Instant payment systems are becoming an increasingly important part of national financial infrastructure. Once governance structures are established and technical standards adopted, those choices can become difficult to change later. That makes the early design phase particularly important. 

That is why the Interledger Foundation supported the Alliance of Digital Finance and Fintech Associations (AllianceDFA) and Contigo Global with a public policy activation grant to conduct the research behind Questioning Instant Payment System Design Inclusivity, a cross-market assessment drawing on the experiences of 129 practitioners across more than 20 countries in Africa, Asia, and Latin America and the Caribbean.

The short version of what they found: instant payment systems are frequently designed with inclusion as a stated goal, "but frequently are designed in ways that inhibit inclusion in practice. Not because of bad intentions, but because of structural choices made early, and often made without the people most affected having any voice in the room.

What we believed going in

The Interledger Foundation exists because we think financial infrastructure should work for everyone. The Interledger Protocol was designed from the start to be open and interoperable, so that no single institution could control the rails. That instinct reflects something we believe deeply: when you centralize control over payment infrastructure, you centralize who benefits from it.

Instant payment systems are supposed to be different from the legacy arrangements they replace. They are supposed to be faster, cheaper, and open to a broader range of providers. In many markets, they have delivered on the technical side. Money moves in real time. But technical speed and structural inclusion are not the same thing.

We wanted to understand the gap between those two things, and we thought AllianceDFA, with its network of 42 national and regional fintech associations, was the right partner to do that honestly. Sarah Corley, their CEO, had the local relationships and the trust of practitioners on the ground. Nandini Harihareswara of Contigo Global brought rigorous analytical frameworks around instant payment system design and governance. Together, they could surface what actually happens when a fintech in Tanzania or a microfinance institution in Nepal tries to connect to their country’s payment rails.

What the research by AllianceDFA found

The findings are organized around five areas, but the underlying story is consistent across all of them.

First, the economics rarely work for smaller players. Participation in an instant payment system carries real costs for all participants: scheme membership fees, compliance obligations, consumer marketing, and the technical work of integration. These costs exist even for direct participants. When fintechs and non-bank providers cannot connect to the instant payment system directly and must instead go through sponsor banks, those challenges are amplified further. Those banks control pricing, set their own rules, and in some cases delay settlement even when the underlying system settles multiple times per day. The layered costs and lack of transparency that indirect participants face make it even harder to build a sustainable business on top of the infrastructure.

Second, licensing and regulatory frameworks were designed for a different era. In several markets, the approval process for a non-bank payment provider takes two years or more. That timeline can consume startup capital before a business ever goes live. The problem is not that regulation exists; it is that regulatory requirements have not kept pace with the expanding range of financial institutions now offering services to consumers, and are too rarely proportionate to the actual risk profiles and business models of non-bank providers.

Third, governance is where the most consequential decisions get made, and where non-dominant players are most systematically excluded. Instant payment system governance boards in most markets are dominated by incumbent banks. The rules they write, the standards they set, the features they prioritize… all of this reflects their interests. As one practitioner put it, it becomes an exclusionary cycle.

Fourth, the consumer experience is inconsistent and sometimes actively works against adoption. Many consumers are simply unaware that instant payment options exist, or do not understand how they compare to other payment methods on cost and speed. Some banks also bury the low-cost payment option in their apps to steer customers toward more profitable products. Without mandatory branding and UX standards at the scheme level, this happens quietly and at scale.

Fifth, the technical integration process is punishing for organizations with limited engineering resources. Documentation is incomplete, APIs are fragmented, and updates arrive with little notice. Non-dominant players end up dependent on sponsor bank timelines rather than moving at their own pace.

Why this matters for financial inclusion

The institutions most affected by these barriers are often the ones closest to underserved communities. Fintechs serving rural populations, microfinance institutions working with women entrepreneurs, payment providers building for informal sector workers: these are the organizations that get squeezed out when the economics don’t work or the governance table has no seats for them.

The difference between financial inclusion and financial health is about whether individuals can merely access a digital payment, or whether there are providers well positioned to serve the individual affordably and responsibly. We take that a step further. Can such a financial service provider build a viable businesses on top of shared infrastructure? At the Interledger Foundation we believe that when those providers are structurally constrained, the people they serve feel it.

What we hope happens next

This research is not a blueprint, but it is a foundation. It identifies where the pressure points are and, importantly, shows that variation exists. Some markets have made deliberate choices to open access, proportionalize requirements, and mandate inclusive governance. The gap between those markets and others is political and institutional more than it is technological.

Ultimately, we supported this research because we think the evidence matters. Policymakers, instant payment system operators, central banks, and development partners all have leverage over these outcomes. The window for getting the foundational design right is open, but as the report notes, it is narrowing.

At the Interledger Foundation, our role is not to control how payment systems are built. Our role is to advocate for the conditions under which open, interoperable, inclusive infrastructure can thrive. This research is part of that work. We thank AllianceDFA for their comprehensive report.

Read the full report here.