GUIDELINES

FOR

RETAIL PAYMENT SYSTEMS

AND INSTRUMENTS
CONTENTS
1 Scope and Objectives ....................................................................................................... 3

2 Definitions ......................................................................................................................... 4

3 Authorization .................................................................................................................... 7

4 Governance ....................................................................................................................... 8

5 Operational Requirements ............................................................................................ 12

6 Capital Requirements .................................................................................................... 13

7 Risk Management .......................................................................................................... 14

8 Interoperability and Infrastructure Sharing ............................................................... 15

9 Records Management .................................................................................................... 16

10 Outsourcing .................................................................................................................... 16

11 Use of Agents .................................................................................................................. 17

12 Liability ........................................................................................................................... 19

13 Remittances..................................................................................................................... 19

14 Rights and Responsibilities of Each Stakeholder ........................................................ 20

15 Consumer Protection, Education and Privacy ............................................................ 20

16 Prudent Management of Funds .................................................................................... 22

17 Management of Escrow /Trust /Banking Services Account ....................................... 23

18 Reporting Requirements ............................................................................................... 23

19 Compliance with AML/CFT legislation ....................................................................... 24

20 Prohibitions..................................................................................................................... 24

21 Measures on Electronic Transfers and Electronic Operations .................................. 25

22 Electronic Transactions Limits ..................................................................................... 25

23 Existing Schemes, Systems or Products ....................................................................... 26

24 Payment Systems Associations ...................................................................................... 26

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1 Scope and Objectives

1.1. Prudent management of payment schemes is critical to ensure safety and

soundness in the national payment system and the general functioning of
the financial system as well as wider acceptance and success of retail
payment modes or instruments, and ultimately support of economic
development.

1.2. Accordingly, this Guideline aim to provide a framework to support the

development of retail payment systems and retail payment instruments in
Zimbabwe by ensuring the safety and soundness of payment schemes
and products, thereby enhancing users’ confidence in electronic payment
means and increasing their use by the population at large.

1.3. In the light of the development of innovative means of payment using

new technologies, these Guidelines have a special focus on electronic
systems and the use of e-money, while addressing retail instruments in
general and promoting consistency of treatment for all payment
instruments in the country.

1.4. To this end, any entity wishing to operate a retail payment system and/or
issue and manage a retail payment instrument must comply with the
authorization requirements established by the Reserve Bank of
Zimbabwe (“Reserve Bank”) under these Guidelines and/or any
additional measures adopted by the Reserve Bank. To the same end, the
standards for the management of retail payment systems, the outsourcing
of parts of relevant activities and the use of agents are covered in the
guidelines.

1.5. These Guidelines are issued in line with the Reserve Bank of Zimbabwe
mandate over the national payment system as stipulated under the
Reserve Bank of Zimbabwe Act [Chapter 22:15] and the National
Payment Systems Act [Chapter 24:23].

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1.6. These Guidelines do not confer on any entity the right to conduct deposit
taking business, which may only be conducted by licensed and
supervised deposit taking institutions (DTIs) by the Reserve Bank of
Zimbabwe.

1.7. These Guidelines do not apply to virtual currencies and should by no

means be read to imply any authorization of the issuance or management
of such currencies in the country by the Reserve Bank.

2 Definitions
2.1. Acquirer means the payment service provider (PSP) processing payments
on behalf of a merchant.

2.2. Agent means a person acting in the name and on behalf of, and so
representing one or more PSP issuing a retail payment instrument vis-à-
vis users. The issuing PSP is subject to all relevant Zimbabwe rules on
principal-agent relationship. By virtue of the agency agreement, the agent
is permitted to conduct solely and specifically the services indicated in
the agreement.

2.3. Banking services account means an escrow account relating to electronic

value movement by banked customers through wallet to bank or bank to
wallet.

2.4. E-money means electronically, including magnetically, stored monetary

value in any device or instrument or server as represented by a claim on
the issuer, which is issued on receipt of funds for the purpose of making
payment transactions and which is accepted as a means of payment by
persons other than the issuer. This includes e-money stored in a device
such as a SIM card or a server and accessible via mobile, telephone,
internet or other access devices, cards, and other similar products but

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 excludes any electronic means to only permit transfers to/from a deposit
or current account.

