NBE issues new directive to license, authorize payment instrument issuers
Addis Ababa, April 2, 2020 (FBC) –The National Bank of Ethiopia (NBE) has issued a new directive that is important to promote the safety and efficiency of the payment system.
The directive “Licensing and Authorization of Payment Instrument Issuers Directive” entered into force yesterday, April 1, 2020, according to a press release issued by the bank.
Composed of six parts and twenty articles, the directive gives prominence to innovative payment instruments, therefore, increasing the use of financial services, it said.
According to the directive, a person other than the licensed financial institutions shall submit a complete application to NBE to get a license to issue a payment instrument.
As part of the application process, the National Bank may request for a preliminary meeting and demonstration of the intended payment instrument to be issued, its related services, products as well as operation.
Based on requests made and written approval of the bank, a payment instrument issuer may be allowed to provide cash-in and cash-out, local money transfers including domestic remittances, load to card or bank account, transfer to card or bank account, domestic payments including purchase from physical merchants, bill payments, over-the-counter transactions, and inward international remittances services.
Moreover, based on the bank’s written approval, a licensed payment instrument issuer under full responsibility of and written outsourcing agreement with a regulated financial institutions and pension funds may be allowed to provide micro-saving products, micro-credit products, micro-insurance products or pension products.
In a bid to mitigate associate risks and maintain reliability of payment instruments, the bank shall oversee payment issuers, their systems, agents and outsourcing counter parties.