so cost efficiently, lie at the very heart of efforts to increase inclusion. the right channels can also create emotional connections, not just geographical ones. making it easier for borrowers to connect with financial institutions in ways that they feel comfortable with, can build affinities with financial institutions which in turn, encourages participation and timely repayments. mobile banking is an excellent example. the portability, affordability and ubiquity of mobile gadgets effectively put a bank in everyone ’ s pockets today. the numbers are telling. half the global population use mobile internet. we spend 4 hours on the phone and use 12 apps in a single day. the tremendous success of mobile banking in africa has been hailed as a transformative platform for greater financial inclusion. if providers leverage digital platforms well, finance can literally be at the fingertips of the unbanked. leveraging on digital platforms can also create a virtuous cycle. over time, such platform providers will accumulate a wealth of data on customer preferences and behaviour. this can in turn drive drive analysis for new product offerings in the future. this is of course, highly contextual and an effective delivery strategy will likely differ across countries, communities and cultures. innovation – serving real needs while managing associated risks whether we like it or not, the world of finance is rapidly moving into uncharted waters. there are tremendous opportunities in innovations that can be tapped to develop and expand microfinance, but also real risks to be appreciated. this includes risks associated with the disintermediation of finance, a borderless society and cyber threats to name a few. it is important that we understand and manage these risks as we steer microfinance forward, to ensure we are doing so boldly but not blindly. there will be many lessons we can learn from those who are here at this symposium. these are individuals with rich experience in the microfinance industry, whose successes and failures in developing unique product offerings and new business models will be equally instructive. the global financial crisis may be a decade past, but one of its key lessons remain true – finance and its innovation must exist to serve real needs. the costs of financial failures are disproportionately higher for the poor and for this reason, there should be a higher burden to 2 / 3 bis central bankers'speeches ensure that experiments in microfinance are careful and purposeful. over the next few days, we will be exploring these themes in greater depth. as we look forward

8 terminals per thousand inhabitants. based on a report published by the world bank and the imf in 2013, the higher merchant discount rate or mdr paid by merchants, averaging between 1. 5 % to 2. 5 % when accepting payment card transactions, had the impact of pricing out smaller merchants. lack of effective competition in the payment card industry had led to higher costs for payment card transactions, which would in turn raise costs for businesses and consumers. over a period of 14 months from may 2013 to june 2014, interchange fee, that is the wholesale fee paid between banks in a payment card transaction, were hiked several times. as interchange fee is priced into the mdr, the hikes in interchange fee contributed towards an increase in the mdr for merchants. a lack of price transparency and the overall competition further weakened market pressure to lower interchange fee and mdr. bis central bankers ’ speeches the highly concentrated market also discouraged merchants from switching to another payment card network given concerns over losing significant competitive advantage if they did. clearly, left unchecked, such indiscriminate interchange fee hikes risked bringing about a broad - based increase in mdr which would in turn be passed on to consumers through higher retail prices of goods and services. to curb indiscriminate increases in payment card acceptance cost and foster a competitive payment card market, bank negara malaysia implemented the payment card reform framework in july 2015. under the framework, the interchange fees are subject to objectively - set ceilings, while a market incentive structure was instituted to strengthen the incentives for investments in payment card infrastructure. in addition, measures were also introduced to enhance transparency and competition by prohibiting restrictive trade practices. the results of such measures are very encouraging. these reforms have had an immediate and positive impact on the payment card landscape. the cost of payment card acceptance had started to moderate whilst the annual growth of payment card terminals had tripled from 5. 4 % in 2014 to 18. 1 % in 2015. in addition to promoting effective competition within the payment industry, it is also important to preserve the neutrality of payment and settlement systems. this includes neutrality among instruments and geo - political interests. this is especially true for global and critical market infrastructure providers such as swift where the offer of services to all parts of the world should be guaranteed and reliable. the emergence of other service providers to fill any void should it happen, would be most unfortunate as it could diminish efficiencies gained from access to global market infrastructures