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BoB takes over multi-billion pula mobile money market

Touch of a button: Mobile money has exploded in Botswana PIC: MORERI SEJAKGOMO
The country's multi-billion pula mobile money sector has come fully under the authority of the Bank of Botswana (BoB).

In the new arrangement, Mascom, Orange and BTC Mobile are now required to register separate companies for the service, provide P2 million as minimum capital and adhere to strict anti-money laundering provisions.

At about 752,000 subscribers as at March 2019, Orange Money is by far the biggest mobile money service, followed by Mascom’s MyZaka with about 398,000 subscribers. BTC Mobile’s SMEGA, which was relaunched last June, trails the market with 240 subscribers. Other mobile payment providers are also operational in the market.

Mobile money market services began in the country in June 2011, with the value of transactions shooting up from P175 million in that year to more than P1 billion in 2014.

According to the Electronic Payment Services (EPS) regulations, which kicked in on January 1, the BoB has now taken over the regulation of mobile money services, introducing new operating requirements. Previously the Botswana Communications Regulatory Authority supervised mobile money providers working in a “less formalised” arrangement with the BoB and the Financial Intelligence Authority.

“The EPS regulations establish a legal framework for licencing, regulation and oversight for payments services providers, consistent with the bank’s mandate of ensuring an efficient payment mechanism,” BoB spokesperson, Seamogano Mosanako said in an emailed response to BusinessWeek enquiries this week.

“The regulations make provision for the types of entities permitted to offer electronic payment services in Botswana, entry requirements, governance and market conduct issues.” According to the regulations, those mobile money service providers who have other commercial business lines other than mobile money will have to establish separate companies and adhere to the minimum capital requirements set by the BoB.

BusinessWeek is informed that Orange Botswana, Mascom and BTC Mobile are at different stages of applying for the new licences to run their mobile money services. The companies are required to maintain at least P2 million as an

ongoing capital requirement and adhere to strict account and cash management protocols including monthly reports to the BoB. The central bank will now vet all senior officers appointed to run mobile money services and these will have to pass the same “fit and proper” test applied to commercial banks.

The new regulations also set the maximum limit for a single mobile money transaction at P5,000, the limit for daily transactions at P10,000 for any customer and the monthly aggregated limit at P20,000. The limits are generally higher than what existing mobile money services provide with Orange Money’s daily limit at P4,000 and monthly limit at P7,000.

Orange Money director, Seabelo Pilane told BusinessWeek the group had submitted its licence application under a new separate business entity called Orange Money Botswana.

“Orange Money Botswana now has the sole mandate to provide mobile financial services in the country thus leaving Orange Botswana to focus on driving the telecommunications business,” he said in an emailed response.

“At the moment we have not encountered any significant difficulties. Fortunately the BoB has been available to assist with providing clarity where needed.

“The most challenging aspect was balancing the allocation of resources to this ‘project’ and ensuring we are able to deliver within the year timeframe we had to comply – at the same time ensuring we provide our customers with service they expect from Orange.”

He said the main impact on the existing business would be the adjustments Orange Money is making to already existing processes, policies and controls around governance, reporting, anti money laundering, IT & security and others.

“The arrival of the regulations has provided us with clarity on the regulators’ expectations.

“It is our belief that the regulations will benefit all stakeholders and help strengthen competition, ensure adherence to a specific standard and most importantly help protect consumers.”




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