This is a clear entry point and a good opportunity for both public and private sectors to coordinate their efforts. 1.6 Despite their inherent weaknesses, automated teller machines, debit cards, automated clearing house networks and credit cards have reached critical mass. However, smart cards and some e-cash systems, electronic bill payments and person-to-person internet payment methods are yet to catch up. Accessibility, but at a high price, can also put off people from opting to use such payment methods or instruments. Similarly, if there are no service providers to facilitate transactions, card usage cannot be made popular and people may continue to use cash, as they are uncertain whether the substitute or new instrument is as accessible as the old ones. Despite inherent inefficiencies of cheques, they are still popular due to easy accessibility, although the regulators keep worrying about the systemic risks involved in cheques. That’s why, in the recent past, India, Sri Lanka, Singapore and many others have introduced cheque imaging or fully automated cheque clearing processes. Given the reduced time from t+5-7 to t+1-2 and facilities at regional level, in Sri Lanka, people now tend to use more cheques compared to cards or electronic payments, which is a worry. The public policy objectives of payment system development thus demands that we allay the fear of non-accessibility and, where possible, offer appropriate incentives to users to move out of paper-based inefficient instruments. 1.7 Preserving the public policy goals is easier where the regulator is also the retail payments service provider.
The optimal mix depends on the level of development of the financial market, but a more active role has to be played by the authorities to achieve the public policy objectives of retail payment reforms. 4.3  Policy elements  4.3.1 Central banks to play a catalytic role: Central banks should be at the centre, take the leadership and coordinate the development process as other stakeholders tend to have vested interests. While it is important to enhance oversight and supervisory functions by the central banks and ensure that governance arrangements for infrastructure and service providers are in place, it is also necessary to ensure that such arrangements do not lead to unnecessary restrictions on competition and innovation. 4.3.2 Stakeholder participation: It is essential that central banks engage in effective participation and secure cooperation from all stakeholders in the payment systems, through establishing National Payment Councils (NPC) or National Payment Committees/Advisory Councils etc. India, Sri Lanka, Pakistan and some others have already established NPCs and they are the highest level policy making authorities for development of national payment systems. Banks have a good opportunity to give their inputs at these meetings, especially on operational matters. 4.3.3 Declare public policy objectives of retail payment system development: The undeclared and unsaid public policy objectives have been a contributory factor for ad hoc retail payment system developments in the past.