Detailed Questions on E-Payments Regulatory Policy

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Detailed Questions on e-Payments Regulatory Policy

This document is intended to help organizations understand the local regulatory environment when evaluating the suitability of e-payments.

Standards set by international bodies require implementation into local laws in order for the standards to be enforceable domestically. These standards, when adopted and enforced, mitigate some of the risks associated with payment transactions.

Key overarching questions to consider when examining regulatory policies around inclusive financial services and electronic money are as follows:

1. What is the local regulation governing Know Your Customer Requirements (KYC) on bank accounts?

2. What types of identification are required for customers to open bank accounts, and what is the level of official identification penetration?

3. What types of entities (i.e. bank branches, banking agents) are allowed to process KYC requirements and open accounts for customers?

4. What Anti-Money Laundering (AML) or Counter Terrorism Financing (CTF) regulations are in place that dictate transaction volume and amount limits on accounts?

The following are questions that will help your organization establish a stronger understanding of country specific regulations around electronic payments.

Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations/standards

What recommendations, if any, is the central bank implementing from the Financial Action Task Force standards (FATF)[1]?
With respect to mobile money, does the mobile network operator providing the service comply with FATF, or at least the standards set by GSMA which include things like limits on accounts and transactions, monitoring transaction frequency, and implementing automated tracking of transaction flows on a system level. GSMA standards can be accessed here.

Supervisory system

What is the status of the central bank's ability to monitor and examine the condition of banks and their compliance with laws and regulations?
Is there an annual report?
Does the central bank regulate the minimum amounts of capital held by banks and other financial institutions?

Consumer Protection

Does the central bank enforce consumer protection standards?
Are there regulations and clear rules on deposit insurance?
Is there transparent pricing for products?
What redress measures exist for consumers to report and/or dispute claims of fraud?

E-Money Regulation

Is there a clear and separate regulation on electronic money?
How mature is this regulation?
Are there circulars that are still in the legislative process, or are they part of law?
Are there specific regulations for both prepaid cards and mobile money?

[1]Financial Action Task Force (FATF): Multinational body endorsed by theInternational Monetary Fund, World Bank, and United Nations, as theinternational standard-setting body for anti-money laundering (AML) andcombating the financing of terrorism (CFT) safeguards. Specific FATFrecommendations include preventative measures such as customeridentification and transaction recordkeeping requirements. Can be accessed here.

Note: This Toolkit is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of NetHope and do not necessarily reflect the views of USAID or the United States Government.