National Payment Systems Act, 2015 (No. 4 of 2015)

The National Payment Systems Act, 2015 (Act No. 4 of 2015) is Tanzania's primary statute governing payment, clearing and settlement systems. Published on 22 May 2015, it consolidated the legal basis for the Bank of Tanzania's (BoT) longstanding oversight of payment systems and created a comprehensive licensing regime for non-bank participants, including the mobile money operators that had grown rapidly since 2008. The Act makes provision for the regulation and supervision of payment systems, the regulation of electronic payment instruments and electronic money, the licensing and conduct of payment system service providers, the validity and enforceability of netting arrangements, and the finality and irrevocability of settlement. Scope and applicability: the Act applies to any person operating or participating in a payment system in Tanzania, and to issuers of electronic money and electronic payment instruments. Under section 15, a body corporate that is not a bank or financial institution must obtain a licence from the BoT before operating a payment system, while banks and financial institutions operating payment systems by virtue of their banking business require the BoT's approval. The BoT is designated as the regulator and overseer of the entire national payment system, with power to issue regulations, directives, circulars and guidelines, to designate systemically important systems, and to conduct oversight, inspection and enforcement. Core obligations: licensed and approved participants must comply with prudential, operational and consumer-protection requirements set out in the Act and its subsidiary regulations (notably the Payment Systems (Licensing and Approval) Regulations, 2015 and the Payment Systems (Electronic Money) Regulations, 2015). The Act requires non-exclusive use of agents, segregation and safeguarding of customer funds, and reporting to the BoT. It provides statutory protection for netting and settlement finality so that settled transactions cannot be unwound by insolvency proceedings, underpinning the stability of the Tanzania Interbank Settlement System (TISS) and retail systems. Supervision and enforcement: the BoT may license, refuse, suspend or revoke licences, impose corrective measures and administrative penalties, issue directives, and require information from participants. Operating a payment system without the requisite licence or approval is an offence. The Act was subsequently supplemented by transaction-levy regulations (2022) and remains the umbrella legislation under which Tanzania's electronic money, agent and licensing rules are made. Tanzania's mobile money sector is among the largest in Africa by transaction volume, and this Act provides its foundational legal architecture.

1. 1Establishes the Bank of Tanzania as sole regulator and overseer of all payment, clearing and settlement systems
2. 2Section 15: non-bank entities must obtain a BoT licence to operate a payment system; banks/financial institutions require BoT approval
3. 3Empowers the BoT to issue subsidiary regulations, directives, designate systemically important systems, and conduct oversight and inspection
4. 4Provides statutory settlement finality and enforceability of netting arrangements, protected from insolvency claw-back
5. 5Requires non-exclusive use of agents and safeguarding of customer/electronic money funds
6. 6Creates offences and administrative penalties for operating without a licence or approval, with powers to suspend or revoke licences