anita angelovska bezhoska : shaping payments innovation speech by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the 15th conference on payments and market infrastructures, ohrid, 29 - 30 june 2023. * * * your excellences, dear ms. van dijk, distinguished speakers, ladies and gentlemen, it is always a privilege and a pleasure to address you at our traditional conference on payments and market infrastructures. an event, organized in collaboration with the dutch central bank, a successful partnership that lasts for fifteen years. therefore, this year we mark an important anniversary. and i have no doubts that celebrating this occasion, while contemplating on the cutting - edge payment innovations, will be much more memorable in the surrounding of the iconic beauty of ohrid, a city whose breathtaking architecture speaks of creativity and innovations of past civilizations. as the dutch writer, a friend of the city of ohrid said, " in fact, it is worth going from paris to the balkans just to see ohrid. what a magnificent location on that steep hill! and the town, an extraordinary mixture of customs and centuries... ". creativity or using original ideas to create something new, and innovations, which is introducing new things, are more than ever features of our societies. the ongoing fast wave of digitalization is having wide - ranging effects on many segments of our lives. it has been transforming public and private services, making them more accessible and convenient to consumers, contributing to higher inclusion. more broadly, it means improving the wellbeing of economies as finance, knowledge and data become more widely available. particularly rapid are technological innovations in financial services, with the payment industry being at the forefront. current and future trends in payments innovations and implications for central banks will be the focal point of my address. innovations in payments rest on three main pillars ( world bank, 2022 ). the first one relates to the changes of the links between payments and accounts. for example, for a long time, access to payment services was dependent on access to bank account. the so - called pre - paid concept ( e - money ) broke the exclusive link between payments and bank accounts. the second pillar rests on the changes in the way payments are processed ( payment systems ) – we observe proliferation of fast payments, distributed ledger technologies, qr codes, digital ids etc. and the third pillar relates to the changes in the way consumers interact with

payments with growing accumulation of customers data and tools for analysis. innovations along these three pillars are redefining business models of payment providers with far reaching effects on the very structure of the payments market. this means, entrance of non – banking providers, stronger competition, costs reduction and real time payments as a new " must have " feature in payment services. seems that banks as incumbents have also benefited from competition pressures, modernizing and sophisticating their payment infrastructure. in fact, digitalization of banking is not a new phenomenon. it has been here for more than 30 years, although this last wave is of unprecedented scale. yet, the market is transforming, which is also visible through the 1 / 4 bis - central bankers'speeches change in the revenues sources of banks. according to mckinsey global payments report, payments revenues of banks are declining, as standardization, technology and regulatory pressure for open banking allows for new entrants and pressures on profit margins. the consequence of this payments overhaul is shift from cash, checks and paperbased credit transfers to digital payments, especially contactless and fast payments whose value and volume reached historically highest levels. according to red book statistics, in the last decade the annual average number of digital payments per person increased from 179 ( 2012 ) to 332 ( in 2021 ). in a similar vein, the global world bank findex database, points that the percentage of adults who made / received digital payments increased from 44 % in 2014 to 64 % in 2021. these trends are evident in the macedonian economy as digital payments per person more than tripled during the last seven years. in addition to more convenient, cheaper and faster payment services, digitalization has been conducive to rising financial inclusion. in 2021 compared to a decade ago, the percentage of adults holding a bank account increased globally from 51 % to 76 %. in the macedonian case, this indicator is set above the global average at 85 %, compared to 74 % ten years ago. apparently, we do see fast and profound changes in the financial industry that inevitably affect central banks in many ways. on the one hand, we operate, regulate, supervise and oversee payment systems that are important for the overall financial stability, the transmission of monetary policy, and for the confidence in the currency, eventually. as innovation in finance does not only bring benefits but risks as well, central banks must ensure that risks are contained and do not impair financial resilience and traditional mandates of central banks. on the