UGANDA: Mobile money operators must notify BoU of fraud, theft cases
Payment system providers and operators, among which include mobile money operators and aggregators, must within 24-hours notify Bank of Uganda of suspected or confirmed fraud, security breach and material service interruptions, according to new regulations and guidelines.
The regulations, provided under the National Payment Systems Act, also require payment system providers and operators to report issues that may affect safety and efficiency of electronic money as well loss of confidential data.
These, and others, are some of the regulations that seek to guide the implantation of the National Payment System Act, which among others will streamline the operation and regulation of mobile money as well as provide clear guidelines for the achievement of a cashless economy, which the Central Bank had in 2017 said would be achieved next year.
Already, the Central Bank has started operationalising the law, which takes mobile money away from the operations of telecom services.
Operational licences have been issued to MTN Mobile Money Uganda and Airtel Mobile Commerce, MTN and Airtel subsidiaries while considering other applications from at least more than 10 companies.
The regulations also warn of heavy penalties and fines, among which include monetary and licence suspensions for payment systems providers and operators found guilty of failing to operate within set guidelines.
The National Payment System Act, implemented under the National Payment Systems Regulations, is geared towards streamlining the operations of payment system providers and operators, among which include mobile money companies, issuers of payment instruments and trust fund operators.
The Act also seeks to establish procedures within which payment service providers and operators shall keep the Central Bank informed of their activities by, within 10 working days from the last day of every month, submit information regarding, the number of registered and active agents locations on the network, volumes and values of all activities broken down by type of transaction, including cash-in, cash-out, fund transfers and other payment services.
Other requirements will require payment system providers and operators to report the volume and value of points of sale including interbank transactions where applicable, gender disaggregated data of customers and complaints received, broken down by category and agent location, including remedial measures taken.
The law also requires payment system providers and operators to submit the number of registered and active electronic money accounts, broken down by type, sum of outstanding balances and aggregated value of trust accounts.
The National Payment Systems Act effectively creates a window through which mobile money services, which have presented regulatory challenges, will be regulated as well as creating investment opportunities.
Mobile money has for long been unregulated due to lack of an enabling law with complaints mostly reported to Uganda Communications Commission, which largely is in charge of regulating telecom services.
The law will also requires payment systems providers and operators to submit to Bank of Uganda quarterly financial statements including income statements and a statement of the financial position at least by the 15th day of the following month, submit a report of the annual audit of the payment system as well as publishing audited financial statements by every 30th of April in a newspaper of wide circulation.
Some of the National Payment Systems regulations
1. A licensee shall, within 10 working days from the last day of every month, submit to the Central Bank information regarding:
. Number of registered and active agent locations.
. Volumes and value of activities, broken down by type of transaction.
. Volume and value of points of sale.
. Incidents of fraud, theft or robbery if any.
. Number and type of service interruptions and significant security breaches.
. Number of suspicious transactions.
. Gender disaggregated data of customers.
. Complaints received, broken down by category and agent location.
2. An electronic money issuer shall submit: Sum total of outstanding electronic money balances held. . Information on dormant accounts, specifying the volume, value and age.
3. An electronic money issuer shall submit information related to financial inclusion.
4. The electronic money issuer shall notify the central bank in writing, no later than 24 hours from the occurrence of any suspected or confirmed fraud relating to the electronic money service, security breaches, material service interruption or other significant issues that may affect the safety and efficiency of the electronic money service.
. Loss of confidential data; and
. Any other occurrence from which the central bank may request for information.
5. An electronic money issuer shall on a daily basis submit to the central bank a reconciliation statement between the electronic money account and the trust account or special account.
6. An electronic money issuer shall on a weekly basis submit to the central bank a report of the breakdown of the balances in the trust account or special account.
7. An electronic money issuer shall replicate in real time the data and records of the electronic money account as directed by the central bank.
8. Any licensee who without reasonable cause fails to comply with this regulation or submits inaccurate returns within the stipulated period, shall pay to the central bank a civil penalty of two hundred currency points per day of default.
9. Submission and publication of financial reports
10- A licensee shall submit to the central bank-
-quarterly financial statements including an income statement and a statement of the financial position verified by an external auditor by the 15th day of the following month;
-audited financial statements no later than 30th day of March, after the end of the calendar year; and
-a report of the annual audit of the payment system or electronic platform used to issue to a payment instrument, operate a payment system or provide a payment service by the 30th day of March, after the end of the calendar year.
11. A licensee shall publish in the newspaper of wide circulation the audited financial statements by the 30th day of Aril after the end of the calendar year.
SOURCE: DAILY MONITOR / By Dorothy Nakaweesi