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The Regulation of Mobile Money pp 269–304Cite as

Palgrave Macmillan

Malaŵi’s Existing Regulatory Framework of Mobile Money

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Abstract

This chapter analyses the existing regulatory framework around mobile money in Malaŵi (Malawi) and argues that the issues faced by Malaŵi are representative of sub-Saharan Africa. In analysing the plurality of regulators involved with mobile money, it concludes that the traditional banking architecture is ill-suited for mobile money and that the plurality of regulators may lead to a lack of regulatory focus and regulatory arbitrage. The hybrid nature of mobile money is at the centre of the regulatory incoherence. Mobile money while being a financial service also is a service that rides on the rail of the telecommunication service. Since in most countries, mobile money is offered by mobile network operators, regulating it offers a challenge to the financial regulator and the communications regulator.

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Notes

  1. 1.

    Scott (2001), p. 346.

  2. 2.

    Teubner (1993), generally.

  3. 3.

    Monolith is used deliberately instead of peak. A monolith is a massive rock and it aptly describes a unified regulator laden with many responsibilities. The term ‘monolith’ was used interchangeably with ‘peak’ by Richard Parlour (2014) Strategic Issues in Financial Markets Regulation (2014) Post-Graduate Seminar, University of Warwick, 5 March 2018.

  4. 4.

    Singh (2007), p. 25.

  5. 5.

    Ibid., p. 26.

  6. 6.

    Section 8(2) Financial Services Act (Malaŵi, 2010).

  7. 7.

    Section 68, ibid.

  8. 8.

    Finance Bank of Malaŵi, Prime Insurance Limited and Citizen Insurance Limited.

  9. 9.

    In the Matter of Citizen Insurance Company Limited Exparte the Registrar of Financial Services, Commercial Case No. 55 of 2011 HC (Malaŵi), http://www.malawilii.org/mw/judgment/high-court-commercial-division/2012/5/. 27 February 2018.

  10. 10.

    Ibid.

  11. 11.

    Section 73(6) Financial Services Act (Malaŵi, 2010).

  12. 12.

    RBM (2017).

  13. 13.

    The country has only 4 cities, Blantyre, Zomba, Lilongwe and Mzuzu. Zomba was the old capital.

  14. 14.

    SADC (2011) SADC Bankers: Reserve Bank of Malawi (Committee of Central Bank Governors in Southern Africa Development Community), http://www.sadcbankers.org/SADC/SADC.nsf/LADV/E4E3EF0D1F5967B8422576740044D454/$File/Malawi-.pdf. 10 October 2018.

  15. 15.

    Among the big banks, only Standard Bank has its headquarters in Lilongwe. About a decade or so ago, NBS Bank moved from Lilongwe to Blantyre.

  16. 16.

    Payment Systems Act (Malaŵi, 2016).

  17. 17.

    Electronic Transactions Act (Malaŵi, 2016).

  18. 18.

    Guidelines for Mobile Payment Systems (Malaŵi, 2011).

  19. 19.

    Memorandum to the Payment Systems Bill 22 of 2015 (Malaŵi), http://www.parliament.gov.mw/docs/bills/BILL22_2015.pdf. 19 July 2018.

  20. 20.

    Section 4 Payment Systems Act (Malaŵi, 2016).

  21. 21.

    Section 5, ibid.

  22. 22.

    Section 2, ibid.

  23. 23.

    Sections 4(d) and 12(1), ibid.

  24. 24.

    Guidelines for Mobile Payment Systems (Malaŵi, 2011).

  25. 25.

    Section 44(1) Payment Systems Act (Malaŵi, 2016).

  26. 26.

    Section 10, ibid.

  27. 27.

    Section 11, ibid.

  28. 28.

    Section 12(2), ibid.

  29. 29.

    Section 15(1), ibid.

  30. 30.

    Section 16(1), ibid.

  31. 31.

    Section 16(3), ibid.

  32. 32.

    Part V Financial Services Act (Malaŵi, 2010).

  33. 33.

    Section 16(2) Payment Systems Act (Malaŵi, 2016).

  34. 34.

    Section 18, ibid.

  35. 35.

    Section 21, ibid.

  36. 36.

    Section 40(1), ibid.

