Title: Global Payment Systems Index - a measure of development of payment systems across countries

Authors: Ashutosh Upadhyay; Kalluru Siva Reddy

Addresses: Central Office, Reserve Bank of India, Shahid Bhagat Singh Road, Mumbai – 400001, India ' Gokhale Institute of Politics and Economics, Pune – 411004, India

Abstract: Development of efficient payment and settlement systems is a policy priority for the central banks and governments in all countries; however, the literature lacks a comprehensive measure to evaluate the extent of development of these systems across the countries. This paper tries to bridge this gap by constructing a Global Payment System Index (GPSI) to gauge the level of development of payment and settlement systems across countries. GPSI is a multidimensional index constructed with four dimensions, viz cashless payments, large value payment systems, enabling infrastructure, and currency in circulation. Dimensions are derived by indicators such as number of transactions per inhabitant, value of transactions as a percent of GDP, and annual growth rate in the volume and value of transactions/other indicators. GPSI derives a number between 0 to 1 for each country, where 0 indicates un/underdeveloped payment systems, while 1 indicates highly developed payment systems in a country.

Keywords: payment systems; central banking policies; index numbers and aggregation; multi-dimensional index; normalised Euclidean distance.

DOI: 10.1504/IJEBANK.2024.139911

International Journal of Electronic Banking, 2024 Vol.4 No.4, pp.417 - 439

Received: 01 Aug 2023
Accepted: 23 Mar 2024
Published online: 09 Jul 2024 *

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