Payment Systems Reform in Jordan
Project Development Objective (PDO)
This technical assistance project aims to (a) systemically improve important payment systems in Jordan, (b) strengthen the legal and regulatory frameworks for Jordan’s National Payments System (NPS), (c) improve oversight of payment systems, and (d) create an enabling environment for developing innovative payment mechanisms and for rapidly expanding use of electronic payment mechanisms.This technical assistance project aims to (a) systemically improve important payment systems in Jordan, (b) strengthen the legal and regulatory frameworks for Jordan’s National Payments System (NPS), (c) improve oversight of payment systems, and (d) create an enabling environment for developing innovative payment mechanisms and for rapidly expanding use of electronic payment mechanisms.
During the past decade, the Central Bank of Jordan (CBJ) has made significant progress in its implementation of the core infrastructure of the National Payments System (NPS). Jordan implemented the real-time gross settlement (RTGS) system in 2002 and the Automated Clearing House (ACH) in 2007; the bank has also established a payment systems department.
The CBJ’s payment systems strategy from 2013 to 2016 has aimed to (a) leverage innovation in retail payment systems to enable financial inclusion, (b) strengthen the legal and regulatory frameworks for payment and settlement systems, (c) develop and implement oversight arrangements for payment and settlement systems, and (d) implement the new Principles for Financial Market Infrastructures (PFMIs) developed by the Bank for International Settlements’ Committee on Payment and Settlement Systems and the International Organization of Securities Commissions’ Technical Committee.
1. An assessment of the NPS against the PFMIs
The project team is conducting a detailed review of the NPS. The team is also (a) identifying areas to improve the proposed NPS strategy, (b) providing inputs to finalize the NPS strategy, and (c) developing a structured roadmap to strengthen Jordan’s systemically important payment and settlement systems.
2. NPS laws and regulations
The team is drafting measures to strengthen the legal and regulatory frameworks for payment and settlement systems. Proposed measures include a new payment and settlement systems law, as well as new regulations and guidelines.
3. Framework for oversight of payment and settlement systems
The project team is proposing legal and regulatory frameworks for oversight of payment systems. These frameworks outline the tools and organizational arrangements necessary for adequate oversight.
4. National retail payment strategy
A national retail payment strategy will identify actions that, when taken by the government, the business community, and providers of payment services, will enhance the use of electronic payment mechanisms. One key element of such a strategy is leveraging innovation in payment systems to (a) support expanding financial inclusion and (b) spur the rapid expansion of electronic payments.
The main expected outcomes of this project include the following:
1. Improving ratings for all legal, regulatory, and oversight indicators for NPS development
2. Enhancing awareness of and capacity to implement the PFMIs
3. Developing legal and regulatory frameworks that are conducive to leveraging innovations in
4. Shifting government and corporate payments from cash and checks to electronic payment
5. Increasing the volume of payments in the RTGS and the ACH