Developing a National Payment System Strategy in Lebanon
Project Development Objective (PDO)
This project aims to improve Lebanon’s observance of international standards for systemically important payment systems (specifically, the Principles for Financial Market Infrastructures developed by the Bank for International Settlements’ Committee on Payment and Settlement Systems and the International Organization of Securities Commissions’ Technical Committee). This project also aims to strengthen the legal and regulatory frameworks for Lebanon’s national payment system (NPS), and, in particular, to create an enabling environment for the development of retail payments, including the modernization of government payments. Last, this project aims to strengthen the oversight framework for the NPS.
The Bank of Lebanon (BDL) is seeking technical assistance in developing a national payment system (NPS) strategy to guide the development of Lebanon’s payment and settlement systems across the next five years.
During the past few years, the BDL has made significant progress in implementing all the core system components of an NPS—the real-time gross settlement (RTGS) system (implemented in July 2012), the Automated Clearing House (started in May 2013), and PayGov for government payments (started in May 2013). Across the next few years, the BDL intends to refine the design of these systems and other aspects of the NPS, including implementing the recently established Principles for Financial Market Infrastructures (PFMIs).
The main outputs of the technical assistance follow.
1. National payment system strategy
The project team is taking stock of the NPS against (a) the PFMIs for Lebanon’s systemically important payment systems, (b) the World Bank guidelines for both retail and government payments, and (c) the Committee on Payment and Settlement Systems–World Bank General Principles for International Remittance Services. Through the stocktaking exercise, the team is identifying areas of improvements and ultimately designing Lebanon’s national payment system strategy.
2. Payment system oversight framework
The project team is enabling the BDL to effectively oversee the NPS through (a) development of an oversight policy; (b) various tools such as licensing, data collection, and on-site inspections and audits of payment service providers; (c) oversight procedures; and (d) necessary internal and external arrangements for the BDL, including cooperative arrangements with other regulators.
3. Legal and regulatory frameworks for the national payment system
The project team is assisting in drafting specific legal measures to improve the legal and regulatory frameworks for the NPS. These frameworks may include a payment and settlement systems law as well as enabling regulations.
Specific targeted outcomes are as follows:
1. Strengthening risk management, governance arrangements, operational procedures for
systemically important settlement systems; improving compliance with PFMIs
2. Improving existing and developing new regulations, policies, processes, and infrastructures to
modernize government payments and to promote the growth of innovative payment services
3. Adopting oversight arrangements that outline clear objectives, powers, and responsibilities of
the relevant organizational units; adopting oversight policies, standards, and tools