2.5. Escrow account means a form of account held by a bank into which e-
money is deposited and for proper accounting of the funds as agreed by
the parties. This includes trust and banking services accounts all managed
by the same trustees.

2.6. Issuer means a PSP duly authorized, individually or jointly by the

Reserve Bank to issue and manage retail payment instruments. In an
instrument or similar scheme where e-money is stored, this is the entity
which receives payment in exchange for value distributed in the scheme
and which is obligated to pay or redeem transactions or balances
presented to it. These shall include deposit taking institutions and any
other entity registered by the Reserve Bank.

2.7. Infrastructure sharing is the use of existing and future physical, virtual
properties by two or more operators or issuers subject to an agreement
specifying relevant technical and commercial terms and conditions.

2.8. Merchant means any person that accepts retail payment instruments, as
well as e-money as payment for their goods and services.

2.9. Operator means the entity that provides and manages a retail payment
system.

2.10. Outsourcing means the contracting or sub-contracting of one or more

activities relating to the operation of a system or the issuance and
management of a payment instrument to an independent third party. Such
third party provides services to the issuer.

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2.11. Payment Service Provider (PSP) means an entity that provides services
enabling funds to be deposited and withdrawn from an account; payment
transactions involving transfers of funds; the issuance and/or acquisition
of payment instruments such as cheques, e-money, credit cards, debit
cards; remittances and other services central to the transfer of funds.

2.12. Remittance service provider means an institution that accepts cash and
other payment instruments in one location and pays a corresponding sum
in cash or other form to a beneficiary in another location by means of a
communication, a message, transfer or through a clearing network to
which the remittance service provider belongs.

2.13. Retail payment instrument means any tangible or intangible device or

mechanism that enables a n individual or entity to obtain money, goods or
services, or to otherwise make payment or transfer money, regardless of
whether the user holds an account or not. These include, but are not
limited to, funds transfers initiated by any paperless device (such as
automated teller machine, points of sale, internet, telephone, mobile
devices, payment cards, including those involving storage of E-Money,
and transfers executed by remittance services, both domestically,
regionally and internationally.

2.14. Retail Payment System comprises the technical infrastructure;

participants; instruments; for clearing and settlement; business
relationship arrangements (such as bank-customer relationships, rules,
procedures, the applicable legal framework and governance
arrangements) that put together, provide overall environment within
which typically a large volume relatively low value payments are posted,
authorised, processed, cleared and settled.

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2.15. Scheme means the rules, standards and procedures governing the
operational framework permitting the operation of the retail payment
system and instrument and the linking of all stakeholders.

2.16. Trust account means an escrow account relating to electronic value

movements through deposits and withdrawals by merchants, agents,
billers and other customers.

2.17. User means any person who uses a retail payment instrument or any
person to whom e-money has been issued

2.18. Virtual currency means a digital representation of value that can be

digitally traded and functions as (1) a medium of exchange; and/or (2) a
unit of account; and/or (3) a store of value, but does not have legal tender
status (i.e., when tendered to a creditor, may be valid and legal offer of
payment) in any jurisdiction. It is distinct from e-money, which is a
digital representation of currency used to electronically transfer value
denominated in currency.

2.19. Wallet means a user’s holding in an escrow account.

3 Authorization

3.1. No operator can operate a system or an issuer can issue and manage retail
payment instruments unless it has been authorized by the Reserve Bank.

3.2. In order to be authorized, an applicant shall submit to the Reserve Bank

all information and documents that the Reserve Bank shall from time to
time require for this purpose in accordance with its Recognition Criteria
and Oversight Framework under the National Payment Systems Act and
other applicable laws or legal statutes.

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3.3. Authorization and Approval or Approved shall refer to sanctioning by
Reserve Bank of Zimbabwe and in some cases by market players through
recognised self-regulatory bodies (SRO) under the jurisdiction of the
Reserve Bank.

4 Governance
4.1 An operator or an issuer shall establish adequate governance
arrangements, which are effective and transparent, to ensure the continued
integrity of its scheme or product, which shall include, among others, the
following:

Fulfillment by all shareholders, directors, managers and agents of the fit

and proper criteria requirements as established by the Reserve Bank and
include the following minimum requirements:
i. Honesty, integrity and reputation (fairness and ethical
behaviour)
ii. Competence and capability
iii. Financial soundness and solvency

4.2 The above matters will be considered in respect of the persons, for the
functions and duties to be undertaken by any of these persons that are
involved in any payment systems regulated activities.

