Zimbabwe’s Central Bank Tightens Mobile Money Regulations by Enforcing Geolocation of Access Points
Mobile money operators in Zimbabwe now have to provide geolocation of all their access points and other related services like Point of Sale (POS) machines and mobile money agents.
This is according to the new directive issued by the Reserve Bank of Zimbabwe (RBZ) to mobile money and other financial service providers in the country.
Over the past year, Zimbabwe has been facing high cash shortages as banks fail to meet demand for banknotes and coins. According to an IMF report, the inflation rate in the country as at August 2019 was about 300%.
Zimbabwe’s struggling economy and the corresponding cash shortage has made mobile money operators an essential means of transaction for residents in the country.
Last year however, the country’s apex bank placed an embargo over mobile money to cash transactions after mobile money agents were found taking advantage of the cash shortage to buy cash and resell to mobile wallet holders at a premium of up to 50%.
Although the ban was reversed due to public outcry, the central bank passed a 100 Zimbabwean dollars limit per cash-out transaction.
With the new directive issued by the RBZ, mobile money operators and other digital finance service providers must openly disclose the location of all available of access points and devices to interested stakeholders.
“The bank urges and encourages all financial institutions, payment system providers and other stakeholders in the financial services sector to provide geolocation of all access points and devices which include Point of Sale devices, ATMs, mobile banking agents, merchants, branches and branch agents,”Extract from the circular by the Reserve Bank of Zimbabwe (RBZ)
The circular elaborated that the geolocation will entail identification and publication of the exact real-world geographic locations on their website and electronic platforms.
“Geolocation will entail the identification and publication of the exact real-world geographic locations of the access points and devices. In this regard, institutions are urged to update their websites as well as other electronic platforms to make this information available to stakeholders.”Extract from the circular by the Reserve Bank of Zimbabwe (RBZ)
Currently, digital banking and mobile money make up a huge part of Zimbabwe’s economy. With mobile money estimated to perform over 5 million transactions worth more than $200 million every day.
This increasing relevance of the industry makes it important for the central bank to regulate aspects of it. The enforcement of geolocation on mobile money operators will help improve credibility and consumer protection.
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