The Kenyan authorities released on August 15th the National Payment Systems Regulations, giving a formal legal framework for mobile money.
The legislation was eagerly awaited in a Country where 26.2 million registered mobile money accounts and 59 percent of the adult population actively use mobilemoney, GSMA reports.
While it provides certainty and direction for investors seeking to enter the market, it also brings many benefits for customers, such as consumer redress, disclosure of terms of service, maintenance of privacy and confidentiality of customer data.
Banks and non-banks – including Mobile Network Operators – are permitted to provide mobile money services.
In addition, service providers can appoint agents and are responsible for their actions.
The new regulatory framework also includes measures to safeguard funds. These must be held in trust with a strong-rated prudentially regulated bank and no lending or investment of such funds is permitted. The funds are isolated from the service provider’s own funds and safe from claims of its creditors.
Where the trust funds balances are in excess of KES 100 million (€859,000), they will have to be placed in at least two strong-rated institutions with a maximum of 25 per cent of the total funds held in each institution.