  37. 37.

    Memorandum to the Electronic Transactions Bill, No. 11 of 2015 (Malaŵi), http://www.parliament.gov.mw/docs/bills/BILL11_2015.pdf. 19 July 2018.

  38. 38.

    Ibid.

  39. 39.

    Ibid.

  40. 40.

    Section 26(1) Electronic Transactions Act (Malaŵi, 2016).

  41. 41.

    Section 20(1), ibid.

  42. 42.

    Section 24(1), ibid.

  43. 43.

    Section 24(2), ibid.

  44. 44.

    Section 37(1), ibid.

  45. 45.

    Section 37(1), ibid.

  46. 46.

    Section 2, ibid.

  47. 47.

    Ibid.

  48. 48.

    Section 9, ibid.

  49. 49.

    Section 14, ibid.

  50. 50.

    Section 8, ibid.

  51. 51.

    Section 12(1), ibid.

  52. 52.

    Section 12(2), ibid.

  53. 53.

    Section 12(3), ibid.

  54. 54.

    Section 39(1), ibid.

  55. 55.

    Section 39(1)(a), ibid.

  56. 56.

    Section 39(2), ibid.

  57. 57.

    Ruth A Schmidt and others (1999) ‘Deshopping—The Art of Illicit Consumption’ 27 (8) International Journal of Retail & Distribution Management 290, p. 292, http://www.emeraldinsight.com/doi/pdfplus/10.1108/09590559910288569. 4 November 2018.

  58. 58.

    Section 42, Electronic Transactions Act (Malaŵi, 2016).

  59. 59.

    Part VII, ibid.

  60. 60.

    Ayres and Braithwaite (1992), Chapter 2.

  61. 61.

    Section 5 Guidelines for Mobile Payment Systems (Malaŵi, 2011).

  62. 62.

    Section 11.2, ibid.

  63. 63.

    Section 11.10, ibid.

  64. 64.

    Section 11.8, ibid.

  65. 65.

    Section 6.0, ibid.

  66. 66.

    Section 6.0, ibid.

  67. 67.

    Called Mobile Payment Service Provider.

  68. 68.

    Called Trust Account in the Guidelines.

  69. 69.

    Section 8 Guidelines for Mobile Payment Systems (Malaŵi, 2011).

  70. 70.

    Section 8.6, ibid.

  71. 71.

    Anon (2016) ‘TNM Mpamba Builds K11m School Block in Chileka’ Nyasa Times (19 December 2016), http://www.nyasatimes.com/tnm-mpamba-builds-k11m-school-block-chileka/. 12 March 2018.

    Blessings Kamanga (2016) ‘Malawi Junior Queens Gets K10mil Airtel Money for Africa Games’ (19 July 2016), http://www.nyasatimes.com/malawi-junior-queens-gets-k10mil-airtel-money-africa-games/#sthash.CdRa3jCd.dpuf. 12 March 2018.

  72. 72.

    Section 8.8 Guidelines for Mobile Payment Systems (Malaŵi, 2011).

  73. 73.

    Section 8.10–2, ibid.

  74. 74.

    Section 8.1, ibid.

  75. 75.

    Section 8.15, ibid.

  76. 76.

    Section 9.1.4, ibid. However, this Act has been repealed and replaced by the Financial Crimes Act 2017.

  77. 77.

    Section 9.3.2, ibid.

  78. 78.

    Section 9.3.3, ibid.

  79. 79.

    Section 9.4.1, ibid.

  80. 80.

    Section 10, ibid.

  81. 81.

    Section 10.1.4 and 10.2, ibid.

  82. 82.

    Section 10.4.5, ibid.

  83. 83.

    Section 10.1.5, ibid.

  84. 84.

    Section 10.4.4, ibid.

  85. 85.

    Section 10.4.6, ibid.

  86. 86.

    Section 10.4.10, ibid.

  87. 87.

    Section 10.4.11, ibid.

  88. 88.

    Section 13.2, ibid.

  89. 89.

    Section 13.1, ibid.

  90. 90.

    Section 10.3.3, ibid.

  91. 91.

    Mbane Ngwira (2017) Spokesperson, Reserve Bank of Malaŵi (10 March 2017) (personal communication).

