{"id":1861,"date":"2020-09-09T08:57:37","date_gmt":"2020-09-09T06:57:37","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=432284"},"modified":"2020-09-09T08:57:37","modified_gmt":"2020-09-09T06:57:37","slug":"regulations-should-allow-mobile-networks-to-become-your-next-bank-commission","status":"publish","type":"post","link":"https:\/\/interwebdev.co.za\/index.php\/2020\/09\/09\/regulations-should-allow-mobile-networks-to-become-your-next-bank-commission\/","title":{"rendered":"Regulations should allow mobile networks to become your next bank: commission"},"content":{"rendered":"
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The Competition Commission has published a paper<\/a><\/strong> on competition in South Africa\u2019s \u2018digital economy\u2019 and the measures that can be introduced to promote inclusion.<\/p>\n

The commission said that it favours a regulatory approach that promotes the inclusion of fintech and enables access to the national payments system.<\/p>\n

Rather than protecting existing incumbents, regulation should protect the payments system for the benefit of consumers, it said.<\/p>\n

\u201cIn this regard, the financial regulators should explore regulation that can allow non-banks such as mobile network operators to enter the national payments system; settlement and clearance system.<\/p>\n

\u201cIn particular, financial system regulators should review the ecosystem of regulation that enables entry and participation in the system, including licencing and trading condition, data ownership, portability and system operability.\u201d<\/p>\n

Fintech regulations needed <\/strong><\/p>\n

Currently, there are greater levels of regulation targeting those institutions regarded as posing a high systemic risk, that is the \u201ctoo big to fail\u201d and \u201ctoo large to ignore\u201d group of companies, and less on fintech and big tech, the commission said.<\/p>\n

However, the commission said that fintech and big tech also tend to operate outside of traditional sector regulation: financial stability, anti-money laundering, and consumer protection.<\/p>\n

This means that regulatory design for the inevitable competition arising from the entry of tech players must be \u2018appropriate\u2019, it said.<\/p>\n

\u201cTo prevent systemic risks, regulation should put the relevant \u2018walls\u2019 to manage potential harm if commercial and banking functions are blurred.<\/p>\n

\u201cIt should be noted that regulating part of the market whilst ignoring a significant portion which poses a systemic risk, namely fintech and big tech, is the real systemic risk. Capturing these functions through regulation would enable better oversight and prevent shadow banking.\u201d<\/p>\n

Cashless <\/strong><\/p>\n

As a digitalised world can be exclusionary for many citizens, particularly the poor, deliberate consideration of inclusion by policymakers is pertinent, the commission said.<\/p>\n

Promoting greater inclusion of citizens in financial services is ultimately both a function of innovation and regulation, it said.<\/p>\n

\u201cBanks, mobile network operators and the private financial sector role-players should begin the relevant innovations and product offerings that will deliver a cashless future for South African consumers.<\/p>\n

\u201cThe challenges that South Africa has faced regarding the payment of social grants over the years have been more starkly pronounced during the current Covid-19 pandemic, as millions of citizens must collect relief grants in-person from physical pay-points.\u201d<\/p>\n

The commission said that solutions by firms that enable the participation of marginalised groups should, in principle, be supported through regulation.<\/p>\n

However, South Africa\u2019s regulatory framework has not always achieved this balance, as has been the case concerning mobile money operators and their attempts to access the payment system, it said.<\/p>\n

\u201cMobile money operators in South Africa constitute as non-banks. They, therefore, cannot settle and clear payments and must therefore be sponsored by a registered bank to operate.<\/p>\n

\u201cThis dependency increases costs for the operator and constrains its ability to be an effective competitor with registered banks.\u201d<\/p>\n

Speaking to stakeholders during its banking inquiry, the commission said that there were conflicts of interest between banks and mobile money operators which made such joint ventures difficult.<\/p>\n

\u201cThe current review of the payment system regulation should consider how best barriers to entry can be lowered, whilst continuing to guard against systemic risks,\u201d it said.<\/p>\n

\n

Read: Capitec revises earnings outlook lower<\/a><\/strong><\/p>\n

Source: BusinessTech<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Competition Commission has published a paper on competition in South Africa\u2019s \u2018digital economy\u2019 and the measures that can be introduced to promote inclusion. The commission said that it favours a regulatory approach that promotes the inclusion of fintech and enables access to the national payments system. Rather than protecting existing incumbents, regulation should protect […]<\/p>\n","protected":false},"author":2,"featured_media":1862,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[77],"tags":[52,53,54,55,56,8,57,59,72,60,61,62,63,64,65,66],"class_list":["post-1861","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-co-za","tag-com","tag-affordable","tag-cheap","tag-cpanel","tag-development","tag-domain","tag-hosting","tag-interweb","tag-joomla","tag-registration","tag-reseller","tag-shared","tag-south-africa","tag-website","tag-wordpress"],"acf":[],"_links":{"self":[{"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/posts\/1861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/comments?post=1861"}],"version-history":[{"count":0,"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/posts\/1861\/revisions"}],"wp:attachment":[{"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/media?parent=1861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/categories?post=1861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/interwebdev.co.za\/index.php\/wp-json\/wp\/v2\/tags?post=1861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}