reliable, safe and cost-efficient access to payment services.

The PAFI work is essential to worldwide financial inclusion efforts, particularly to the World Bank Group’s UFA2020 initiative, whose goal is ensure that all working-age individuals and businesses can have access to at least one transaction account operated by an authorized and/or regulated payment service provider to:

  • Perform most, if not all, of their payment needs
  • Safely store some value
  • Serve as a gateway to other financial services

The task force found that certain financial and other relevant infrastructures are necessary for an efficient national payment system also form one of the basic foundations for financial inclusion.  They include:

  • A large-value interbank settlement system
  • An interbank system for retail payments, in specific electronic funds transfers
  • A payment card processing platform or platforms and
  • An effective and efficient identification infrastructure
  • Credit reporting and other data-sharing platforms also play an important role
  • Finally, all a robust communications infrastructure and power supply system are essential.

Without these financial infrastructures, the efficient provision of various transaction accounts and electronic would be very difficult.


Report on Payment Aspects of Financial Inclusion

In September 2015, the PAFI task force released a consultative report on Payment Aspects of Financial Inclusion, for a three-month public consultation process which ended in December 2015. As a result of the comments received the report was updated to strengthen the analysis and sharpen the message and the final report was issued in April 2016.

The report analyzes how payment systems and services promote access to and use of financial services.

It examines what elements of retail payments are critical to financial inclusion and how improving the payments infrastructure and services could accelerate access to and use of transaction accounts.

It also discusses the relevance and importance of measuring the effectiveness of financial inclusion efforts from a payments perspective.

The report outlines seven guiding principles and suggests key actions countries could take to advance access to transaction accounts, which then can serve as a gateway to broader financial inclusion.

These guiding principles are:

  • Guiding principle 1: Public and private sector commitment: Commitment from public and private sector organizations to broaden financial inclusion is explicit, strong and sustained over time.
  • Guiding principle 2: Legal and regulatory framework: The legal and regulatory framework underpins financial inclusion by effectively addressing all relevant risks and by protecting consumers, while at the same time fostering innovation and competition.
  • Guiding principle 3: Financial and ICT infrastructures: Robust, safe, efficient and widely reachable financial and ICT infrastructures are effective for the provision of transaction accounts services, and also support the provision of broader financial services.
  • Guiding principle 4: Transaction account and payment product design: The transaction account and payment product offerings effectively meet a broad range of transaction needs of the target population, at little or no cost.
  • Guiding principle 5: Readily available access points: The usefulness of transaction accounts is augmented with a broad network of access points that also achieves wide geographical coverage, and by offering a variety of interoperable access channels.
  • Guiding principle 6: Awareness and financial literacy: Individuals gain knowledge, through awareness and financial literacy efforts, of the benefits of adopting transaction accounts, how to use those accounts effectively for payment and store-of-value purposes, and how to access other financial services.
  • Guiding principle 7: Large-volume, recurrent payment streams: Large-volume and recurrent payment streams, including remittances, are leveraged to advance financial inclusion objectives, namely by increasing the number of transaction accounts and stimulating the frequent usage of these accounts.


Public and private sector commitment, legal and regulatory framework, and financial and ICT infrastructures are the basic foundation that countries need to have in place to be able to expand access to transaction accounts. Designing useful payment and transaction accounts products which are made available through widespread access points, coupled with awareness and financial literacy efforts to inform and educate people on how to select and use them, as well as accelerating adoption of transaction accounts by shifting large volume use cases like wage or social benefit payments into those accounts constitute key elements that will make universal access to and frequent usage of transaction accounts possible.