Honesty, integrity and reputation (fairness and ethical behavior)

4.3 In determining the integrity of the key person (both natural and corporate),
the Bank will consider matters such as, but not limited to:
i. Conviction of any criminal offence;
ii. Adverse findings or any settlement in civil proceedings;
iii. Interviews done in the course of, any existing or previous
investigation or disciplinary proceedings, by the any regulator;

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 iv. Any proceedings of a disciplinary or criminal nature, or has been
notified of any potential proceedings or of any investigation which
might lead to those proceedings;
v. Contravention of any of the requirements and standards of any
regulatory system;
vi. Subjection of any justified complaint relating to regulated
activities;
vii. Involvement with an institution that has been refused registration,
authorisation, membership or a licence to carry out a trade,
business or profession, or has had that registration, authorisation,
membership or licence revoked, withdrawn or terminated, or has
been expelled by a regulatory or government body;
viii. Removal of the relevant licence, registration or other authority,
leading to the person being refused the right to carry on a trade,
business or profession requiring a licence, registration or other
authority;
ix. Director, partner, or concerned in the management, of a business
that has gone into insolvency, liquidation or administration while
the person has been connected with that organisation or within one
year of that connection;
x. Person, or any business with which the person has been involved,
has been investigated, disciplined, censured or suspended or
censored by a regulatory or professional body, a court or Tribunal,
whether publicly or privately;
xi. Dismissal, or asked to resign and resigned, from employment or
from a position of trust, fiduciary appointment or similar;
xii. Disqualified from acting as director or disqualified from acting in
any managerial capacity;
xiii. In the past, the person has been candid and truthful in all his
dealings with any regulatory body and whether the person
demonstrates a readiness and willingness to comply with the

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 requirements and standards of the regulatory system and with other
legal, regulatory and professional requirements and standards.

Competence and Capability

4.4 In determining a person’s competence and capability, the Bank shall have
regard to matters including, but not limited to the person’s:

i. Personal characteristics and adequate time to perform the function

and meet the responsibilities associated with that function;
ii. Satisfactory past performance or expertise in the nature of the
business being conducted;
iii. Appropriate range of training, qualification, skills, competence and
experience to understand, operate and manage the regulated
activities/financial affairs;
iv. Technical knowledge, ability personal characteristics and adequate
time to perform prescribed duties for which they are engaged, and
meet the responsibilities associated with that function; Recognized
professional qualifications and membership of relevant professional
institutions will be an added advantage to this effect.

Financial Soundness and Solvency

4.5 In determining the financial soundness of the key person (both natural and
corporate), Bank will consider matters such as, but not limited to:

i. Whether the person has been the subject of any judgment debt or
award, in Zimbabwe or elsewhere, that remains outstanding or was
not satisfied within a reasonable period;
ii. Whether, in Zimbabwe or elsewhere, the person has made any
arrangements with his creditors, filed for bankruptcy, had a
bankruptcy petition served on him, been adjudged bankrupt, been the
subject of a bankruptcy restrictions order (including an interim
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 bankruptcy restrictions order), offered a bankruptcy restrictions
undertaking, had assets sequestrated, or been involved in proceedings
relating to any of these.
iii. Whether there are any indicators that the person will not be able to
meet its debts as they fall due;
iv. Whether relevant solvency requirements are met;
v. Whether the person has been subject to any judgment debt or award
that remains outstanding or has not been satisfied within a reasonable
period;
vi. Whether the person has made arrangements with creditors, filed for
bankruptcy or been adjudged bankrupt or had assets sequestered;
vii. Whether the person has been able to provide the Financial Regulator
with a satisfactory credit reference.

4.6 Management and shareholders should ensure capital adequacy in line with
the minimum requirements at all times;

i. Clearly defined and documented organizational arrangements, such as

ownership and management structure;

ii. Segregation of duties and internal control arrangements to reduce

chances of mismanagement and fraud;

iii. All retail payment platforms owned by a group of companies or within a

company offering other businesses should be operated as strategic
business units within three years from date of approval. These platforms
should operate as independent or separate or standalone legal entities
within five years from date of approval.

iv. Those already recognized should migrate to the same (4.1e) within two
years from the date of issuing this guideline.

