Mobile money legislative void: regulators like the NPS must do more

We’ve all had an understanding of how mobile money works locally, so it’s clear to most of people that there are gaps that exist in the regulation of these services from all of the authorities or stakeholders involved.

From the payments regulator National Payments System (NPS), the telecoms regulator POTRAZ, the insurer of deposits Deposit Protection Cooperation (DPC), and the consumer protection under the Consumer Council of Zimbabwe (CCZ), It doesn’t seem like there are joint efforts to tackle any common challenges.

It emerged from the Digital and Mobile money conference recently that you can have POTRAZ running road shows on one end while the CCZ holds its forum separately on another side even though the issues cannot be discussed in isolation.


Singling out the National Payment Systems, this is the division that is failing to enforce and develop regulation of mobile money agents to ensure their neutrality, independence and sovereignty. This has resulted in operators sometimes exerting undue influence for business mileage and such anti-competitive behaviour is going unchecked.

It has also failed to make public and hold awareness campaigns on the guidelines that govern mobile money transactions, a situation that leaves subscribers with a lot of questions.

In the event of death how is the estate of the deceased made known? Can one get an indemnity to operate a mobile account on behalf of someone else? How long should an account remain dormant before an auto-reversal or other action needs to be taken for a received transfer?

How many mobile wallets is an individual allowed to operate from the same network? What are the obligations of an agent? What action is taken if an agent fails to manage liquidity? What audit trail is compulsory for an agent, merchant or biller? The list is endless.

The NPS Act is rather vague and must be updated with urgency. A quick look at the Ghana version shows some of the advancements we can easily implement locally.

What about interoperability? While it remains a voluntary exercise for now, are there prospects of mandatory handshakes? The benefits are inarguable for both the agent and subscribers in terms of costs. If so should we not already have the settlement rules and regulations in place… or do they exist?

While the NPS adopted a deliberate “observe and adapt” attitude towards mobile money, a move meant to allow innovation and avoid over-regulation, they should not remain so far behind as to stifle growth and competitiveness.

In as far as the trust funds, the terms and conditions of fund isolation don’t seem to be up to date and in tandem with today’s dynamics in mobile money. As an example, while it may be clear from the bank’s side how those funds are administered, there is no clear cut isolation of these deposits from a mobile money operator’s overall balance sheet.

There is room for abuse of the fund by the operators and in the case of insolvency, will the funds not be treated as assets under the operator going under the hammer? If it is the bank that fails does the Insolvency Act consider trust deposits a priority and preferred payment? How are the subscribers to be refunded?

There are so many questions that have not been explicitly answered and the authorities’ position that they are “looking into it” does little to comfort the users. The RBZ is drafting appropriate guidelines including the Electronic Payments and Agent Banking but until we receive the final regulations it’s going to be a guessing game.

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