Building a User-Friendly Interface for Central Bank Digital Currency Applications: A Case Study

In this article, I want to share my experience designing the interface of a retail CBDC application. Perhaps these technologies will soon compete with traditional online banking around the world. Therefore, this case study may interest developers from traditional fintech and the field of cryptocurrencies. I will tell you about a ready-made application for the Solomon Islands, but we have already launched similar applications or are launching them in several other countries. What is the central bank's digital currency? CBDC is digital money issued by the central bank, in other words, a digital version of banknotes and coins. They can be used for retail or wholesale transactions. Retail CBDCs are designed for households and businesses to make payments for everyday transactions, while wholesale CBDCs are designed for financial institutions and operate similarly to central bank reserves. Retail CBDC can be distributed using a variety of models. Under the interim model, the central bank issues CBDCs and manages the main infrastructure, while financial intermediaries offer services to customers. The fully retail model assumes that the central bank provides a full range of services, including creating and maintaining retail applications for working with CBDC. What is a CBDC for? The main advantages of the CBDC implementation for the central bank are the reduction of costs associated with the circulation of physical money, increased control over financial flows (including for tax purposes), as well as the possibility of switching to innovative tools to stimulate the economy and social support. Such as “colored money” that needs to be spent only on a certain category of goods or money with an expiring date, encouraging you to spend it now rather than deposit and invest. The advantages for a retail client are the ability to open and maintain a free personal account without the participation of a private intermediary (bank or payment system), reducing the cost and increasing the speed of transaction execution thanks to a single nationwide system, increasing the security of funds storage and transfers. Such an account is not linked to a bank and does not depend on the stability of a private company, and when implemented via the blockchain, it is better protected from hacker attacks or equipment malfunctions. CBDC implementation tests are currently being conducted in most countries of the world, and somewhere these tools are already fully working. The implementation of this technology is particularly successful in small countries with poorly developed financial infrastructure (for example, Pacific Island States). There, CBDCs are becoming a substitute for physical money for retail payments, an alternative to foreign banks, and a means of cross-border transfers. The development of these technologies in the region is faster than in the rest of the world. And, perhaps, this experience will be useful to the creators of such applications for central banks of larger and richer countries. What are the features of CBDC applications? If we try to briefly characterize the application, then it is something in between a crypto wallet and a banking application. According to its purpose (storing fiat money and making retail payments) and the audience (the entire population), it is rather closer to banking applications or payment systems like Revolut or Wise. But according to business requirements, it is more like a crypto wallet, because the main thing here is to make the most simple and convenient tool for the end user, and not to maximize the company's profit through the sale of additional banking services and receiving a percentage of payments. Business requirements According to the requirements, the application most resembles a crypto wallet. The main task is to involve the maximum number of users in the use of CBDC, ideally all citizens of the country. To do this, you need to make the most convenient and simple tool for performing basic operations, and conservative branding that causes maximum trust. An important part of this task is to attract the least well-off and financially illiterate citizens, because it is their lives that we want to improve first of all, and only then think about the more affluent segments of society, who may already be bank customers and use non-cash payments. At the same time, it is important to optimize development costs, because they are paid not from the company's profit, but from the state budget. Target audience Here we have the main difference from crypto wallets, which are created with the expectation of technically advanced users. The target audience of CBDC applications is as wide as possible: from grandmothers to schoolchildren, from ordinary villagers to small business owners. Moreover, it is the people who are farthest from technology who are the most important users. They are the ones we need to teach and inspire to use digital money. Thus, an inverted pyramid is obtained, if compared with both conventional banking applications and crypto wallets: first of all, you need to think about the poorest and far from technology people. So if we describe the characters, then they could be: an elderly woman from a rural area who receives a pension from the state; a local farmer who sells crops at the market; a temporarily unemployed young man without education. It is very important to make the entry threshold as low as possible, even for those who have never used anything like this before and have only dealt with paper money. When developing, you also need to focus on old phones with small screens, and count on poor connection quality. User scenarios There are few basic scenarios for the first version of the application: receive money or send it to another user of the system, pay for purchases using a transfer or QR code, withdraw money to a bank