Page 80 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Regulation should create clear expectations that DFS providers will ensure that agents do not coerce clients into
using products that do not meet their needs and would be harmful to them. Agents should not use aggressive
sales and marketing techniques or intimidate clients.
Agents should not charge clients additional fees than those agreed to by the DFS provider, and the DFS providers
should be required to monitor agents for compliance. Many countries prohibit agents from charging additional
fees in cash to consumers for DFS services. Bangladesh, Brazil, Colombia, Egypt, Ghana, India, Kenya, Pakistan,
Peru, Rwanda, Sierra Leone, Tanzania, and Uganda have regulations on DFS consumer fees. For example,
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Bangladesh Bank’s Guidelines on Agent Banking for the Banks states: “Customers should not be charged
directly by the agents for providing services to them”.
DFS providers should put in place appropriate management systems to monitor and verify the conduct of
agents, and put in place corrective measures if and as needed. GSMA and the Smart Campaign state that
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providers shall develop policies and processes for ongoing management and oversight of agents and entities
providing outsourced services.
Providers should monitor and assess their agents’ needs and put in place a toll-free complaints line and other
agent redress mechanisms. Providers should also put in place a framework to ensure adequate liquidity
and float management, so that transactions can be done in real time and without delays. Insufficient agent
liquidity can cause serious harm to consumers. As highlighted by CGAP , it can either prevent clients’ access
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to their funds, or result in extra costs or risks of fraud for consumers (due to split transactions, waiting time,
sharing of PINs and other personal information, etc.). According to the Helix Institute of Digital Finance Agent
Network Accelerator (ANA) surveys , lack of liquidity in Tanzania results in denial of an average 14 per cent of
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daily transactions in Tanzania and ten per cent in Uganda. We do not find any regulations that set minimum
liquidity requirements at the agent level. Bank of Lesotho , Central Bank of Malaysia , and Superintendencia
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de Banca, Seguros, Y AFP of Peru , place loose prescriptions on agent liquidity with language indicating that
agents should have “sufficient” liquidity, while others mention that providers should be aware of liquidity
concerns. While no liquidity requirements are specified in regulation, we do find evidence that Ecuador sets
minimum liquidity requirements for “macro” agents.
Agents are the stewards of client funds and data, and should not conduct transactions if there is a risk of loss
of client funds due to service downtime, and should have appropriate policies in place to counter fraud. To
prevent fraud and loss of funds, DFS providers thus should ideally prohibit agents or employees from conducting
transactions in situations where conducting in real time is not possible. Bangladesh, Colombia, Ghana, India,
Kenya, Nigeria, Rwanda, Sierra Leone, Tanzania, and Uganda have such regulations. For example, the Bank of
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Ghana mandates that, “Agents are not permitted to… [transact] when there is communication failure or when
the issuance of physical or electronic receipt is not possible”. The Central Bank of Kenya takes this prescription
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a step further by also requiring the disclosure of this prohibition: “An agent shall disclose to the institution’s
customers in a conspicuous place on the agent’s premises… a written notice to the effect that if the electronic
system is down, no transaction shall be carried out”. AFI also recommends that real-time transaction services
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are in place and used. (Refer to recommendations on Fraud and Revocability.)

35 GSMA, Code of Conduct for Mobile Money Providers, (2015) http:// www. gsma. com/ mobilefordevelopment/ programmes/ mobile-
money/ policy- and- regulation/ code- of- conduct
36 Helix Institute of Digital Finance, Digital Finance Data & Insights http:// www. helix- institute. com/ data- and- insights
37 Central Bank of Lesotho, National Payment System Division Guidelines on Mobile Money https:// view. officeapps. live. com/ op/
view. aspx? src= http:// www. centralbank. org. ls/ NPS/_ vti_ cnf/ Mobile_ Money_ Guideline_ 2013. DOC. doc
38 General Payment Guidelines http:// www. bnm. gov. my/ guidelines/ 00_ general/ payment/ guidelines/ gl_ 016_ 3. pdf

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