Payment Systems (Electronic Money) Regulations, 2015 (GN No. 447 of 2015)

The Payment Systems (Electronic Money) Regulations, 2015 (Government Notice No. 447 of 2015), made by the Bank of Tanzania (BoT) under the National Payment Systems Act, 2015 and gazetted on 16 October 2015, are the core subsidiary instrument governing electronic money (e-money) and mobile money in Tanzania, one of Africa's largest mobile money markets by transaction volume. They set out the conditions under which a person may be licensed to issue e-money and the prudential and operational safeguards that protect customer funds. Scope and applicability: the Regulations apply to electronic money issuers (EMIs), whether banks, financial institutions or non-bank entities, and to the agents through which e-money services are distributed. A non-bank or non-financial institution wishing to issue e-money must establish a separate legal entity dedicated to that purpose and obtain a licence from the BoT. Core obligations centre on the protection of customer funds. An EMI must open and maintain a trust account in a licensed bank or financial institution, and must ensure that the total value of electronic money in circulation in its network is, at all times, fully backed by and equivalent to the funds held in that trust account (the 1:1 backing rule). Customer funds in the trust account are ring-fenced from the issuer's own assets and from the claims of its creditors. To limit concentration risk, a bank may not hold trust-account deposits exceeding fifty per cent of its core capital. EMIs must meet minimum capital requirements (Regulations 13 and 14 provide for evidence of minimum capital of TZS 500,000,000), maintain governance and risk-management systems, and observe limits on transactions and balances calibrated to customer due-diligence tiers. Agents and consumer protection: e-money services may be distributed through agents, but agency must be non-exclusive, allowing an agent to serve multiple issuers. Issuers remain fully responsible for the acts of their agents. The Regulations impose disclosure, transparency, complaints-handling and AML/CFT obligations, and require interoperability and reporting to the BoT. Supervision and enforcement: the BoT supervises EMIs through reporting, inspection and audit of trust accounts, and may impose corrective measures, penalties, and suspension or revocation of a licence for breach. Together with the Payment Systems (Licensing and Approval) Regulations, 2015, this instrument operationalises the licensing and prudential regime under the parent Act.

1. 1Non-bank e-money issuers must incorporate a separate legal entity and obtain a BoT licence
2. 21:1 backing rule: e-money in circulation must at all times equal funds held in a trust account at a licensed bank
3. 3Customer funds ring-fenced in trust account, protected from issuer creditors; a bank may not hold trust deposits exceeding 50% of its core capital
4. 4Minimum capital requirement evidenced under Regulations 13-14 (TZS 500,000,000)
5. 5Non-exclusive agents permitted; issuer remains liable for agent conduct
6. 6Tiered customer due diligence, transaction/balance limits, AML/CFT, disclosure and complaints-handling obligations
7. 7BoT supervision through reporting, inspection and trust-account audit, with power to penalise, suspend or revoke licences