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4.7 The operator or issuer must implement internal policies that are compliant
with Reserve Bank requirements, including at a minimum:
a. Comprehensive risk management;
b. Capital adequacy
c. Liquidity management;
d. System integrity and audit;
e. Business continuity and contingency plan;
f. Security of the network used for communication and transfers;
g. Comprehensive consumer experience and protection management;
h. Complaints, dispute management arrangements and redress
mechanisms;
i. Interoperability and Infrastructure sharing;
j. Approved best practices and standards including;
i. ICT and Technical
ii. Governance

k. Management of agents;
l. Anti-money laundering and counter financing of terrorism

5 Operational Requirements
5.1 An operator or an issuer shall establish adequate operational
arrangements for its scheme or product, which shall include:
a. rules and procedures setting out the rights, responsibilities and
liabilities of the issuer, third parties providing parts of the activities
in outsourcing, agents, merchants, users and any other relevant
stakeholder;

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 b. measures to ensure safety, security and operational reliability of the
scheme or product, including contingency arrangements and disaster
control procedures, to be applied to all relevant systems, and
platforms whether internal or outsourced;

c. adequate interfaces to ensure interoperability, i.e. that payment

instruments belonging to a given scheme may be used in other
systems installed by other schemes;

d. separate records and accounts for its activities related to the retail
payment instrument that it provides from its other activities.

5.2 The Reserve Bank reserves the right to impose to issuers of retail
payment instruments any relevant standards to ensure safe and reliable
issuance and management of an instrument. More specifically, the
Reserve Bank reserves the right to impose on issuers such conditions and
limits on the nature of e-money products that may be offered, the
quantity of e-money products that may be issued over a particular period
and limits on the monetary values that may be transferred or funded to
particular e-money products.

6 Capital Requirements

6.1 An operator shall be required to have an initial minimum capital of one

million (United Sates Dollars) and should comply to the following
requirements:
a. Submit to the Reserve Bank a certified true copy by the chairman, a
director and auditors of the operator’s balance sheet, showing the
authorised and paid-up capital as well as any unencumbered reserve
funds;
b. no part of the minimum capital of the operator or institution shall
consist of borrowed funds;
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 c. no individual or related parties and interests may own or control,
directly or indirectly, more than twenty-five per centum of the
voting shares of the applicant or operator;

6.2 On an going basis or as prescribed by the Reserve Bank the following

must be maintained continuously:
a. A payment systems provider should maintain a viable recovery or
orderly wind-down plan and should hold sufficient liquid net assets
funded by equity to implement this plan.
b. At a minimum, a payment systems provider should hold liquid net
assets funded by equity equal to at least six months of current
operating expenses. These assets are in addition to resources held to
cover participant defaults or other risks covered under the financial
resources principles.
c. However, equity held under international risk-based capital
standards can be included where relevant and appropriate to avoid
duplicate capital requirement.

6.3 An issuer or operator in operation at the coming into effect of these

guidelines and not compliant shall be required to build its capital to the
prescribed level not later than two years of the date of issuance of the
guidelines.

7 Risk Management
7.1 An operator or issuer shall establish appropriate risk management
mechanisms to mitigate financial risk and ensure safety and integrity of
the payment system and relevant transfers. Likewise, it shall implement
operational and security safeguards in proportion to the scale and
complexity of the scheme.

7.2 An operator or issuer shall ensure that they have resources and capacity
in terms of expertise, hardware, software, and other operating capabilities

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 to deliver consistently reliable service. Measures to ensure operational
reliability shall include:
a. an appropriate system(s) which is robust in its design, development,
testing, implementation and monitoring;
b. strong internal controls for systems and personnel administration;
c. comprehensive and well documented operational and technical
procedures to ensure operational reliability;
d. a system(s) designed with sufficient capacity which is monitored and
upgraded ahead of business changes;
e. robust clearing and settlement arrangements;;
f. robust business continuity, including a reliable back-up system;
g. timely and accurate audit trail and the capability to provide
statistical information and reports;
h. adequate accounting systems and proper reconciliation processes.

8 Interoperability and Infrastructure Sharing

8.1 All payment facilities to be introduced by operators shall

conform to specified National Payment System requirements to
attain infrastructure sharing and interoperability.

