newer standards, impact on domestic card networks ( cost of certification, access to new standards / technology etc. ). should the regulators be involved in standard setting so that there is a level playing field for both international and domestic entities? 14. for large value payment systems, regulatory arbitrage is sought to be addressed through international common standards and principles. how can similar concerns be addressed for retail systems with system - wide importance as the extant standards are either region - specific or country - specific? one area where there is ample scope for common standards is the areas of security in electronic payments. for instance, taking card payments once again, while on the one hand europe has the emv standard already implemented, usa is still continuing with magstripe. so where does this leave other emerging countries such as india? we are striving to move towards emv but are aware that magstripe cards will be around for some time. though we have strengthened our card transactions domestically bis central bankers ’ speeches using 2fa with magstripe cards, there are still jurisdictions where magstripe is still in vogue but without 2fa requirements. hence, such arbitrage opportunities need to be addressed by adopting minimum common security standards. 15. despite several efforts at addressing the issues relating to international remittances ( for instance, the world bank has prescribed certain guidelines ), challenges pertaining to reducing the cost of remittance and addressing the aml / fatf issues ( lack of standards, legal and regulatory requirements between remitting and receiving countries is being exploited ) continue to persist. since it is a recognised fact that international remittances form a significant channel for cross - border payments, and form major part of gdp of few countries, the need for common standards and principles in this area would also be welcome. 16. the lack of international standards in retail payments could also affect the interoperability between these systems – both at a domestic level as well as at international level. at a domestic level, currently in india, we are facing a challenge in promoting interoperability amongst the non - bank and bank operated payment systems. while considering the access of non - banks to inter - bank payment network, the challenges that need to be addressed are in terms of lack of standardisation of form factors, message formats, non - adoption of international standards for card security such as pci - dss etc. 17. at the same time, in india, we have also seen the

advantages that standardisation can bring in, for facilitating inter - operability and contributing to the growth of certain payment systems. right at the outset, the mobile banking guidelines issued in india prescribed certain standards for mobile banking message formats to ensure interoperability in transactions. going forward, the npci implemented the imps for mobile banking facilitating inter - operable mobile banking transactions in the country. this has given a very good impetus to instant funds transfer on 24x7 basis using mobile banking. 18. so clearly there is a case for developing international standards and principles for cross border payment systems at the minimum. but the issue would be how to enforce such standards. 19. then the issues related to home country and host country regulatory prescriptions also need to be addressed, with minimal scope for regulatory arbitrage. the final thought i have on this issue is besides international standards and principles, has the time come for “ co - operative oversight " for internationally pervasive retail payment infrastructures? iii. what are the key considerations to be followed while innovating retail payment systems? 20. the first thought that comes to my mind when i consider this question, the remarkable foresight of the ecb in coming out with the document on minimum safety recommendations to improve online payment security to be implemented by 2015. i also want to acknowledge the seminal guidelines issued by the ecb on data quality. both are outstanding documents. 21. to me, the thumb rule for any central bank has to be encouragement of innovations. but before innovations become a " product " of system wide importance, standards need to be put in place. otherwise, there would be bigger issues to reckon with. ( eg : cloud computing in the financial sector, rules for payment gateways, security standards for mobile banking or enabling nfc based payment instruments are some of the examples that come to my mind. ) but be conscious that what is good for goose may not be good for the gander ( mature systems vs. emerging systems ). 22. the need and focus of innovations may vary significantly among countries – between countries with developed / mature payment systems and those where payment systems are evolving. bis central bankers ’ speeches 23. while safety and security are underpinnings of any innovation, in emerging payment system jurisdictions, the key consideration for innovations may revolve around accessibility, availability, affordability etc. whereas in mature / developed payments market, the focus may have shifted towards convergence of payment channels and real - time payments. 24. another