account, view transaction history. In addition, there is a registration process, verification, and access restoration, as well as an application settings screen. Branding and UI The main objective of the visual design of the application was to increase user confidence. This was done by using the official state symbols — the colors of the national flag and a reference to the design of banknotes in the background ornament of the main page. The name of the “Bokolo Cash” application was proposed by the SI central bank and means the name of the traditional means of payment of local tribes — figurines carved from specific shells. It is also used as the logo of both the SI Central Bank and the CBDC application. The color scheme is neutral, with blue for the buttons and monochrome for everything else. The process of registering a new user To lower the entry threshold, we use a two-step account creation process. At the first step, you just need to specify and verify your phone number and you can immediately start using the application: receive and send money, pay with a QR code. But only within a small monthly limit. To increase the limit to the standard one, you need to go through the KYC process (specify the ID data, take a picture with the document, and wait for confirmation from the verifier). This solution allows you to expand your audience faster, including at the expense of those who are afraid to trust their personal data or have difficulty working with complex interfaces. After trying the stripped-down version with a small limit, the user becomes more motivated to sign up than if they were required to do so before getting acquainted with the system. In addition, this approach allows you to start working immediately after registration, without waiting for the administrator's actions (the basic version does not have an automatic document verification widget). In addition, we have optimized all registration steps to complete the process as quickly as possible. For example, we made an automatic creation of a username that the system generates from the first and last name, and added a password strength check before sending. Main screen and basic functions When logging into the application, the user sees everything they need: their balance, four large buttons for basic actions, and a link to the transaction history. About the same as the average crypto wallet. It was decided not to display the transactions themselves on the main page, so as not to load the system and the Internet connection, and speed up the loading process of the main screen. The application is designed to work with poor Internet and on weak phones, so this is important. In the first version of the Solomon Islands app, only one account is available — a debit account in the local currency (Solomon Islands dollar). But in the future, it is possible to add other currencies and accounts, I will consider these cases later. The action buttons are made large so that it is convenient for inexperienced users with poor eyesight, since there is a lot of space on the screen. They are also multicolored, which increases the contrast between them, simplifies orientation with constant use, and allows you to quickly provide technical support by telling the user on the phone that you need to press a button of a certain color. This solution is often used in payment applications in Asia and shows good results. Account and transaction history The main action buttons are repeated on the account page and the transaction history is displayed. This logic of page construction has proven itself well in crypto wallets, where the account does not have as much additional information as in banking applications. The type, counterparty, and amount are specified for the transaction. An analysis of user cases showed that the main task for most users on this screen is to make sure that the transaction has passed, view several recent transactions, view the details of one of the recent transactions and send someone her receipt. Here we have a great advantage of a blockchain-based system, because all transactions are completed and confirmed almost instantly (and not for several hours and days as in international payment systems) and their parameters never change over time. There is also a transaction search function. We eliminated the complicated and expensive functions of labelling transactions with seller logos and generating infographic statistics at this stage of development in order to save budget. Sending money and paying by QR code To send money, you need to specify the user's username in the system, usually consisting of a first and last name, or a phone number by which the system will find this username. Or scan the QR code sent by the addressee, where there is already a username and the transfer amount, if it was specified by them. All these ways of sending funds are, technically, the same function of sending via a username, however, for the convenience of the user, we have separated these operations and made two different buttons both on the main screen and on the account page. The process is made linear, with sequential indication of the addressee, amount, and confirmation. The alternative option, when there is only one screen and opening blinds for selecting parameters, we considered less suitable, because for an inexperienced user, it could become more difficult to master. Receiving a transfer To request a transfer, it is enough to generate and send a QR code to the sender. You can also specify the amount and add a description there. This is easier than regular bank transfers, where you need to specify and double-check the details, or crypto-wallets, where you need to insert an address and enter the amount separately. In our case, the person requesting the payment generates and shows/sends one picture and only needs to scan/upload it and confirm the transfer. This speeds up and simplifies the payment process, which is