8.2 An operator or issuer shall ensure consistently that the

infrastructure and technological equipment set up are
interoperable and scalable as required by the Reserve Bank
from time to time.

8.3 No operator or issuer shall enter into infrastructure sharing

agreement without Reserve Bank approval.

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9 Records Management

9.1 The payment system providers and participants shall retain

manual and or electronic records regarding the payment system
operations.

9.2 The minimum retention period for such records shall be ten
years unless a higher minimum period is prescribed in terms of
AML/CFT or electronic communications legislation in the
country.

10 Outsourcing

10.1 An operator or issuer intending to outsource operational or managerial

functions shall require specific authorization from the Reserve Bank.

10.2 Outsourcing of important operational or managerial functions may not be

undertaken in such a way as to impair the quality of the issuer’s internal
controls and the ability of the Reserve Bank to monitor compliance with
all obligations laid down in these Guidelines or any further measures
adopted to ensure oversight of the national payment system.

10.3 For the purposes of sub-section 10.2, a function shall be regarded as

important if a defect or failure in its performance, in the view of the
Reserve Bank, would materially impair the continuing compliance of an
issuer with the requirements of the applicable laws, these Guidelines
and/or the terms of its authorization, or would otherwise substantially
compromise its financial performance, or the soundness or the continuity
of its services.

10.4 Once an issuer outsources important functions, it must comply with the
following conditions: (i) the outsourcing shall not result in the delegation

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 by senior management of its responsibility; (ii) the relationship and
obligations of the issuer towards the users of any relevant payment
instrument shall not be altered; (iii) the conditions with which the issuer
is to comply in order to be authorised and remain so in accordance with
these Guidelines shall not be undermined; and (iv) none of the other
conditions subject to which the authorization was granted shall be
removed or modified.

11 Use of Agents
11.1 When an issuer intends to offer a payment instrument to users through an
agent network, it shall submit the following minimum information and
documents to the Reserve Bank:
(a) criteria for appointing the agents:
i. the name, address;
ii. nature of business;
iii. company/individual profile;
iv. major source of funds;
v. Valid license/vendor number or Partnership Agreement,
Certificate of Incorporation, CR14(for Corporates);
vi. Tax clearance certificates(where necessary)
vii. Capacity (e.g. Electronic float and cash to assist customers);
viii. Signed agent application form;
ix. Passport size photo of the directors;
x. Copies of directors’ National Identity Documents (ID) or
individual owners;
xi. Proof of residence of the directors/owners or proof of physical
address for business premises (For all forms of business, proof
of residence can be, bank statement or utility bill that is not older
than 3 months, a valid trading license showing the business
address;

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 xii. a copy of lease agreement for rented premises supported by
landowners’ ID or an affidavit with a Commissioner of Oaths or
police stamp, In rural areas where this may not always be
available;
xiii. a copy of ID of the landowner and a letter from the landowner
confirming that they are operating from their premises;

(b) All documents submitted should be certified copies. A description

of the internal control mechanisms that will be used by agents in
order to comply with the obligations in relation to anti-money
laundering (AML) and combating terrorist financing (CFT);
(c) The identity of directors and persons responsible for the
management of the agents to be used in the provision of the
services;
(d) Notwithstanding that, the minimum fitness and propriety
requirements for all agents shall be applied accordingly to
promote financial inclusion without compromising risk
management.
(e) Copy of the agency agreement, containing at a minimum clear
indication of tasks of the agents and consequent allocation of
liabilities, responsibilities and duties of the agents towards the
users, and the applicable liquidity and security standards.

11.2 When the Reserve Bank receives the information in accordance with sub-
section 11.1, it shall review it and decide whether to authorise the
agreement as contemplated or with amendments. No agent shall carry
out any activities under the agency agreement prior to this being
authorised. Before authorizing the agreement, the Reserve Bank may, at
its discretion, take further action to verify the information received. If,
after taking action to verify the information, the Reserve Bank is not
satisfied that the information provided is accurate, it shall reserve the
right to deny the authorization.

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11.3 The principal shall ensure that agents acting on its behalf inform
customers of their acting as agents of a specific principal and shall
publish their list on its website.