  92. 92.

    Section 4 Communications Act (Malaŵi, 2016).

  93. 93.

    Author’s personal experience of working with the Department of Posts and Telecommunications: 1991–1993.

  94. 94.

    George RG Clarke, Frew A Gebreab and Henry R Mgombelo (2003) Telecommunications Reform in Malawi (Policy Research Working Papers, The World Bank), p. 3, http://dx.doi.org/10.1596/1813-9450-3036. 2 December 2018.

  95. 95.

    Section 8(1) Communications Act (Malaŵi, 2016).

  96. 96.

    Section 7(1), ibid.

  97. 97.

    Section 91(1), ibid.

  98. 98.

    Section 8(1), ibid.

  99. 99.

    Lucky Mkandawire (2014) ‘Kumbatira Appointed New Macra Boss’ The Nation (2 September 2014), http://mwnation.com/kumbatira-appointed-new-macra-boss/. 8 February 2018.

  100. 100.

    Lucky Mkandawire (2015) ‘Macra, MPC Bosses Swap Posts’ The Nation (6 August 2015), http://mwnation.com/macra-mpc-bosses-swap-posts/. 8 February 2018.

  101. 101.

    Mustafa Kennedy Hussein (2009) ‘Opposition Politics in Malawi: Hopeful Signs Amid the Warnings’ 16 (3) South African Journal of International Affairs, p. 362.

  102. 102.

    Section 5(3) Communications Act (Malaŵi, 2016).

  103. 103.

    MACRA (2014) ‘Strategic Plan 2015–2020’, p. 7 (Malaŵi Communications Regulatory Authority), http://www.macra.org.mw/wp-content/uploads/2014/09/MACRA-Strategic-Plan-2015-2020.pdf. 12 March 2018.

  104. 104.

    Ibid., p. 7.

  105. 105.

    Malaŵi Government (2013) ‘National ICT Policy’ (Malaŵi Government), http://www.macra.org.mw/wp-content/uploads/2014/07/Malawi-ICT-Policy-2013.pdf. 4 November 2018.

  106. 106.

    MACRA (2016) ‘Telecommunications’ (Malaŵi Communication Regulatory Authority), http://www.macra.org.mw/?cat=7. 8 February 2018.

  107. 107.

    Section 31 Communications Act (Malaŵi, 2016).

  108. 108.

    Part XVII, ibid.

  109. 109.

    Part XVIII, ibid.

  110. 110.

    Part XX, ibid.

  111. 111.

    Section 43(1), ibid.

  112. 112.

    Section 174, ibid.

  113. 113.

    Section 28(1)(a), ibid.

  114. 114.

    Section 28(1)(b), ibid.

  115. 115.

    Clarke et al. (2003), p. 21.

  116. 116.

    Interview with Thokozani Chimbe Deputy Director—Legal (Consumer Affairs); Malaŵi Communications Regulatory Authority (3 August 2015).

  117. 117.

    Ibid.

  118. 118.

    Ibid.

  119. 119.

    Ibid.

  120. 120.

    Ibid.

  121. 121.

    Ibid.

  122. 122.

    Ibid.

  123. 123.

    Ibid.

  124. 124.

    Ibid.

  125. 125.

    Ibid.

  126. 126.

    Ibid.

  127. 127.

    Ibid.

  128. 128.

    Part XI, Communications Act (Malawi, 2016).

  129. 129.

    Consumer Protection Act (Malaŵi, 2003), https://www.rbm.mw/Home/GetContentFile/?ContentID=3752. 14 November 2018.

  130. 130.

    Section 10, ibid.

  131. 131.

    CAMA (2016) ‘Consumers Association of Malawi’, https://www.facebook.com/Consumers-Association-of-Malawi-104178233025786/. 20 December 2018.

    Grace Khombe (2014) ‘CAMA to Name and Shame Traders on Receipt Guarantee and Warranty’ Zodiak Online (Lilongwe), http://zodiakmalawi.com/top-stories/cama-to-name-and-shame-traders-on-receipt-guarantee-and-waranty. 14 November 2018.

  132. 132.

    Section 4(1) Consumer Protection Act (Malaŵi, 2003).

  133. 133.

