Greater financial sector security and
innovation on the way under new project
SYDNEY, March 4, 2019 – People in Samoa, Solomon Islands and Vanuatu
will soon be able to make and receive payments digitally, rather than relying
on cash or cheques, in a major step forward for payment systems, paving
the way for more people to have access to financial services.
Work will begin this year, starting in Samoa, to modernize payments systems
in the three countries, which will see banks connected with their central
banks in country, allowing for the electronic transfer of payments.
“The planned moves will bring greater security to the financial sector,
spur innovation and hopefully bring new players into the market,” said
Governor Enari of the Central Bank of Samoa. “By upgrading the
systems, banks will no longer need to manually check their balances. With
a digital system, they will be able to operate in real time, a move essential
to preventing potential liquidity crises in the system.”
Under the Pacific Payments Project, by the International Finance Corporation,
IFC, and its sister organization, the World Bank, an Automated Transfer
System (ATS) will be set up allowing banks to be connected with their respective
central bank and with each other, for the electronic transfer of payments.
The ATS system will be hosted and managed in each country by the central
The introduction of an ATS will bring Samoa, Solomon Islands and Vanuatu
into line with other countries in the region, including Papua New Guinea
and Timor Leste, which already have or are establishing similar systems.
“Samoa, Vanuatu and Solomon Islands are virtually among the last remaining
countries in the world where the central banks and the financial entities
are not linked across an infrastructure of digital payment systems,” said
Michel Kerf, World Bank Country Director for Papua New Guinea and the
“All this modern infrastructure helps make the financial sector more efficient
and secure, and also more inclusive, as it allows for innovations such
as cashless electronic payments,” said Thomas Jacobs, IFC Country Manager
for the Pacific Region. “With remittances so important in the Pacific,
the new system will also help increase efficiencies in the remittance market,
as money transfer operators will be able to transfer monies within countries
in a less complex way.”
A key part of the ATS system, the Real Time Gross Settlement, allows the
clearing and settlement of large systemically important payments by banks
in a real time, designed to prevent liquidity crises in the banking system.
The second key part of the system, the Automated Clearing House, will help
with retail payments from people, companies and from the government via
electronic means. The system will also be open to non-bank service providers
to offer e-wallets and other cashless solutions, while opening the possibility
of governments being able to progressively make all payments digitally.
A separate Central Securities Depository system for all securities in the
three countries will also be established, which will enable government-issued
bonds or bills to be dealt with electronically and connected to the ATS
system for settlement.
The work by IFC and the World Bank will help business and people harness
the benefits of digital financial services and promote greater financial
inclusion. Supporting responsible and inclusive digital financial services
is a key part of IFC’s strategy in the Pacific.
The project, funded by the governments of Australia and New Zealand, is
part of the joint IFC-World Bank Finance Competitiveness and Innovation
Global Practice work.
IFC’s work in the Pacific is guided by the Pacific Partnership. Australia,
New Zealand and IFC are working together through the Partnership to stimulate
private sector investment and reduce poverty in the Pacific.