Overview
Are different agent tiers (e.g., master agents and retail agents) permitted?
Agent tiers may play an important role in countries with varying levels of financial inclusion, financial awareness, or digital and financial sector infrastructure. It may also allow DFS providers to better deploy and manage agent networks.
ARGUMENTS
Arguments for Stricter Limits
Effective oversight
Requiring DFS providers to maintain a contractual relationship with each individual agent may incentivize better agent oversight.
Arguments for Greater Flexibility
Impact on financial inclusion
Allowing DFS providers to sign one contract that provides access to hundreds, or thousands of agents can expedite agent network development and foster uptake and financial inclusion.
Efficiency
Allowing DFS providers to outsource agent network management to a specialist organization may be more efficient, enabling faster rollout and/or lower costs.
CONSIDERATIONS
- Agent tiers play an important role in countries with limited traditional banking infrastructure, particularly in rural and remote areas.
- Regulators may wish to explicitly allow agent tiers, subject to the requirement that any DFS provider engaging in a tiered agent relationship remains ultimately responsible for the actions of its agents and any sub-agents.
- In countries where the permissibility of agent tiers is unclear, regulators could provide necessary clarity through relevant regulatory documents.
Country Examples
Country Examples
- In many countries, the permissibility of agent tiers is not specified in DFS regulation.
- In countries with a civil-law legal tradition, this lack of clarity may lead to an interpretation that agent tiers are prohibited.
In India, banks only manage 31% of agents, while the remaining 69% is managed by Agent Network managers. It present many advantages compared to agents managed by banks, such as interoperability, a wider variety of services and a higher average number of daily transactions.
