Public Financial Management and the Digitalization of Payments

© © Bill & Melinda Gates Foundation
Public Financial Management and the Digitalization of Payments


Joint report by the Better Than Cash Alliance, the Center for Global Development, and the Overseas Development Institute, building on work with the International Monetary Fund in 2017.

The ability of digital payments to deliver better outcomes for governments, businesses, and individuals—including driving financial inclusion—has been one of the success stories of the digital age.

Payments are central to how governments transfer and receive financial resources. Many of the benefits from effective digitalization of payments are very similar to those traditionally expected from strong Public Financial Management (PFM) systems. However, the way such payments are made—and how they could be made more effectively—is often not mainstreamed in PFM. This is a missed opportunity.

The digitalization of payments does not provide a silver bullet for solving PFM problems. Therefore, it needs to be approached in an integrated way, with strong leadership from central agencies, including the Ministry of Finance, to exploit the synergies between the many different types of payments facilitated by digital technology. The paper explores the linkages between the digitalization of payments and PFM, including through the following four case studies: India, Mexico, Estonia and Ghana.