especially convenient for small shops and catering establishments — they just need to print and paste their QR code on the counter and inform the buyer of the amount. Or generate a code on your phone with the already specified amount for each customer. Of course, you can give the sender a username or ask for a transfer by phone number, but practice has shown that requesting money using a QR code is the most popular. Passing the verification process An unverified user who has completed only the first step of registration is asked to complete KYC by showing this offer on the main screen and on the account page. We point out that the verification process will increase the limit and allow you to fully use the application for large transfers. To do this, you need to upload your selfie with the document, specify all its data and send a request, after which you will have to wait for the manual processing of the application by the verifier. While waiting for a decision, the application can continue to be used within the same minimum limit. Withdrawal of money to a bank account The application has the ability to withdraw money to your bank account. This is a feature for more advanced users, including sellers. Here you need to select a bank from the list, specify the account number and amount. It may take longer for the system to complete this transaction, so an appropriate explanation screen has been made. Using multiple currencies or accounts, exchanging money In the basic version of the application, it is assumed that only one account in the local currency will be used in the application. However, it is also possible to create any number of digital assets, including those linked to foreign currencies. Usually, for most small countries, these are two currencies (their own and the US dollar), so I will consider in most detail the dual-currency modification of the CBDC application. In this version, another account with a second currency appears on the main screen, the action buttons become smaller and are arranged in a row, another function appears — currency exchange, and another tab in the menu — transaction history, where all transactions for all accounts fall. If there are more than two accounts, the appearance of the main page changes — instead of two bars, we show a horizontal carousel with all currencies/accounts. In addition to updating the main page and account pages, the sending/receiving/withdrawal screens are also changing, where a currency selection is added. Working on UX-bugs after a test run The pilot launch of the application, held in the capital of the Solomon Islands, the city of Honiara, involved employees of the central bank, their family members, and several catering and retail outlets. In a few days of using the application in real conditions, we have collected a large amount of useful information, including several shortcomings in the field of user experience. A new method of research proved to be excellent for us — we asked the bank's employees to videotape the operation of all the functions of the application several times in order to make a promo video of it later. Thus, they did not even know that they were participating in testing when they transferred money and paid for purchases, and behaved more naturally. One of the identified problems was the screen that appears after a successful transaction. Our success screen didn't look optimal. It was too similar to the previous confirmation screen and appeared too quickly, because transactions in the blockchain were almost instantaneous. Many users did not have time to understand what happened, whether the transaction was completed. And they started pressing all the buttons in a row (view the receipt, save to favourites). To fix this, we modified the transaction success screen to make it more different from the previous ones, added a small delay and a more complex transition animation. As the new testing showed, this completely solved the problem. The second problem was with the KYC process. Statistics showed a high failure rate. After a detailed analysis of the video and a survey of users, we identified several problems: not all users were familiar with the concept of “selfie with a passport”, which we used, and our too abstract picture did not help to understand what needed to be done. And the names of the fields for entering the document data did not correspond to the old passports of the Solomon Islands. To solve the problem, we redid the instructions - added a more detailed description of what needs to be done and drew a more understandable picture. We have also adjusted the names of the fields in accordance with the documents. In addition, we have fixed some design flaws in other scenarios: we have improved the process of entering the amount when sending, the names of some buttons, and so on. Advanced CBDC Features In addition to these basic functions of the first version of the application, we have laid down several more unique features that the use of CBDC provides. This is an opportunity to receive and spend “colored money” and “expired money”. I will talk about them and other new functions that can be implemented using digital money in the next article. Future The CBDC application described in the article is already successfully operating in three countries, and it is planned to launch in several more. I hope that over time we will make it even more convenient in order to lower the user's entry threshold as much as possible and expand its use so that paper money can be withdrawn from circulation in these countries, which will significantly reduce the costs of the Central Bank, make the economy more transparent and manageable, and give the government new tools to solve the problems of poverty and inequalities. Thanks for your attention. I will be glad if the article will be useful to developers of future CBDC applications. In this article, I want to share my experience designing the