eBusiness Weekly
Bulawayo Bureau
Banking institutions should compensate their clients for any loss arising from the liability of a third party mobile or electronic transaction service provider, the Reserve Bank of Zimbabwe (RBZ) has said.
In pursuit of financial inclusion and the need to address hard cash shortages in the economy, the apex bank has allowed partnership arrangements between mobile payment service providers and deposit-taking financial institutions in line with the National Payment Systems (NPS) Act.
As a result banks are now able to offer mobile payment services to the transacting public.
Zimbabwe has already adopted a bank-led model in order to facilitate oversight of deposit-taking activities.
“In terms of retail payments guidelines, banking institutions are accountable for all transactions conducted via digital platforms, including those involving fintechs and mobile money,” RBZ deputy governor Dr Jesimen Chipika, said.
“In this regard, banking institutions are required to compensate their customers for any loss arising from the liability of a third party provider of service. This provision allows for the protection of depositors, while ensuring that regulated entities conduct comprehensive due diligence reviews of the technical soundness of proposed fintech partners.”
Recently, the central bank issued Guidelines for Retail Payment Systems and Instruments with the objective of promoting the efficiency, effectiveness and stability of electronic payment systems and the use of e-money.
“These provide best practices for managing risks in the introduction and operation of electronic payment schemes,” she said.
In line with global trends, Dr Chipika said the local financial services sector players have taken advantage of technological developments, which has resulted in the growth and modernisation of digital financial services. As such, she said the adoption of new payment modes has permeated all sectors in the economy including insurance, securities and banking.
Section 13 of the Deposit Protection Corporation Regulations already provides cover to trust accounts, such as those used to facilitate mobile money transactions, subject to appropriate disclosure of the trust account.
To promote an effective regulatory and supervisory framework and reduce the scope for regulatory arbitrage in the monitoring and oversight of digital payment services, the RBZ and the regulatory authority for mobile network operators (POTRAZ) have formalised collaborative arrangements through a Memorandum of Understanding.
Following the wide adoption of the agency banking model by banking sector players, the Reserve Bank issued Prudential Standards on Agency Banking in 2017 in order to promote consumer protection and provide minimum technical requirements to ensure a safe and stable transacting platform for the banking public.
Among various initiatives to promote the resilience of banking institutions and reduce the impact on the deposit protection scheme, the Reserve Bank issued the Technical Guidance on the Implementation of the Revised Capital Adequacy Framework (Basel II) to the market in January 2011.
“Going forward the, RBZ will continue to promote innovative, effective and safe digital solutions through the development and implementation of legislation that facilitates and supports digital financial services and promotes financial stability,” said Dr Chipika.
