Landmark Payment System Reforms to Support Economic Activity and Boost Financial Inclusion

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Suva, Fiji, February 11, 2021 – Everyday transactions will be made easier and faster under reforms being introduced by the Reserve Bank of Fiji (RBF) that will modernize the nation's financial system, in turn supporting small business and individuals and promoting inclusive economic development.

The Fijian Parliament today passed the National Payment System Act, paving the way for a reform program that's set to boost access to affordable payment services through digital solutions, driving financial inclusion while also reducing reliance on cash. Transactions will be made more efficient and safer for businesses and households alike under the legislation that also creates the enabling environment for enhanced electronic fund transfers, retail payments and agent banking in addition to introducing an upgraded national payment and settlement system.

The reform program, being overseen by the RBF, is expected to take two years. The reforms will also see the RBF introduce critical payments, clearing and securities infrastructure and enable the development of innovative digital payment services with due regard for risk mitigation and consumer protection.

"Sound, safe and efficient payment solutions will be extremely useful for businesses and households both in urban and rural areas," said RBF Governor Ariff Ali. "Providing this platform is critical for fostering digital payment solutions that will increase access to financial services for micro, small and medium enterprises, and women, as well as offer modern innovative solutions for government payments and social transfers."

IFC, a member of the World Bank Group, with the support of the governments of Australia and New Zealand as well as the World Bank, has provided technical expertise to the RBF in relation to this landmark reform. This latest development follows similar reforms undertaken by central banks in Papua New Guinea, Samoa, Solomon Islands and Vanuatu that promote responsible and inclusive digital financial services in the Pacific.

In Fiji, the use of existing electronic payment mechanisms and services is currently limited, with cash widely used in retail payments and in many types of business-to-business transactions, including bill payments.

The reforms, to be implemented in phases, will allow financial and payment service providers to develop and introduce non-cash payment services and products for their clients in a faster and secure manner and at lower costs.

"The National Payment System Act allows for the emergence of new payment mechanisms based on digital and innovative solutions that can serve a larger portion of the population, including those in areas that are either underserved or completely locked out of the current financial system," said Deva De Silva, IFC Resident Representative to Fiji, Kiribati, Samoa, Tonga, and Tuvalu. "This legislation and the reforms make it possible to align Fiji with advanced financial markets," he said.

The reforms will also allow for high-value transfers between financial institutions to be settled in real-time, automated clearing of retail payments, enable instant fund transfers, and facilitate innovative FinTech, including mobile payment solutions.   

Fiji Partnership
IFC's work in Fiji is supported by the governments of Australia and New Zealand under the Fiji Partnership to unlock private sector investment, promote sustainable economic growth and boost shared prosperity in Fiji.

About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

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