interface of a retail CBDC application. Perhaps these technologies will soon compete with traditional online banking around the world. Therefore, this case study may interest developers from traditional fintech and the field of cryptocurrencies. I will tell you about a ready-made application for the Solomon Islands, but we have already launched similar applications or are launching them in several other countries. CBDC What is the central bank's digital currency? CBDC is digital money issued by the central bank, in other words, a digital version of banknotes and coins. They can be used for retail or wholesale transactions. Retail CBDCs are designed for households and businesses to make payments for everyday transactions, while wholesale CBDCs are designed for financial institutions and operate similarly to central bank reserves. CBDC is digital money issued by the central bank, in other words, a digital version of banknotes and coins. Retail CBDC can be distributed using a variety of models. Under the interim model, the central bank issues CBDCs and manages the main infrastructure, while financial intermediaries offer services to customers. The fully retail model assumes that the central bank provides a full range of services, including creating and maintaining retail applications for working with CBDC. What is a CBDC for? The main advantages of the CBDC implementation for the central bank are the reduction of costs associated with the circulation of physical money, increased control over financial flows (including for tax purposes), as well as the possibility of switching to innovative tools to stimulate the economy and social support. Such as “colored money” that needs to be spent only on a certain category of goods or money with an expiring date, encouraging you to spend it now rather than deposit and invest. The main advantages of the CBDC implementation for the central bank The advantages for a retail client are the ability to open and maintain a free personal account without the participation of a private intermediary (bank or payment system), reducing the cost and increasing the speed of transaction execution thanks to a single nationwide system, increasing the security of funds storage and transfers. Such an account is not linked to a bank and does not depend on the stability of a private company, and when implemented via the blockchain, it is better protected from hacker attacks or equipment malfunctions. The advantages for a retail client are CBDC implementation tests are currently being conducted in most countries of the world, and somewhere these tools are already fully working. The implementation of this technology is particularly successful in small countries with poorly developed financial infrastructure (for example, Pacific Island States). There, CBDCs are becoming a substitute for physical money for retail payments, an alternative to foreign banks, and a means of cross-border transfers. The development of these technologies in the region is faster than in the rest of the world. And, perhaps, this experience will be useful to the creators of such applications for central banks of larger and richer countries. What are the features of CBDC applications? If we try to briefly characterize the application, then it is something in between a crypto wallet and a banking application. According to its purpose (storing fiat money and making retail payments) and the audience (the entire population), it is rather closer to banking applications or payment systems like Revolut or Wise. But according to business requirements, it is more like a crypto wallet, because the main thing here is to make the most simple and convenient tool for the end user, and not to maximize the company's profit through the sale of additional banking services and receiving a percentage of payments. Business requirements According to the requirements, the application most resembles a crypto wallet. The main task is to involve the maximum number of users in the use of CBDC, ideally all citizens of the country. To do this, you need to make the most convenient and simple tool for performing basic operations, and conservative branding that causes maximum trust. An important part of this task is to attract the least well-off and financially illiterate citizens, because it is their lives that we want to improve first of all, and only then think about the more affluent segments of society, who may already be bank customers and use non-cash payments. At the same time, it is important to optimize development costs, because they are paid not from the company's profit, but from the state budget. Target audience Here we have the main difference from crypto wallets, which are created with the expectation of technically advanced users. The target audience of CBDC applications is as wide as possible: from grandmothers to schoolchildren, from ordinary villagers to small business owners. Moreover, it is the people who are farthest from technology who are the most important users. They are the ones we need to teach and inspire to use digital money. Thus, an inverted pyramid is obtained, if compared with both conventional banking applications and crypto wallets: first of all, you need to think about the poorest and far from technology people. So if we describe the characters, then they could be: an elderly woman from a rural area who receives a pension from the state; a local farmer who sells crops at the market; a temporarily unemployed young man without education. It is very important to make the entry threshold as low as possible, even for those who have never used anything like this before and have only dealt with paper money. When developing, you also need to focus on old phones with small screens, and count on poor connection quality. User scenarios There are few basic scenarios for the first version of the application: receive money or send it to another user of the system, pay for purchases