Govt Tightens Regulations For EcoCash, Mobile Money Service Providers

Govt Tightens Regulations For EcoCash, Mobile Money Service Providers
Govt tightens regulations for EcoCash, money service providers.

SI

In an unexpected turn of events, Government has made a u-turn on mobile money transfer ban after publishing SI 80 of 2020.

Government through the Ministry of Finance and Economic Development has published Statutory Instrument (SI) 80 of 2020 Banking (Money Transmission, Mobile Banking and Mobile Money Interoperability) Regulations.

SI 80 of 2020 seeks to regulate mobile money banking and transfers. The SI signifies a reversal by Government which had banned mobile money transactions on Friday evening.

Under SI 80 of 2020 mobile money providers are deemed to be financial institutions in terms of the Banking Act. They will be required to pay an application fee of $5 000 ZWL and an annual subscription fee of $300 000 ZWL.

Government has tightened regulations on mobile banking and transactions. Under the new regulations, mobile money platforms can no longer set transaction charges without the consent of the Reserve Bank of Zimbabwe (RBZ).

Under subsection 5, SI 80 of 2020 reads:

5. (1) No money transmission provider or mobile banking provider shall levy, amend or review any transaction charges without the prior approval of the Reserve Bank.

(2) If it comes to the notice of the Reserve Bank that default is made in complying with subsection (1) the Reserve Bank may serve a category 2 civil penalty order upon the defaulting mobile money provider.

Mobile money providers also face 6 months in prison or a fine if found guilty of contravening the provisions of section 4 of SI 80 of 2020. Section 4 of SI 80 of 2020 mandates mobile money services to be connected to the national payment switch, open and maintain a bank account that is designated exclusively for mobile banking services, ensure that no money is transmitted or is retained on the payment system without a corresponding correct bank balance and must submit periodic returns to the Reserve Bank among many other directives.

Part of SI 80 of 2020 reads:

(12) Where a mobile money provider contravenes the provisions this section the Reserve Bank may in addition to issuing a civil penalty order in terms of subsection (11) , withdraw the recognition of a payment system in terms of section 6 of the National Payment Systems Act [Chapter 24: 23].

(13) Any person who contravenes this section shall be guilty of an offence and be liable to a
fine not exceeding level 7 or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.

You can download SI 80 of 2020 here.

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