💰How much does it cost to build DPI?

DPI does not have to be expensive to build!

It is famously said,

"Building DPI requires deep conviction and not deep pockets."

Some DPI cost the taxpayer almost nothing!

When people talk about 'Digital Public Infrastructure', they typically imagine large-scale national ID projects, or digital payment networks. While these both are critical aspects of DPI, they are not the only options. Many of DPI blocks in fact are small +1 components that can be added on to existing infrastructure in the country to convert them into high-functioning population scale resources. DPI can also be updated to existing standards and protocols that allow the market to function more effectively and inclusively.

If a country adopts a standard and orchestrates its adoption by the ecosystem, it can drive an interoperable open network for various capabilities such as - for data sharing (for credential issuance schema, or for registry access APIs, or for consented personal data sharing); or for discovery and fulfilment (publication of open APIs for government services including filing taxes; open standards for discovery of any good or service (such as BeckN); or payments (publishing interoperable QR standard for market to follow; cash in cash out standard for interoperable cash withdrawal). Once the new standard is agreed upon, then the team in charge just has to review the existing standards and publish a paper outlining the update.

This is a 3-4 week process with little additional technical implementation cost for the government.

Other digital public Infrastructure can be brought to life in a country in two ways:

1. Greenfield DPI implementations: when the entire infrastructure is built from scratch through a fresh private procurement route

2. Rapid DPI upgrades: when existing infrastructure is enhanced with +1 blocks to convert them into powerful DPI. For example, converting an existing physical or digital ID or document into a digitally verifiable identity by including a digitally signed QR code on it, or converting a large database into a registry by opening up its APIs for others to use.

The costs associated with both these approaches can vary significantly

1. Greenfield systems from scratch

The cost of building a national ID enrolment/registration and database management infrastructure, for example, under the first approach would be a multi-million dollar investment plus some fixed costs of maintaining the system.

Similarly, the startup cost to build a P2P / P2M payment system from scratch would typically be less than 7 million (plus maintenance costs annually), requiring investments from a consortium of banks if a payment switch operator is driving it (or by the central bank if they choose to operate it themselves). These costs typically have an extremely high RoI as mature payments systems move billions of dollars in commerce monthly/annually.

2. Rapid Upgrades to existing Digital Assets

Yet most countries aren’t starting from scratch. Improvements to existing fast payments rails to support payments systems to operate as DPI (e.g. by inserting a QR code specification to make existing wallets and payment providers interoperable; upgrading the API specifications to allow third party app payment initiation; introducing a standard mode of authentication for third party apps to complete payments; creating multi-party dispute resolution via open APIs; etc. could cost only a few hundred thousand dollars for the entire project (including tech and program costs) depending on the design and other variables.

Countries often already have some type of physical or digital infrastructure in place and hence fall under the second category for most DPI implementations.

Based on our costing model, “Conversion” DPI building blocks such as verifiable credentials (data sharing), ID auth / eSign / eKYC (layers on top of ID), G2P mapper (payments / social benefit delivery) would typically require around $750k +/- 15% (depending on the country context) over six months to roll out a high value and reusable DPI at scale when built on existing systems.

Extending or deepening the implementation to add additional use cases over a 12 month period (illustrating the multi-domain impact of DPI) could cost around $1.3 Million (+/- 15%) in total. The costs of augmenting national P2P/P2M payment systems varies more based on the scope/capabilities of the existing system.

In case countries wish to build these blocks to demonstrate quick wins with powerful last mile benefits, they could also consider the DaaS Program and receive support from private philanthropic sources and open source DPI packages necessary to roll-out these capabilities.