from convenience, this leads to a significant increase in the security of the payment process, allowing the use of biometric data for customer identification. on the occasion of the forthcoming review of the second payment services directive, a comprehensive assessment of the impact of strong customer authentication on the level of payment fraud is to be carried out. opportunities are also being explored for the use of electronic identification and certificate - based solutions to meet the requirements for strong customer authentication at account login and initiation of payment transactions. mobile technologies with the advancement of technologies, the smartphone is being established as an increasingly universal tool capable of combining a wide variety of functions. nowadays the smartphone is also 1 / 3 bis central bankers'speeches becoming a tool for initiating payments. this is possible thanks to services like digitalisation of payment cards, the use of digital wallets, and mobile banking applications. in recent years, work has been done towards the potential use of smartphones as devices for receiving physical card payments. this has become possible due to technical 2 these standards1 developed by the payment card industry security standards council. standards allow the use of nfc - enabled mobile devices, such as smartphones and tablets, for accepting contactless payments and also for the payer to enter a pin code on the screen of the mobile device. thus, mobile devices are becoming a sort of software pos terminals capable of accepting payments with payment cards and other payment instruments integrated into the mobile phone. we also already have payment service providers that offer this software pos service. this will make contactless payments easier and more convenient to the customers and merchants in bulgaria. another new possibility is a payment transfer via telephone conducted between accounts with payment service providers where a mobile telephone number is indicated instead of an account number, based on a technology that allows linking the telephone number to the iban account number. this service is also already offered on the bulgarian market. all this follows the trend of increased usage of mobile payment solutions in europe. open banking the new payment initiation and account information services, regulated by the second payment services directive, create conditions for implementing the so - called ‘ open banking ’. this allows the entry of new participants in the payments market and the development of innovative services as well as value - added customer solutions. in order to comply with the regulatory requirements, the banks in europe, including those in bulgaria, preferred to choose the development of dedicated interfaces, known as ‘ application programming interfaces ’ or ‘ apis ’, to the possibility of modifying their client interfaces for access

the rugged geographical terrain of the country makes access to financial services difficult for the semi - formal, informal and the rural population. in our endeavours to bring out financial services to these sectors, the bank of papua new guinea in collaboration with the asian development bank, the national government and ausaid established the “ wau microbank ” under the micro finance project. the pilot project is slowly growing into a viable complementary player in the development of the financial system. in addition, the png micro finance limited, which obtained a banking license in 2004, and has operations in ncd, western and oro province. the micro - finance industry development is a meaningful way of mobilizing savings and servicing a large section of the community to whom financial facilities are not readily available. the government has also introduced the district treasury roll - out program, which will further complements the provision of financial services in the rural parts of papua new guinea. this entails the provision of treasury, banking and post office services from one outlet mainly at local and district levels. the bank of papua new guinea is also supportive of the government ’ s initiatives to promote export driven economic growth strategy through removal of impediments to trade and investment. in recognition of this initiative, the bank liberalized the foreign exchange control regime by freeing up controls in all but ( 4 ) areas which are : • opening of foreign currency or kina accounts offshore by residents ; • approval for capital transaction contracts ; • gold export licenses ; and • approval for dealing in foreign exchange. in addition, borrowing restrictions on domiciled foreign companies were removed to encourage growth in lending. to date, consistent with the banks expectation, the liberalization has had limited impact on the balance of payments position of the country. this is the result of a close and ongoing dialogue and communication between the stakeholders and the bank of papua new guinea. macroeconomic outcome the end result of the financial sector reforms and the other reforms in aggregate have resulted in political and macroeconomic stability. the current government will serve a full term in office, which is a first of its kind since independence. the reforms have also helped to achieve macroeconomic stability as reflected by the lower annual headline inflation of 4. 6 percent in 2005, compared to 21. 8 percent in 1998, stable exchange rate at around us $ 0. 3240, high international reserves of us $ 770 million that is sufficient for 7 - 11 months of import cover, and a strong growth in private sector credit at an annual rate of