Legal environment governing payment system is sound: Group

A TECHNICAL review team developing a financial strategy for the country says the regulatory and legal environment governing the national payment system is sound.
The review undertaken by a group of experts is supported by the Government, Bank of Papua New Guinea and World Bank.
Consultant Bruce White who presented the proposed financial sector development strategy said the observation was made in national payment strategy (2015-2018).
He said an overall supervisory payment system was needed. “In terms of the development of a payment system, not only do you have appropriate strategy in place but also on the whole is good,” White said.
He said there was bilateral arrangements between big financial players such as commercial banks “which make the smaller financial service providers have a competitive disadvantage because the bigger you are, the more powerful you become.”
“The small institutions find it a little bit harder to excess the payment system in an interoperable kind of way under the existing arrangements,” he said.
“Putting in place a central switch system would enable all of the financial operators to access the services to have access to the payment system.”
According to a report: Bank of Papua New Guinea has powers to regulate and oversee the National Payment System and licensing mechanism for system operators and service as well as others.
providers The  PNG  financial  sector  has
grown  significantly  and  whilst  the  current  payments  system  operates  reasonably  effectively
Bank  of  Papua  New  Guinea  has  rec
ognised  that  it  is  now  time  to  address  a  cohesive
approach  on  overall  system  design  to  reduce  costs,  improve  efficiency,  maintain  safety  and
stability.”