Payment Systems (E-Money) Regulations, 2019

The Payment Systems (E-Money) Regulations, 2019 are subsidiary legislation made by the Reserve Bank of Malawi (RBM) under the Payment Systems Act, 2016 and gazetted in 2019. They govern the operations of electronic money issuers in Malawi and are the principal instrument under which mobile money and other e-money services are licensed and supervised. The Regulations apply to banks and non-bank institutions that issue electronic money and to their agents and related participants. They establish the requirement to obtain authorisation from the Reserve Bank before issuing electronic money, and set out the licensing criteria, including legal form, fit-and-proper standards for shareholders, directors and management, governance, risk-management, and operational and security capacity. A central requirement is the protection of customer funds: e-money issuers must hold the funds received from customers in exchange for electronic money in a trust account (or accounts) at a licensed bank, fully backing the outstanding e-money float, ring-fenced from the issuer's own funds and creditors and not used for the issuer's operations or lending. The Regulations address float and liquidity management, agent network management and oversight, interoperability, customer due diligence and KYC tiers with corresponding transaction and balance limits, anti-money-laundering and counter-terrorist-financing compliance, consumer protection and disclosure (including complaints handling and fee transparency), data and system security, and periodic reporting to the Reserve Bank. The RBM supervises licensed issuers, may issue directives and impose conditions, and may take enforcement action including penalties, suspension or revocation of authorisation. Read together with the Guidelines for Applicants for E-Money Schemes, 2019 and beneath the umbrella Payment Systems Act, the Regulations are the operative licensing and conduct instrument for e-money and mobile money in Malawi and remain in force.

1. 1Require RBM authorisation before issuing electronic money and set licensing criteria (legal form, fit-and-proper, governance, operational and security capacity)
2. 2Require customer funds to be held in trust account(s) at a licensed bank, fully backing the e-money float and ring-fenced from the issuer's funds and creditors
3. 3Govern float and liquidity management, agent network management, and interoperability
4. 4Impose customer due diligence/KYC tiers with transaction and balance limits and AML/CFT compliance
5. 5Require consumer protection, disclosure, complaints handling and periodic reporting to the RBM
6. 6Confer supervision and enforcement powers, including penalties, suspension or revocation