RE: “Why we need a regulatory framework for mobile money” (The New Times, July 27).
We do appreciate the writer’s concern over cybercrimes and consumer protection. However, he seems not to be aware of the mobile money regulatory framework in Rwanda.
Mobile Money Operators are classified as Payment Service Providers and are regulated and supervised by the National Bank of Rwanda.
In Rwanda, the Central Bank Law N° 55/2007 provides the regulatory power to the Central Bank to regulate and supervise payment system while the Payment system Law N°03/2010 focuses on protection of payment and settlement systems.
There is also an enabling regulation N° 06/2010 relating to the oversight of payment systems and activities of payment services providers and particularly the regulation of 2010 governing payment service providers which was amended in December 2015 (Regulation N° 07/2015).
The regulatory framework mainly covers the licensing procedures, corporate and governance frameworks as well as consumer protection. Given that this domain is very dynamic and is evolving very fast, we believe that regulators should also be proactive and regularly review the legal framework to cater for new market dynamics and challenges.
That is why most of these regulations are under review. It is important to mention that based on the nature of Mobile Money activities; there is a collaborative framework between the National Bank of Rwanda and RURA through an MOU that was signed in 2012.
Corporate Communications Expert, National Bank of Rwanda
I beg to understand what the loopholes are in the current legal framework that calls for increased regulation. Surely as an expert, you might be aware of regulations practice for those fin-techs in markets where they are growing the fastest, they didn’t need to enact new regulation at all since the law to regulate them is in place.
As a professional in the international financial landscape with particular focus to fin-techs, and currently processing investment in that space in East Africa, hopefully beginning with Rwanda, there are in my view two paradigms:
1. Are mobile money providers holding public money in form of deposits? Then they need a banking license and should be regulated as such (process, reporting, capital ratio, compliance), so the law is there.
2. Are mobile money providers providing only payment services, which suppose that the money is held at another account with a bank, and the money providers just provide electronic accounting and settlement service (which is the case I believe)?
Then they are providing actually a non-banking service and should be regulated by existing consumer protection laws (which should cover any kind of fraud in service to person by the way).
Calling for regulation at the wrong address like in your article will, in my view, not be the right approach and could set in motion unnecessary negative events or public perception, which could stifle a smooth expansion of this value-creating service.
That the banks are overhauled by this, is in the nature of the evolution, inefficient structures are deem to make place for better value-adding service.
If a bigger swathe of the population worldwide chooses not to have an account at all but still transact, then they know better — not many felt the need to have a landline phone before acquiring a mobile. We just leapfrogged that inefficient part of the evolution.