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Public financial management and the digitalisation of payments

Research report

Written by Marco Cangiano

Research report

The ability of digital payments to deliver better outcomes for governments, businesses, and individuals, including driving financial inclusion, has been one of the success stories of the digital age.

Payments are central to how governments transfer and receive financial resources; however, the way such payments are made – and how they could be made more effectively – is often not mainstreamed in public financial management (PFM) despite the fact that many of the direct benefits from effective digitalisation of payments are identical to those traditionally expected from strong PFM systems.

The digitalisation of payments does not provide a silver bullet for solving PFM problems; therefore it needs to be approached in an integrated way, with strong leadership from central agencies, including ministries of finance, to exploit the synergies between the many different types of payments facilitated by digital technology. This paper explores the linkages between the digitalisation of payments and PFM through case studies in India, Mexico, Estonia and Ghana.

Marco Cangiano, Alan Gelb, Ruth Goodwin-Groen