using a transfer or QR code, withdraw money to a bank account, view transaction history. In addition, there is a registration process, verification, and access restoration, as well as an application settings screen. Branding and UI The main objective of the visual design of the application was to increase user confidence. This was done by using the official state symbols — the colors of the national flag and a reference to the design of banknotes in the background ornament of the main page. The name of the “Bokolo Cash” application was proposed by the SI central bank and means the name of the traditional means of payment of local tribes — figurines carved from specific shells. It is also used as the logo of both the SI Central Bank and the CBDC application. The color scheme is neutral, with blue for the buttons and monochrome for everything else. The process of registering a new user To lower the entry threshold, we use a two-step account creation process. At the first step, you just need to specify and verify your phone number and you can immediately start using the application: receive and send money, pay with a QR code. But only within a small monthly limit. To increase the limit to the standard one, you need to go through the KYC process (specify the ID data, take a picture with the document, and wait for confirmation from the verifier). This solution allows you to expand your audience faster, including at the expense of those who are afraid to trust their personal data or have difficulty working with complex interfaces. After trying the stripped-down version with a small limit, the user becomes more motivated to sign up than if they were required to do so before getting acquainted with the system. In addition, this approach allows you to start working immediately after registration, without waiting for the administrator's actions (the basic version does not have an automatic document verification widget). In addition, we have optimized all registration steps to complete the process as quickly as possible. For example, we made an automatic creation of a username that the system generates from the first and last name, and added a password strength check before sending. Main screen and basic functions When logging into the application, the user sees everything they need: their balance, four large buttons for basic actions, and a link to the transaction history. About the same as the average crypto wallet. It was decided not to display the transactions themselves on the main page, so as not to load the system and the Internet connection, and speed up the loading process of the main screen. The application is designed to work with poor Internet and on weak phones, so this is important. In the first version of the Solomon Islands app, only one account is available — a debit account in the local currency (Solomon Islands dollar). But in the future, it is possible to add other currencies and accounts, I will consider these cases later. The action buttons are made large so that it is convenient for inexperienced users with poor eyesight, since there is a lot of space on the screen. They are also multicolored, which increases the contrast between them, simplifies orientation with constant use, and allows you to quickly provide technical support by telling the user on the phone that you need to press a button of a certain color. This solution is often used in payment applications in Asia and shows good results. Account and transaction history The main action buttons are repeated on the account page and the transaction history is displayed. This logic of page construction has proven itself well in crypto wallets, where the account does not have as much additional information as in banking applications. The type, counterparty, and amount are specified for the transaction. An analysis of user cases showed that the main task for most users on this screen is to make sure that the transaction has passed, view several recent transactions, view the details of one of the recent transactions and send someone her receipt. Here we have a great advantage of a blockchain-based system, because all transactions are completed and confirmed almost instantly (and not for several hours and days as in international payment systems) and their parameters never change over time. There is also a transaction search function. We eliminated the complicated and expensive functions of labelling transactions with seller logos and generating infographic statistics at this stage of development in order to save budget. Sending money and paying by QR code To send money, you need to specify the user's username in the system, usually consisting of a first and last name, or a phone number by which the system will find this username. Or scan the QR code sent by the addressee, where there is already a username and the transfer amount, if it was specified by them. All these ways of sending funds are, technically, the same function of sending via a username, however, for the convenience of the user, we have separated these operations and made two different buttons both on the main screen and on the account page. The process is made linear, with sequential indication of the addressee, amount, and confirmation. The alternative option, when there is only one screen and opening blinds for selecting parameters, we considered less suitable, because for an inexperienced user, it could become more difficult to master. Receiving a transfer To request a transfer, it is enough to generate and send a QR code to the sender. You can also specify the amount and add a description there. This is easier than regular bank transfers, where you need to specify and double-check the details, or crypto-wallets, where you need to insert an address and enter the amount separately. In our case, the person requesting the payment generates and shows/sends one picture and only needs to scan/upload it and confirm the transfer. This