It is midafternoon in Suva, the busy port capital of Fiji, and Fatala Roma is waiting patiently in line at a Digicel retail store, a local mobile network operator and telecommunications company.

Roma, who works as a cleaner in a nearby office, has come to Digicel to deposit money to her MyCash wallet, a mobile app that allows users to have electronic money available at their fingertips.

With a deft swipe to her smart phone, Roma can now send much-needed cash home to her mother, the caregiver of Roma’s three-year-old daughter, who live two hundred kilometers away on Fiji’s second largest island, Vanua Levu.

In the past, Roma sent remittances home via her bank account. The manual transaction would take a few days, she says. “Now, as soon as I hit ‘send,’ [the money] goes straight to my mom.”

Modernizing Fiji’s digital payments landscape – making money transfers faster, more secure, and affordable – is the latest building block in a series of financial reforms that are improving the day-to-day lives of Fijians while also strengthening the investment climate of this remote Pacific Island nation.

The reforms allow Fiji’s banks and payment service providers to work together seamlessly and avoid the use of manual, time-consuming, error-prone procedures to transfer money. Built upon new legislation implemented with the guidance of IFC and the World Bank, the reforms reduce Fiji’s dependence on cash and will progressively eliminate the use of checks. They also open the market to alternative payment methods, particularly those offered by local fintech players and mobile phone operators.

In a country that relies on tourism as its biggest earner – the most-visited country in the South Pacific, tourism accounts for up to 40 percent of Fiji’s GDP – the modernization of Fiji’s payment system not only brings greater choice to local consumers, but to international visitors too.

“The whole world is moving fast, and we don’t want to be left behind,” says Ariff Ali, the Governor of the Reserve Bank of Fiji (RBF), the country’s Central Bank. “Tourists who come to Fiji want a payment system that is on par with global standards. Modernizing our payment system is a way that the Central Bank, together with Fiji’s financial system, can help bring more efficiency and productivity into the economy.”

“Now, as soon as I hit ‘send,’ [the money] goes straight to my mom.”

Fatala Roma, Suva, Fiji.

Steps towards a cash-free future

On the sixth floor of one of the tallest buildings in downtown Suva, the windows of the Reserve Bank of Fiji look out onto the cloud dappled backdrop of Suva harbor.

It was in this office that Praneel Prasad, project manager for the RBF's national payments system, oversaw the modernization of the country’s e-payment structure. The four-year long project unwittingly began on the first day of Fiji’s mandatory Covid-19 shutdown in April 2020, forcing the restructuring to be initially conducted almost entirely online.

At the time, Prasad says, Fiji’s reform of its digital payment infrastructure was a step behind other emerging economies. While the country already had a functioning Real Time Gross Settlement System (RTGS) – the digital scaffolding that allows banks to transfer funds between one another – Fiji’s system needed improvement.

This sluggish pace and dependence on cash has impacted small businesses, says Aaron Mayes, the soft-spoken manager of Supercuts, a bustling barber shop in the center of Suva.

Located on the second floor of a busy shopping mall, Supercuts mostly accepts cash but does offer customers the chance to pay via Vodafone’s digital e-wallet, M-PAiSA.

“It’s much more convenient to transfer money electronically to the bank.”

Aaron Mayes, Supercuts Manager, Fiji.

“It’s much more convenient to transfer money electronically to the bank,” says Mayes, who says that the new reforms will offer small businesses like Supercuts an opportunity to become cashless.

“Handling cash can be quite difficult. E-payments are much safer,” Mayes adds. “We don’t have to rush to the bank. That saves us time. Time that we can use to work.”

When drafting the new legislation, Prasad says, the first step was to create an e-payment system that would not only include existing banks but also open up the space to new technologies and non-banking players to drive financial inclusion.

"We needed a level playing field for everyone, regardless of whether they were an existing player, or a new player," he says.

“The system is also helping to expand the network of places across Fiji where people can deposit money and pay for goods and services. This is about making it easier and more convenient for the people of Fiji, and visitors, to access a safe, affordable, faster and trusted e-payment system,” says Charlotte Darlow, the High Commissioner for New Zealand.

Sameer Chand, who began his career working with the RBF, is now an operations officer for IFC based in Suva. At the time, Chand was working with IFC to help central banks in other Pacific Island nations undertake similar reforms.