11.4 The issuer is expected to supervise, equip and train its contracted agents.
Issuer is also expected to provide compliance reports on their agents as
advised by the Reserve Bank from time to time,

11.5 Exclusivity agreements shall be prohibited in so far as they limit

competition in the country and/or foreclose the market. However any
exclusivity agreement shall be duly submitted to the Reserve Bank for
consideration. The provider must provide justification for such
arrangements to be considered for approval by the Reserve Bank.

12 Liability
12.1 When an operator or an issuer relies on third parties for the performance
of operational or managerial functions, they shall take reasonable steps to
ensure that the requirements of these Guidelines and any further
measures by the Reserve Bank are complied with.

12.2 The operator or issuer shall remain fully liable for any acts of their
employees, or any agent, branch or entity to which activities are
outsourced.

13 Remittances
13.1 All authorised or licensed remittances service providers, both domestic
and international, for both in-bound and out-bound remittances need to be
registered, licensed and are subject to regulation by the Reserve Bank.

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13.2 Payment services providers, participants and agents shall ensure
compliance with local and international remittances standards in line with
market developments for the benefit of consumers.

14 Rights and Responsibilities of Each Stakeholder

14.1 An issuer must ensure that the rights and responsibilities of all
stakeholders (including users and merchants) are clearly set out in the
relevant contracts.
14.2 The terms and conditions for the use of retail payment instruments should
be easily accessible and understood by the user.
14.3 An issuer shall put in place a system to maintain accurate and complete
record of transactions executed by the relevant user.
14.4 At a minimum, users are required to observe the following:

a. Keep the personal identity number (PIN) confidentially;

b. Continuously familiarize with the product terms and conditions;
c. Not use or allow their gadgets to be used for illegal activities; and
d. Immediately and procedurally raise or report any anomaly observed or
suspected.

15 Consumer Protection, Education and Privacy

15.1 Every issuer must continuously put in place measures to address
consumer protection, privacy, education, and awareness.
15.2 The issuer should in particular ensure that it:
a. adopts general policies on safe operations, privacy of customers
information, reliable and quality service, transparency of product and
services, and prompt response to inquiries, complaints, refund
demands and disputes;

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 b. ensures that users understand terms and conditions on a continuous
basis;
c. puts in place effective and efficient dispute resolution mechanisms;
d. provides adequate warning statements to users and merchants on any
known pending or potential threats, lost or stolen payment
instruments or access devices, or fraudulent transactions.

15.3 An issuer shall provide clear terms and conditions for use of the
instrument, which should be made publicly available. The issuer must
obtain acknowledgement from its users and merchants prior to their
participation in the scheme. In this regard automatic registration of
customers is not permissible.

15.4 Details of scheme should include at a minimum:

a. type of payments and services that can be made;
b. applicable fees and charges which the user should be made aware of
before conducting any payment transaction;
c. availability of user’s statement;
d. procedures for reporting losses or stolen instruments/devices and
means to lodge a complaint;
e. refund policies;
f. rights and responsibilities of users and merchants;
g. termination rules;
h. redemption procedures, when relevant;
i. dormancy account and unclaimed funds requirements and
procedures
j. Procedures in the event of death or incapacitation of the user and a
monthly return should be submitted to the Reserve Bank.
15.5 A monthly return on dormancy account should be submitted to the
Reserve Bank;

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15.6 Approved procedures for reversal of funds should at a minimum provide
for the following:
a) Reversal of funds should be procedurally conducted immediately
after the operator receives the request from the sender that the
transaction was a result of genuine error.
b) The receiver of the funds should have his/her wallet account frozen
by the same amount and advised immediately.

15.7 A record of all reversals should be kept and submitted to the Reserve
Bank through monthly return or periodic return.

16 Prudent Management of Funds

All operators should observe the following minimum standards to ensure

prudent management of funds:
16.1 An issuer shall manage the funds collected from users prudently to ensure
timely refund of balances to users and payment to merchants.
16.2 Issuers shall also ensure that they have sufficient liquidity for their daily
operations.
16.3 Funds collected from or on behalf of users should be deposited and
managed separately from the issuer’s working capital funds.
16.4 An issuer of e-money shall have funds deposited into an escrow/trust
account with one or more licensed deposit taking institutions (DTIs)
before e-money is issued. In fact the e-money issued must be less than or
equal to the actual deposits or transfers presented for exchange.
16.5 All charges or credits should be debited or credited immediately to the
customer account at the time of transaction or redemption
16.6 There should be integration of systems between the DTI and the e-
money issuer to promote efficient, safe and sound payment systems.