    Section 3, ibid.

  134. 134.

    Section 6, ibid.

  135. 135.

    Section 7, ibid.

  136. 136.

    Section 8(1), ibid.

  137. 137.

    Section 28(1), ibid.

  138. 138.

    Chinyamata Chipeta and Esmie Kanyumbu (2015) Improving Access to Banking Services in Malawi (Southern African Institute for Economic Research), p. 11, http://aercafricaevents.org/wp-content/uploads/2015%20December/Group%20C/C3-Improving-access-to-banking-services-in-Malawi-Chinyamata-Chipeta-and-Esmie-Kanyumbu-FR.pdf. 14 November 2018.

  139. 139.

    Hanna Ziady (2016) ‘Interest Rate Caps Are Now Effective’ The Citizen (10 May 2016), http://citizen.co.za/business/business-news/1109479/interest-rate-caps-are-now-effective/. 5 December 2018.

  140. 140.

    Gladys Nthenda (2018) ‘Parliament Refers Interest Cap Bill to Joint Committee’ Kulinji.com (13 December 2018), https://www.kulinji.com/article/news/2018/parliament-refers-interest-cap-bill-joint-committee. 28 December 2018.

  141. 141.

    Section 30(1) Consumer Protection Act (Malaŵi, 2003).

  142. 142.

    Section 32(1), ibid.

  143. 143.

    Section 32(2), ibid.

  144. 144.

    Section 47(1), ibid.

  145. 145.

    Courts which are below the rank of High Court.

  146. 146.

    Section 50 Consumer Protection Act (Malaŵi, 2003).

  147. 147.

    Section 8(1) Competition and Fair Trading Act, Act No. 43 of 1998 (Malaŵi, 1998), http://www.itu.int/ITU-D/treg/Legislation/Malawi/act43.pdf. 18 November 2018.

  148. 148.

    Section 10(1), ibid.

  149. 149.

    Section 11, ibid.

  150. 150.

    Section 48(1), ibid.

  151. 151.

    Section 49, ibid.

  152. 152.

    Section 32(1), ibid.

  153. 153.

    Section 33, ibid.

  154. 154.

    Section 36, ibid.

  155. 155.

    Kondwani Nankhumwa MP (Minister of Information) (2015) Statement on the Sale of MSB and IndeBank (State House Residences Malaŵi, 2015).

  156. 156.

    Charlotte Wezi Malonda (2016) Approval of the Merger Between FDH Financial Holdings and Malaŵi Savings Bank (MSB) (Competition and Fair Trading Commission, 2016).

  157. 157.

    CFTC (2016) ‘Competition and Fair Trading Commission (Malaŵi)—History’ (Competition and Fair Trading Commission), http://www.cftc.mw/index.php/about-us/history.html. 29 December 2018.

  158. 158.

    Section 35(2), Competition and Fair Trading Act, Act No. 43 of 1998 (Malaŵi, 1998).

  159. 159.

    Lameck Masina (2015) ‘Controversy as Government Sells Malawi Savings Bank’ African Business (7 August 2015), http://africanbusinessmagazine.com/african-banker/controversy-as-government-sells-malawi-savings-bank/. 18 November 2018.

    Happy Soko (2015) ‘Malaŵi Government Drilled Over MSB Sale’ Malaŵi24 (18 March 2015), http://allafrica.com/stories/201503190408.html. 18 November 2018.

    Suzgo Khunga (2015) ‘MSB Sale Fallout, Goes at K9.5 Billion’ The Nation (3 July 2015), http://mwnation.com/msb-sale-fallout-goes-at-k9-5-billion/. 18 November 2018.

  160. 160.

    Section 41 Competition and Fair Trading Act, Act No. 43 of 1998 (Malaŵi, 1998).

  161. 161.

    Section 46, ibid.

  162. 162.

    David S Evans and Alexis Pirchio (2014) ‘An Empirical Examination of Why Mobile Money Schemes Ignite in Some Developing Countries but Flounder in Most’ 13 (4) Review of Network Economics 397, p. 401, https://www.degruyter.com/view/j/rne.2014.13.issue-4/rne-2015-0020/rne-2015-0020.xml. 12 May 2018.

  163. 163.