speeds up and simplifies the payment process, which is especially convenient for small shops and catering establishments — they just need to print and paste their QR code on the counter and inform the buyer of the amount. Or generate a code on your phone with the already specified amount for each customer. Of course, you can give the sender a username or ask for a transfer by phone number, but practice has shown that requesting money using a QR code is the most popular. Passing the verification process An unverified user who has completed only the first step of registration is asked to complete KYC by showing this offer on the main screen and on the account page. We point out that the verification process will increase the limit and allow you to fully use the application for large transfers. To do this, you need to upload your selfie with the document, specify all its data and send a request, after which you will have to wait for the manual processing of the application by the verifier. While waiting for a decision, the application can continue to be used within the same minimum limit. Withdrawal of money to a bank account The application has the ability to withdraw money to your bank account. This is a feature for more advanced users, including sellers. Here you need to select a bank from the list, specify the account number and amount. It may take longer for the system to complete this transaction, so an appropriate explanation screen has been made. Using multiple currencies or accounts, exchanging money In the basic version of the application, it is assumed that only one account in the local currency will be used in the application. However, it is also possible to create any number of digital assets, including those linked to foreign currencies. Usually, for most small countries, these are two currencies (their own and the US dollar), so I will consider in most detail the dual-currency modification of the CBDC application. In this version, another account with a second currency appears on the main screen, the action buttons become smaller and are arranged in a row, another function appears — currency exchange, and another tab in the menu — transaction history, where all transactions for all accounts fall. If there are more than two accounts, the appearance of the main page changes — instead of two bars, we show a horizontal carousel with all currencies/accounts. In addition to updating the main page and account pages, the sending/receiving/withdrawal screens are also changing, where a currency selection is added. Working on UX-bugs after a test run The pilot launch of the application, held in the capital of the Solomon Islands, the city of Honiara, involved employees of the central bank, their family members, and several catering and retail outlets. In a few days of using the application in real conditions, we have collected a large amount of useful information, including several shortcomings in the field of user experience. A new method of research proved to be excellent for us — we asked the bank's employees to videotape the operation of all the functions of the application several times in order to make a promo video of it later. Thus, they did not even know that they were participating in testing when they transferred money and paid for purchases, and behaved more naturally. One of the identified problems was the screen that appears after a successful transaction. Our success screen didn't look optimal. It was too similar to the previous confirmation screen and appeared too quickly, because transactions in the blockchain were almost instantaneous. Many users did not have time to understand what happened, whether the transaction was completed. And they started pressing all the buttons in a row (view the receipt, save to favourites). To fix this, we modified the transaction success screen to make it more different from the previous ones, added a small delay and a more complex transition animation. As the new testing showed, this completely solved the problem. The second problem was with the KYC process. Statistics showed a high failure rate. After a detailed analysis of the video and a survey of users, we identified several problems: not all users were familiar with the concept of “selfie with a passport”, which we used, and our too abstract picture did not help to understand what needed to be done. And the names of the fields for entering the document data did not correspond to the old passports of the Solomon Islands. To solve the problem, we redid the instructions - added a more detailed description of what needs to be done and drew a more understandable picture. We have also adjusted the names of the fields in accordance with the documents. In addition, we have fixed some design flaws in other scenarios: we have improved the process of entering the amount when sending, the names of some buttons, and so on. Advanced CBDC Features In addition to these basic functions of the first version of the application, we have laid down several more unique features that the use of CBDC provides. This is an opportunity to receive and spend “colored money” and “expired money”. I will talk about them and other new functions that can be implemented using digital money in the next article. Future The CBDC application described in the article is already successfully operating in three countries, and it is planned to launch in several more. I hope that over time we will make it even more convenient in order to lower the user's entry threshold as much as possible and expand its use so that paper money can be withdrawn from circulation in these countries, which will significantly reduce the costs of the Central Bank, make the economy more transparent and manageable, and give the government new tools to solve the problems of poverty and inequalities. Thanks for your attention. I will be glad if the article will be useful to developers of future CBDC applications.