Payment Systems Act, 2016 (Act No. 15 of 2016) [Chapter 74:01]

The Payment Systems Act, 2016 (Act No. 15 of 2016, Chapter 74:01) is the principal legislation governing payment systems in Malawi and the legal foundation for the Reserve Bank of Malawi's (RBM) regulation and oversight of the sector. Its principal objective is to provide for the regulation and oversight of payment, clearing and settlement systems, payment instruments, remittance service providers, electronic money transfers, card issuers and travellers' cheque agencies, by promoting the soundness, integrity, safety, efficiency and reliability of payment systems, providing minimum standards for the protection of customers, and determining the respective rights and obligations of system operators, participants and their customers. The Act applies to banks and non-bank financial institutions, mobile payment system operators, remittance service providers, card issuers and other persons licensed or authorised by the Reserve Bank. A central prohibition is that no person may establish or operate a payment, clearing and settlement system or service, provide remittance or electronic money transfer or mobile payment services, or issue payment instruments, without authorisation from the Reserve Bank. Section 14 requires all system operators to have a registered office in Malawi. The Act empowers the Reserve Bank to stipulate, through directives, more detailed requirements on activities, legal form, fit-and-proper management, capital, risk management, security and other matters applicable to system operators, and to supervise, inspect and enforce compliance, including through sanctions. It also provides for settlement finality and the enforceability of netting to limit systemic risk, and for customer-protection minimum standards. As the umbrella statute, the Act is operationalised by subsidiary instruments including the Payment Systems (E-Money) Regulations, 2019 and the Guidelines for Applicants for E-Money Schemes, 2019, and remains in force as the central reference instrument for fintech and digital-payment regulation in Malawi.

1. 1Provides for the regulation and oversight of payment, clearing and settlement systems, payment instruments, e-money transfers, remittance services and card issuers by the Reserve Bank
2. 2Prohibits operating a payment system or providing remittance, e-money, mobile payment or payment-instrument services without RBM authorisation
3. 3Requires system operators to maintain a registered office in Malawi (s.14)
4. 4Empowers the RBM to set detailed requirements by directive on activities, legal form, fit-and-proper management, capital, risk management and security
5. 5Provides minimum standards for customer protection and for settlement finality and netting
6. 6Basis for the Payment Systems (E-Money) Regulations, 2019 and E-Money scheme guidelines