By Jeph Ajobaju, Chief Copy Editor
Regulatory Guidelines and Framework for Mobile Money Services have been released by the Central Bank of Nigeria (CBN) both to regulate the platform and ensure financial inclusion countrywide.
The regulator said the fast growth and acceptance of mobile telephone and person-to-person payment compel the use of mobile channel to drive financial inclusion among the unbanked.
Nairametrics reports that financial inclusion gains traction among policymakers, scholars, and development organisations worldwide as a vehicle for economic growth, poverty reduction, job creation, wealth creation, uplifting living standards.
Section 47(2) of the CBN Act empowers it to facilitate, in accordance with its mandate to promote a sound financial system, the establishment of efficient and effective trading arrangements, including electronic payment systems.
The mobile money guidelines:
· Cover regulations governing mobile money service operations
· Describe fundamental features of mobile payment service and solution
· Define participants in the system and their roles and duties
· Lays regulation groundwork for services at various levels
Key takeaways
Per Nairametrics reporting, the guidelines define two models for mobile money services:
· Bank-led (bank and/or its consortium as Lead Initiator)
· Bon-bank-led (corporate entity regulated by the CBN as Lead Initiator)
Bank-led model
A bank, alone or as part of a consortium, aims to supply financial services through a mobile payment system.
This model can be used where the bank operates independently or in partnership with other banks and other approved organisations.
A bank or a group of banks will serve as Lead Initiator.
Non-bank led model
A corporate entity licensed by the CBN to provide mobile money services to users.
A corporate organisation (except a deposit money bank, national primary mortgage bank, national microfinance bank or telecom firm) is licensed by the CBN to provide mobile money services.
The organisation shall be the Lead Initiator.
Prohibitions
The following practices are prohibited for mobile money operators:
· The grant of any type of loan, advance, or guarantee (directly or indirectly).
· Acceptance of foreign currency deposits.
· Dealing in foreign exchange (forex) except as permitted by Section 4.1 (ii) and (iii) of the Guidelines for Licensing and Regulation of Payment Service Banks in Nigeria.
· Insurance underwriting.
· Accepting a closed scheme electronic value (for example, airtime) as a form of deposit or payment.
· Establishing a subsidiary.
· Engaging in any other transaction banned by the guidelines.
· Any other conduct the CBN may deem illegal.
Other requirements
1. Mobile Money Operators (MMOs) must establish processes that cover full solution delivery process, including
a) User registration and management
b) Agent recruiting and management
c) Consumer protection
d) Dispute resolution procedures
e) Risk management procedures
f) Transaction settlement
2. All participants covered by these processes span the entire value chain.
3. Savings Wallet Fund shall be invested only in Nigerian Treasury Bills (NTB)
4. MMOs will be treated as CBN’s mandate for customers for NTB subscription through a CBN NTB window.
5. MMOs will use their Savings Wallet Principal Pool Accounts to determine cash balance that meet customers’ savings wallet withdrawal requirements at all times.