2024-06-24 Payments BB Meeting notes

Discussion of next steps for the Payments Building Block (PBB)

@Mauree, Venkatesen

• The group discussed expanding the PBB to include additional payment scenarios beyond G2P and P2G. The goal is to update the specifications for the next release to reflect any necessary changes. The group acknowledged that they already have a candidate solution for G2P and P2G and expressed a desire for additional candidate solutions for the building block. They also discussed the journey of updating the specifications and finding suitable solutions.

Payment scenarios beyond G2P (Government to Person) and P2G (Person to Government):

@David Higgins

The group identified three main payment scenarios to focus on:

• B2G (Business to Government): This includes payments made by businesses to the government, such as taxes, fees, loan repayments, fines, and customs duties. The discussion also touched upon cross-border payments and the potential need for multi-currency support in certain scenarios.

• G2B (Government to Business): This includes payments made by the government to businesses, such as grants, subsidies, loan disbursements, and COVID support payments. The possibility of using vouchers for targeted spending was also considered.

• G2G (Government to Government): This includes payments between government entities, both within a country (e.g., between ministries) and across borders (e.g., international aid). The complexities of G2G payments, such as budget allocations, invoicing, and cross-border transactions, were acknowledged.

• James Dailey cautioned against getting into technical details too early in the discussion, emphasizing the need to first establish a shared understanding of the problem.

• David Higgins agreed, viewing the current slide deck as a starting point to define the problem before delving into technical specifications and solutions.

• James Dailey suggested creating detailed, real-life scenarios for each payment type (G2B, B2G, G2G) to ensure a comprehensive understanding of the payment flows and potential challenges.

• David Higgins agreed and proposed using flow diagrams to map out these scenarios, which would then be used to identify gaps in the existing specifications.

Examples Given for G2B, B2G, and G2G Payments

• G2B (Government to Business):

  • Loans: The government provides loans to businesses with the expectation of repayment, potentially with interest. This could cover various types of loans, such as agricultural loans, small business loans, or infrastructure loans.

  • Allowances: The government makes conditional payments to businesses based on specific criteria. An example is an agricultural allowance where a farmer receives a payment per hectare of wheat grown.

  • Unconditional Payments: The government provides payments to businesses without any conditions attached. Examples include disaster relief payments or COVID-19 support payments to help businesses recover from unexpected events.

  • Rebates and Repayments: The government makes payments back to businesses, such as tax rebates or refunds for overpayment of fees.

  • Subsidies: The government provides financial support to businesses to promote specific activities or industries. An example could be subsidizing renewable energy companies to encourage the adoption of clean energy sources.

• B2G (Business to Government):

  • Loan Repayments: Businesses repay loans previously received from the government, including principal and interest payments.

  • Taxation: Businesses pay various taxes to the government, such as corporate income tax, sales tax, or property tax.

  • Services: Businesses pay for government services, such as permits, licenses, or fees for using public infrastructure.

  • Fines: Businesses pay fines for non-compliance with regulations or laws.

  • Customs Duty: Businesses pay taxes on goods imported or exported across borders.

• G2G (Government to Government):

  • Internal Transfers: Payments between different government departments or ministries within a country. For example, the Ministry of Finance transferring funds to the Ministry of Education for educational programs.

  • Intergovernmental Payments: Payments between different levels of government, such as national to local government transfers or payments between countries for international aid or development projects.

Mastercard's potential contributions to cross-border payments:

Mastercard expressed interest in contributing to the PBB, particularly in the area of cross-border payments. They offered to share their API specifications and use case repository with the group. The discussion highlighted the need to identify specific cross-border payment use cases and determine the endpoints (e.g., bank accounts, wallets) for these transactions. Mastercard confirmed their capability to handle payments pushed to them by government institutions.