IMF Working Papers

Fintech Payments in Public Financial Management: Benefits and Risks

By Gerardo Uña, Alok Verma, Majid Bazarbash, Naomi N Griffin

February 3, 2023

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Gerardo Uña, Alok Verma, Majid Bazarbash, and Naomi N Griffin. Fintech Payments in Public Financial Management: Benefits and Risks, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Fintech payments leverage large digital platforms to fill gaps in the traditional payment system. They have made great strides in increasing access to payment services in several countries around the globe. At the same time, like any innovation, the new payment models are exposed to risks in their operating environment. We review the main fintech payment models (mobile money, internet-based fintech payment, and digital money) and discuss operational and financial risks as well as challenges they face. We then explore how public financial management (PFM), especially treasury payments and non-tax revenue collections, could benefit from fintech payments by providing examples of early fintech applications in different countries and discuss the challenges of integrating them into the public sector. The use of fintech in public finance could bring various benefits—including strengthening fiscal transparency, improving budget planning and execution, and upgrading cash management—if public sector institutional and technological capacities are strengthened and risks are adequately mitigated.

Keywords: Budget systems, Financial management information system, Financial technology, Fintech, Payments, Public financial management

Publication Details

  • Pages:

    36

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2023/020

  • Stock No:

    WPIEA2023020

  • ISBN:

    9798400232213

  • ISSN:

    1018-5941