#8d6b16
Bank and Non-bank partnerships
Overview
| ROLE IN DELIVERY OF E-MONEY SERVICE | WHO PLAYS THIS ROLE? | |
|---|---|---|
| BANK | NON-BANK | |
| License to issue e-money | ||
| Direct communication with regulator to request authorization for, e.g., new services or revised transaction limits | ||
| Contractual agreement with customer | ||
| Branding of e-money service | ||
| Delivery of e-money service (directly and/or through agent network) | ||
| Safeguarding customer funds | ||
Bank and Non-bank partnerships
ADVANTAGES & DISADVANTAGES
Advantages
- Enables central bank to directly supervise banks, without restricting non-banks from design and branding of e-money services.
- Historically used to enable partnerships between banks, telecom operators and fintech.
- May need only limited updates to existing regulations.
Disadvantages
- Lack of direct communication between financial authority and non-bank – may increase risk of undetected operational and consumer protection abuses.
- Requires financial regulator to coordinate with other regulators (e.g., telecom regulator) often in an ad-hoc manner.
- Non-banks require bank approval for new products and services, changes to account limits, etc.
- Telecom operators may use control of telecom channels to restrict access among competitors.
Bank and Non-bank partnerships
Country Examples
South Africa
MTN South Africa - MoMo