When Governor Ali raised the possibility of modernizing the country’s e-payment system, Chand and his colleagues at both IFC and the World Bank in Suva knew how to help.

“Our goal was to help build a sustainable electronic payments ecosystem.”

Sameer Chand, IFC Operations Officer, Fiji.

“This is a classic One World Bank Group solution because the e-payments modernization team was comprised of experts from both institutions,” Chand says. “Our goal was to help build a sustainable electronic payments ecosystem.”

“The RBF had the option of going to any multilateral development partners", he adds. “But I feel that they chose IFC and World Bank because we brought years of knowledge, expertise and experience in implementing such projects."

Neighboring governments also stepped in. Under the Fiji Partnership – which aims to improve the competitiveness of the private sector and stimulate inclusive and climate-smart investment across Fiji – the governments of Australia and New Zealand provided essential support.

“Economic reform is a shared priority between Fiji and Australia under our Vuvale Partnership. Enabling financial institutions to transfer funds to each other, in real time, creates the foundation for new and innovative digital payment products and services,” says Clair McNamara, the Deputy High Commissioner for Australia.

“This means Fijian customers, regardless of who they bank with, can access payments much faster than before.”

Timely payments improve day-to-day life

In February 2021, the government of Fiji introduced the first of two new regulatory frameworks to enable the growth of digital payments.

Across the island’s banking sector, the results are immediately evident. In a country highly dependent on remittance flows, the annual number of transactions made electronically through Fiji’s RTGS amounted to more than 2 million between August 2023 and July 2024. This is compared to nearly 150,000 during the financial year ending July 2019.

“[Before] we were processing a lot of these transactions manually,” Prasad remembers. “If you wanted to transfer $100 FJ from Bank ‘A’ to Bank ‘B’, it would take a minimum of at least a day. Now, thanks to the new legislation and payment system, it takes less than thirty seconds for those banks that have implemented straight through processing.”

The new enabling environment also opened the door to innovative new players in the payments landscape, such as fintechs and Mobile Network Operators, to reach the most vulnerable communities in Fiji.

Mereia Volavola is the CEO of Solé, a fintech platform launched in 2022 to provide financial services to indigenous Fijians, a population that has historically faced barriers accessing formal financial services.

“At the end of the day, many indigenous people are still banking underground. By that, I mean they are literally putting their money into holes in the ground and under their mattresses because they still have difficulty opening a bank account,” Volavola says.

Solé is a play on a Fijian word – 'Solesolevaki' – that reflects an indigenous Fijian tradition whereby communities come together in times of crisis and celebration to pool money. The platform offers a digital budgeting and savings app with 20 pre-set ‘buckets’ that allow users to allocate and lock funds for different purposes including utilities, savings and investments.

Now, thanks to Fiji’s new National Payment System legislation, Solé has been invited to enter the traditional banking system, allowing it to reach unbanked and underserved segments of the indigenous population.

"Our underlying motive was to build and improve the financial empowerment and independency of our indigenous population,” says Volavola. “We want the upcoming generation to develop a culture of savings rather than a culture of consumption.”

“This is particularly important in a country so susceptible to a lot of natural disasters,” she adds.

“If you wanted to transfer $100 FJ from Bank ‘A’ to Bank ‘B’, it would take a minimum of at least a day. Now, thanks to the new legislation and payment system, it takes less than thirty seconds for those banks that have implemented straight through processing.”

Praneel Prasad, Reserve Bank of Fiji

With Fiji sitting on the front lines of climate change – severe cyclones routinely batter the region, and dozens of villages across the archipelago are at risk of going underwater – reforming the country’s e-payment system also offers the government a chance to improve their ability to respond to climate change-driven disasters.

Timely payments, particularly during emergencies or disasters, are not just critical, says Governor Ali, but life-saving too.

“You really don’t want to tell people who have been affected by a natural disaster, or people who have social welfare payments, to come and collect cash,” Governor Ali says. “At a time when our country is facing this enormous threat, Fiji’s new e-payment regulation is really improving lives.”

Located nearly 2,000 miles east of Australia, amid azure seas, Fiji, which has more than 300 palm-fringed islands and a population of 900,000, is highly susceptible to the impacts of climate change. Reforming the country’s e-payment system also offers the government a chance to improve their ability to respond to climate change-driven disasters.