The Fragmentation Problem
Across the Pacific, mobile money operators have built impressive individual platforms. M-PAiSA in Fiji, the digital wallets in Vanuatu, the Our Telekom wallet in Solomon Islands, and the various mobile money services in Samoa and Tonga — each is a functioning, scaled platform within its own market and on its own network. But in most Pacific markets, a customer on one network cannot send money to a customer on a different network without both parties going through a cash-out and cash-in process that is slow, expensive, and defeats most of the purpose of digital money. And across international borders — sending from your Fiji M-PAiSA wallet to a Samoan mobile money account — the friction is even greater. This fragmentation is not a minor inconvenience. It is a structural limitation on the Pacific's financial infrastructure that limits the utility of mobile money for regional trade, for inter-island family support, and for the regional economic integration that Pacific leaders have identified as a priority.
Why Interoperability Is Hard
The technical challenge of mobile money interoperability is well understood and largely solvable. The harder challenges are commercial and regulatory. From a commercial perspective, a dominant mobile money operator has limited short-term incentive to interoperate with competitors. Interoperability reduces switching costs, which reduces the value of the operator's installed customer base. The network effect that makes large mobile money platforms valuable is partly a product of the friction that users face in sending money to users on other networks. From a regulatory perspective, interoperability requires coordination between multiple regulators — central banks with different legal frameworks, different technical standards, and different risk tolerances. The Pacific has no regional payments regulator equivalent to the European Central Bank, which mandated SEPA interoperability across the Eurozone. Each Pacific central bank makes its own decisions, and coordinating those decisions across seven or eight jurisdictions is a genuinely complex diplomatic and technical exercise.
The Fiji Model
The Reserve Bank of Fiji's decision to require M-PAiSA integration into the national payment system in 2024 is the most significant Pacific interoperability achievement to date. By mandating that M-PAiSA connect to the same payment rails as the banking system, the RBF created the first instance of genuine interoperability between a Pacific mobile money platform and the formal banking sector. The practical effect is that an M-PAiSA user can now transfer money to any bank account in Fiji in near real time, and receive money from any bank account in near real time. This is the foundational infrastructure on which multi-operator interoperability could be built. The Fiji model also demonstrates that interoperability is achievable through regulatory mandate rather than commercial negotiation. The RBF's decision removed the commercial incentive problem. For the Pacific's multi-operator markets, the same regulatory mandate approach is the most realistic path to genuine interoperability.
A Pacific Payments Protocol
The long-term solution to Pacific payment fragmentation is a Pacific Payments Protocol — a set of technical and regulatory standards that allows any Pacific mobile wallet to transact with any other, across networks and across borders. This is not a new idea. The BIS Committee on Payments and Market Infrastructures has done extensive work on cross-border payment interoperability standards, including ISO 20022 adoption as a global messaging standard. Several Pacific central banks are members of the BIS CPMI. The technical foundation exists. What does not yet exist is the Pacific-specific implementation framework — the translation of global standards into a Pacific regulatory compact that commits Pacific central banks to shared technical requirements, shared AML/CFT standards for cross-border transactions, and shared dispute resolution mechanisms. Building this compact requires a convening organisation with the credibility and relationships to bring Pacific central banks, mobile money operators, and development finance institutions together. The Pacific Islands Forum, the Asian Development Bank's Pacific operations, and Australia's DFAT are the natural conveners.
Australia's Role in Pacific Interoperability
Australia has both the motivation and the capability to play a leading role in Pacific payment interoperability. The motivation is direct: lower-friction Pacific payments reduce remittance costs for the hundreds of thousands of Pacific workers in Australia, reduce transaction costs for Australian businesses operating in the Pacific, and strengthen the economic integration between Australia and its Pacific neighbourhood. The capability is real: Australia's payment infrastructure — NPP, OSKO, the Consumer Data Right — represents some of the most sophisticated real-time payment architecture in the world. The technical expertise that built and operates these systems is directly applicable to the Pacific interoperability challenge. A concrete Australian contribution to Pacific payment interoperability could take several forms: funding for the development of a Pacific Payments Protocol through DFAT's development programme, technical assistance from the Reserve Bank of Australia to Pacific central banks working on their own payment system modernisation, and regulatory cooperation between AUSTRAC and Pacific AML authorities on the cross-border transaction monitoring standards that interoperability requires.