Fintech Notes

Growing Retail Digital Payments: The Value of Interoperability

By Alexander Copestake, Divya Kirti, Maria Soledad Martinez Peria

June 25, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Alexander Copestake, Divya Kirti, and Maria Soledad Martinez Peria. "Growing Retail Digital Payments: The Value of Interoperability", Fintech Notes 2025, 004 (2025), accessed June 28, 2025, https://doi.org/10.5089/9798229014250.063

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Summary

Policymakers in many countries aim to increase the uptake of retail digital payment systems. This Note examines whether interoperability can help achieve this goal. We provide a conceptual framework that explains how interoperability can support the adoption of digital payments by increasing users’ freedom to choose their favorite app. We present evidence consistent with this framework using granular data covering the universe of transactions on India’s Unified Payments Interface (UPI), an interoperable platform that has become the world’s largest retail fast payment system by volume. We find that interoperability has indeed supported adoption, suggesting that promoting interoperability could be a promising policy lever for countries seeking to transition away from cash.

Subject: Digital financial services, Economic sectors, Financial markets, Financial regulation and supervision, Financial services, Fintech, Monetary policy, Money, Payment systems, Public sector, Technology

Keywords: App transaction value, Closed-loop payment system, Digital financial services, Fintech, Global, Interoperability, Networks, Payment systems, Payment transaction, Payments, Public sector, Transaction volume, UPI, UPI system, UPI transaction value overtime

Publication Details

You May Also Be Interested In...

The Sequencing and speed of Reforms in Transition Economies: Implications for the Case of Uzbekistan

June 27, 2025

Digital Payment Innovations in Sub-Saharan Africa

June 27, 2025

Union of the Comoros: Fourth Review under the Extended Credit Facility Arrangement and Request for Modifications of Performance Criteria and Waivers of Nonobservance of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for the Union of the Comoros

June 27, 2025

Integrating Fragmented Networks: The Value of Interoperability in Money and Payments

June 27, 2025