    Ibid., p. 401.

  164. 164.

    Ibid., pp. 398–9.

  165. 165.

    Ibid., p. 399.

  166. 166.

    Ibid., p. 401.

  167. 167.

    Ibid., p. 400.

  168. 168.

    Ibid., p. 400.

  169. 169.

    Ibid., p. 400.

  170. 170.

    Ibid., p. 435.

  171. 171.

    Section 2 Financial Services Act (Malaŵi, 2010).

  172. 172.

    TNM (2016), p. 10.

  173. 173.

    MACRA (2014), p. 8.

  174. 174.

    Grace Phiri (2015) ‘Telecom Operators’ Performance Poor’ The Nation (18 December 2015), http://mwnation.com/telecom-operators-perfomance-still-poor/. 12 March 2018.

  175. 175.

    Lee and Longe-Akindemowo (1999), p. 55.

  176. 176.

    Ibid.

  177. 177.

    Discussion with a top executive of Airtel Malaŵi in 2012.

  178. 178.

    Dumez and Jeunemaitre (1997), p. 5.

  179. 179.

    Mas and Radcliffe (2011), p. 171.

  180. 180.

    See Hancher and Moran (1998) and Scott (2001).

  181. 181.

    Scott (2001), p. 346.

  182. 182.

    Ibid.

  183. 183.

    Ibid.

  184. 184.

    Joseph Tiampati Ole Musuni (2015) ‘Mobile Money: The Kenyan Experience’ (Government of Kenya), http://www.cto.int/media/events/pst-ev/2015/Broadband%202015/Presentations/Mobile%20Money%20Service%20Joseph%20Tiampati%20Ole%20Musuni.pdf. 28 December 2018.

  185. 185.

    Section 3(3), Central Bank of Kenya Act (Kenya, 1966), https://centralbank.go.ke/images/docs/The_Central_Bank_of_Kenya_Act_1st_January_2014.pdf. 28 December 2018.

  186. 186.

    Section 4A(1)(d), ibid.

  187. 187.

    CAK (2018) ‘Telecommunications Overviews’ (Communications Authority of Kenya), https://ca.go.ke/industry/telecommunication/overview/. 28 December 2018.

  188. 188.

    Kenya Information and Communications Act (1998), http://kfcb.co.ke/wp-content/uploads/2016/07/Kenya_Information_and_Communications_Act.pdf. 28 December 2018.

  189. 189.

    Section 5A(1), ibid.

  190. 190.

    Section 6(1), ibid.

  191. 191.

    Section 6B, ibid.

  192. 192.

    Section 11(1), ibid.

  193. 193.

    Section 11(2), ibid.

  194. 194.

    Section 13(1), ibid.

  195. 195.

    Section 13C, ibid.

  196. 196.

    Electronic money.

  197. 197.

    CBK (2013) ‘E-Money Regulation’ (Central Bank of Kenya), https://www.centralbank.go.ke/images/docs/NPS/Regulations%20and%20Guidelines/Regulations%20-%20E-%20Money%20regulations%202013.pdf. 28 December 2018.

  198. 198.

    Clause 4, ibid.

  199. 199.

    Clause 3.1, ibid.

  200. 200.

    Clause 9, ibid.

  201. 201.

    Clause 3.2, ibid.

  202. 202.

    XE (2018) ‘XE Currency Converter’ (XE), https://www.xe.com/currencyconverter/convert/?Amount=1&From=GBP&To=KES. 28 December 2018.

  203. 203.

    Clause 5.2, ibid.

  204. 204.

    Clause 6, ibid.

  205. 205.

    Clause 7.1, ibid.

  206. 206.

    Clause 7.3, ibid.

  207. 207.

    Clause 7.4, ibid.

  208. 208.

    Clause 7.5, ibid.

  209. 209.

    Clause 7.6, ibid.

  210. 210.

    Clause 10, ibid.

  211. 211.

    Clause 11.1, ibid.

  212. 212.

    Clause 12, ibid.

  213. 213.

    Musuni (2015).

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    Sunduzwayo Madise

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Madise, S. (2019). Malaŵi’s Existing Regulatory Framework of Mobile Money. In: The Regulation of Mobile Money. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-13831-8_8

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