Reserve Bank of Malawi (RBM) says it plans to implement a regulation mandating business operators to adopt at least one digital financial services channel.
Speaking during the 2020 Financial Technology (Fintech) Conference and Exhibition in Mangochi on Thursday, RBM national payments system director Fraser Mdwazika said in a speech made available to Business News that the regulation, which was already gazetted, seeks to provide convenience to customers willing to pay for goods and services digitally.
“Proper communication to the business community is being prepared and the timeframe within which this regulation is going to be implemented will be announced shortly,” he said.
Over the years, RBM has formulated various legal instruments to ensure a sound legal and regulatory framework to support the modern payments infrastructure.
They include the Payment Systems Act (2016), the Interoperability Directive (2017), E-Money Regulations (2018) and Guidelines for Application of Payments Services (2018).
Mdwazika said while the country has registered progress in the digitisation process enabled by the modern payments infrastructure, cash dominates the day-to-day payment needs of many individuals in the country.
RBM figures show 132.2 million transactions were processed in all payment streams during the third quarter of 2020, representing an increase of 30 percent from the second quarter of 2020.
Total value of transactions also increased by 20.7 percent to K16.1 trillion during the same period.
On the other hand, the volume and value of digital financial services rose by 30 percent and 30.7 percent to 130.4 million and K2 trillion, respectively, during the period under review.
Relative to the corresponding period in 2019, digital financial services performance shows much higher improvement as the volume and value of transactions processed during the period under review rose by 63.7 percent and 46.1 percent, respectively.
Meanwhile, the total number of point of sale (PoS) terminals deployed nationwide rose by 5.9 percent to 2 837 during the third quarter of 2020 with an improvement in usage as both the volume and value of PoS transactions rose by 11.6 percent and 10.2 percent to 506 412 and K16.2 billion, respectively.
In his remarks, Leornard Kazembe, regional director of Pan African Learning and Growth Network (Southern Africa)—organisers of the conference, said although Covid-19 has increased the prioritisation of FinTech among financial regulators, it has also posed a number of key challenges in the regulatory approach to FinTech and digital financial services.
He said unlike grocery shopping, financial services tend to be a highly regulated sector where the pace of innovation and change at times outstrips the ability of regulators to keep up.
The FinTech Conference was launched in April 2018 to bring together various industry players, innovators, investors and leaders in the disruptive industry, including those dedicated to banking, investment platforms and insurance.