Learning Objectives:

  • Explain the concept of “open payments” and interoperability.

  • Understand the role of the Interledger Protocol.

8.1 The Problem of Fragmented Payment Systems

The Interledger Foundation’s initiative highlights a fundamental problem with today’s payment landscape: it is deeply fragmented . Most merchants must accept a mix of cash, credit cards, debit, and other digital payment methods, each requiring different technical capabilities and standalone integrations. The result is a “fragmented, costly, and slow global payments ecosystem where money that could settle in seconds instead takes days” .

8.2 Open Payments and Interoperability

“Open payments” refers to a vision of payment systems that are interoperable—able to work together seamlessly regardless of provider, institution, or border. The Interledger Foundation’s Interledger Protocol (ILP) is an open-source network that “enables any currency to move freely across institutions and borders without the limitations characteristic of the current patchwork financial system” . When deployed at scale, ILP could serve as the foundation for digital public infrastructures (DPIs) similar to India’s UPI and Brazil’s Pix, but with cross-border capabilities .

8.3 Educating the Next Generation

The Interledger Foundation’s university partnerships aim to “build the next generation of payments leaders who understand where today’s financial systems fall short and how to build something better with open finance” . Participating institutions include The Hague University of Applied Sciences, which is launching “an interdisciplinary course bridging finance, law, and technology—the first effort to build a European talent pipeline in open payments education” .

8.4 The Future of Payments

The University of Melbourne course concludes with “the future of payments – an outline of the cashless society” . The HKU course covers “Trends of e-payment and crypto-currencies and their impact, advanced/emerging technologies, case studies” . The future of payments is likely to be shaped by:

  • Interoperability: Systems that work together seamlessly across providers and borders.

  • Digital Public Infrastructure: Shared payment rails that reduce friction and lower costs.

  • Digital Currencies: CBDCs, stablecoins, and other forms of digital money.

  • Artificial Intelligence: AI-powered payment routing, fraud detection, and personalization.

 

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