Mobile money on the rise in Uemoa
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France
I'm a partner in our Finance & Financial Regulation, Tech & Comms and Media Groups, and lead Bird & Bird's French Fintech sub-group. I assist clients with disruptive digital technology adoption, providing legal advice and acting in regulatory litigation. I'm based out of Paris and often work in our Belgium office.
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Financial inclusion in the West African Monetary and Economic Union (in French "UEMOA") is a major concern for its member states. Although the proportion of households with a bank account remains low in the region (15,7 % in 2016), it reaches 65 % when mobile financial services are added up.
Currently, those services remain focused on mobile money; a virtual wallet one can use from its phone. This field could stream up to US$1.5 billion before 2019, and enjoy a 250 million consumers market in sub-Saharan Africa.
In order to facilitate the development of this sector, the BCEAO has passed a special set of rules, tailored to this activity.
- A specific regulation for mobile money issuers
At early stages, mobile money was offered by telecommunication operators in partnership with banks, acting as mobile money issuers. Since 2006, a specific regulation enables a non-financial entity to issue mobile money in the UEMOA if allowed to do so by the BCEAO.
By means of an instruction in 2015, the BCEAO has decided to strengthen and clarify this regulation, contributing to the rise of these new actors. For instance, telecommunication operators (such as Orange) have created dedicated branches for which the electronic money issuer license (EMI) has been obtained.
It should be highlighted that the EMIs do not necessarily act as banks competitors, as the need to collaborate with the latter remains if they wish to offer other financial services, such as loans or savings-accounts. Moreover, money transfers outside the Franc zone cannot be proceeded with by the EMIs.
- EMIs are subject to restrictions in terms of international money transfers
The Regulation n° 09/2010 provides that capital movements between a member-state and a non-member-state cannot be proceeded with by EMIs, but only by entities allowed to operate a foreign currency conversion, such as banks.
In March 2017, the BCEAO has restated its position in a ruling mentioning that the regulation, which is to receive a strict interpretation, applies for money transfers between the member states of UEMOA and France (or another foreign State).