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17 Management of Escrow /Trust /Banking Services Account
17.1 An issuer of e-money or operator shall establish a trust account in a
deposit taking financial institution for purposes of effective management
of consumer funds.
17.2 Every trust account shall be administered by a board of trustees approved
by the Reserve Bank in line with an approved constitution and trust deed.
17.3 The issuer shall ensure that, the necessary documentation to
operationalize the trust account are in place and include among others the
following:
a) Trust Deed, and
b)Charter or constitution

18 Reporting Requirements
18.1 An issuer shall submit or avail to the Reserve Bank:
a. Its audited financial statements, management accounts, internal
and external audit reports.

b. Weekly, monthly and ad-hoc transaction reports showing, among

others, transactions with agents and between agents, total number
of cash in/ cash out, bills paid, transactions specified per gender
age, region and any other data the Reserve Bank may from time to
time consider necessary for its oversight activities.

c. Weekly and monthly reconciliation statement between the trust

account balance and the total e-money in circulation.

d. Periodic and ad-hoc reports on consumer protection issues as

defined by Reserve Bank.

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e. Mechanism to enable on line read only functions to the platform
for monitoring purposes.

19 Compliance with AML/CFT legislation

19.1 Providers of retail payment systems and instruments
shall meet the requirements and comply with
AML/CFT procedures, as well as regulations and
guidelines issued by the Financial Intelligence Unit or
Reserve Bank.

19.2 Payment system providers shall also ensure that any

third party acting on their behalf or agents shall
comply with relevant requirements.

19.3 The terms of this section shall not imply by any

means that agents are not liable for their actions under
existing legislation on AML/CFT and other relevant
legislation of the country.

20 Prohibitions
20.1 An issuer shall not:
a. issue e-money at a discount;
b. use the money collected from or on behalf of
users to extend loans;
c. extend credit to the user, or pay interest or profits
on the e-money balances, or anything else that
would add to the monetary value of the e-money;
d. associate, link or use the e-money scheme or
platform to conduct or facilitate illegal activities.

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 e. Provide any other service not approved by
Reserve Bank

20.2 Merchants and agents who are also users of e-money

shall maintain a separate user account for making
payments for their own behalf.

21 Measures on Electronic Transfers and Electronic

Operations
21.1 Operators of electronic payment systems and issuers
of retail payment instruments under these Guidelines
shall comply with all relevant laws and regulations on
electronic transfers, and comply with any of their
requirements for irrevocability of orders, finality of
payments and interoperability of systems.

21.2 Rules on authentication of payment transactions,

execution of payment orders and other rules on users’
protection as established by the Reserve Bank from
time to time and/or relevant payment systems shall be
applied.

22 Electronic Transactions Limits

22.1 The Reserve Bank, within its oversight powers, may
from time to time impose limits on any kind of
transactions to be executed by specific instruments,
such as internet banking, card and/or mobile
payments, as well as thresholds and number of
transactions permitted within a certain period for
individual instruments.

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23 Existing Schemes, Systems or Products
23.1 Any entity offering retail payment instruments or
operating retail payment systems on the effective date
of these Guidelines shall structure their organization,
administration, and operations to the requirements of
these Guidelines within six months from the effective
date of these Guidelines or any extended period as the
Reserve Bank may determine.

23.2 Banks or other entities jointly providing payment

services linked to bank accounts and retail payment
instruments as covered by these Guidelines, shall
obtain an authorization for the payment instrument or
scheme covered by these Guidelines.

23.3 When submitting information and documents to seek

authorization from the Reserve Bank under these
Guidelines, entities seeking authorization must
indicate and provide documentation on existing links
between the different payment products offered,
irrespective of the need for a bank account, measures
in place to mitigate the risks assessed, as well as any
cases of shared use of infrastructures or operations,
including the use of agents for the provisions of
different financial services.

24 Payment Systems Associations

24.1 Payment systems providers, participants and agents
are required to establish, join and participate in the
respective associations to facilitate collaboration and

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 standardization of business conduct for the
development of payment systems.

24.2 The associations should be governed by a constitution

or charter approved by the Reserve Bank to ensure
regulatory compliance.
Effective date of guidelines
The effective date of operation of the Guidelines is 1 July 2017

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