E. N EGBUNA (PhD)
DIRECTOR, FINANCIAL INTEGRATION
WEST AFRICAN MONETARY INSTITUTE (WAMI)
Being the text presented in the Panel discussion on Regulation of international Remittances and Central
Banks’ co
-
operation on Cross Border Mobile Payments
1
AGENDA
Introduction
What is Cross Border Mobile Payments and its
Significance to WAMZ and WAMI Mandate?
Overview of the situation and Current status of Mobile
Payments development in the WAMZ region.
Associated Challenges
The way Forward
2
1. INTRODUCTION
-
THE WAMZ PROGRAMME
The West African Monetary Zone consists of six
countries:
-
The Gambia, Ghana, Guinea, Liberia, Nigeria and
Sierra Leone.
The primary objective of the programme is the
establishment of an economic and monetary union of
the member countries.
The expected date for the launch of the Union is
January 2015
3
1. INTRODUCTION
-
THE WAMZ PROGRAMME
The West African Monetary Institute (WAMI) is the
Administrative Organ of the WAMZ Programme.
-
Undertakes multi
-
lateral surveillance exercises to
ensure the attainment of set primary and secondary
macro
-
economic convergence criteria;
-
ensures the attainment of structural and institutional
benchmarks;
-
performing activities that will lead to the
establishment of the:
West African Central Bank (WACB);
West African Financial Supervisory Authority; and
West African Monetary Zone Secretariat
4
1. INTRODUCTION CONTD.
About
300
million
mobile
phone
subscribers
in
Africa
-
the
WAMZ
accounts
for
about
half
this
number
New
technologies
offer
improvements
to
remittance
services
and
reduction
in
transactions
costs
:
mobile
phones
should
hold
the
greatest
promise
for
Africa
Remittances
–
Important
source
of
income
to
developing
countries
like
the
WAMZ
:
Poverty
alleviation
Stimulation
of
development
1. INTRODUCTION CONTD.
Most of the funds are sent through informal channels
with attendant risks
Most of the remittances fall outside the regulatory
monitoring scope
Money laundering
Exchange control monitoring
2.CROSS BORDER MOBILE PAYMENTS
–
WAMZ &
WAMI MANDATE
.
As a working definition,
cross border mobile
payment is a real time mobile payment, which is
crucial for both remittances(person to person),
and for formal/informal cross border trade
(business to business) transfers/settlements
7
2.CROSS BORDER MOBILE PAYMENTS
–
WAMZ &
WAMI MANDATE
Strong regional financial markets and institutions play
an important role in supporting economic development
The formalization and efficiency of cross border
remittance and trade flows is an important development
goal
WAMZ/WAMI
–
confronted with the promotion of cross
border mobile transfer, but not at the expense of
financial stability
8
3. CURRENT STATUS OF MOBILE PAYMENTS
DEVELOPMENT IN THEWAMZ
Slow rate of evolution of mobile payments resulting
from the following:
Shallowness of the financial system
Absence of a common regulatory framework within
the region
Formal barriers to the provision of payment and
transaction services by non banks
Formal and informal trade barriers
9
4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA
ADB financed payments system development
project
The Gambia: Already live
Guinea: End December 2012
Liberia; End December 2012
Sierra Leone: End December 2012
10
4
. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA
Cross border banking regulation
Establishment of the College of Supervisors
(CSWAMZ), leading to:
Capacity building
Information sharing
Corporate governance
Harmonization of banking supervision processes
11
4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA
Capital Market Integration
Progressing towards a common regional capital
market
Lower cost of capital
Increase access to capital
Stimulation of growth
12
4
. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA
Harmonization of supervisory and reporting
standards
Risk Based Supervision (RBS)
Implementation of eFASS technology
13
4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA
Trade Integration
ECOWAS
-
WAMI joint task force on trade integration
ADB assisted national trade policies formulation for
The Gambia, Sierra Leone and Liberia
14
5. ASSOCIATED CHALLENGES
Development of non proprietary mobile banking
solutions
Removal of entry barriers to potential new
entrants with the attendant risk of disrupting
lucrative business models of banks and mobile
operators
Ensuring high levels of security and trust
Bank led/non bank led model?
15
5. ASSOCIATED CHALLENGES
Are Consumers adequately protected?
Fraud
Loss of privacy
Service failure
How does it impact stability in the banking
system and national/regional payments system?
Are payments and deposits adequately
distinguished?
Are there laws backing e
-
money issuance?
16
5. ASSOCIATED CHALLENGES
Are there legally backed agencies for cash
deposits and withdrawals?
How do we manage AML/CFT risks?
17
6. THE WAY FORWARD
Completion of the ADB funded payments system
development project in the WAMZ with the
possibility of the following adds
-
on
National Switch
Mobile money banking facilities
eg
, POS
Other e
-
banking channels
Installation of eFASS technology
18
6. THE WAY FORWARD
Capacity building
I.
WAMI
Cross border payments and integration issues:
Choice of model for the WAMZ
II.
CSWAMZ
Supervisory roles for cross border mobile payments
III
. Member states’ Central banks and
Telecommunications operators
Design of regulatory and legal framework
19
THANK YOU FOR YOUR ATTENTION
JE VOUS REMERCIE DE VOTRE ATTENTION
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