Vodacom Mozambique sees mobile wallet as an alternative to problems on the interbank network

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Vodacom Mozambique sees mobile wallet as an alternative to problems on the interbank network

9:13 CAT | 30 Apr 2024

FILE - For illustration purposes only. [File photo: O País]

The chairmn of Vodacom Mozambique, the country’s largest national telecommunications operator, said this Tuesday that the mobile wallet that the company operates has transaction control mechanisms, with the system also emerging as an alternative to ongoing problems on the interbank network.

“These platforms introduced access to the financial sector never before seen in Mozambique. The three mobile wallet operators have more customers than the entire banking sector,” said Lucas Chachine, chairman of Vodacom, which owns the M-Pesa mobile wallet.

“In a very short time, today, anywhere we can make transactions with our cell phone, with our mobile wallet. And today, with the problems we unfortunately have with the [interbank] network, people use it more and more, even at urban level,” Chachine told journalists in Maputo, alluding to the difficulties faced by bank customers as a result of the migration of the interbank network, with systematic problems registered with payments or withdrawals using bank cards.

He added that, in Vodacom’s case, the mobile wallet has rules concerning, for example, transactions amounts, to prevent “problems in operations”, particularly illicit ones.

“We are contributing to the economic development of Mozambique, through our financial services, the impact of which has been boosting financial inclusion and integrating more Mozambicans into the formal financial system, especially the most disadvantaged social classes,” Chachine claimed.

To prevent and combat money laundering and terrorism, Electronic Money Institutions (EMIs), which work through mobile telecommunications operators, will have limits on transactions,.

These are detailed in a notice, dated April 1st, from the Bank of Mozambique, which comes into force in 30 days, establishing “transactional limits applicable to electronic money institutions”.

The measure is justified by the “need to guide the actions of IMEs and reinforce measures to prevent and combat money laundering, terrorist financing and the proliferation of weapons of mass destruction, taking into account good international practices”.

The notice obliges EMIs to classify their customers, “based on risk assessment”, into three levels.

Level I refers to customers subject to simplified identification, verification and diligence measures, depending on their low risk, which now have as limits a maximum account balance of 200,000 meticais (€2,915), the same value as the daily transfer and withdrawal limit, up to an annual maximum of 500,000 meticais (€7,290) in transfers, and 40,000 meticais (€583) per transfer and transaction.

Level II is assigned to customers “for whom standard or reinforced identification, verification and due diligence measures are adopted”, with a maximum account balance of 500,000 meticais (€7,290), the same value as the daily transfer and withdrawal limit, and of 75,000 meticais (€1,094) per transfer and transaction.

Level III corresponds to micro and small companies, with limits now being a maximum account balance of three million meticais (€43,750), the same value as the daily transfer and withdrawal limit, without other restrictions.

Mozambican authorities see the EMI sector as posing a “high” level threat of terrorist financing, according to the National Assessment of Terrorist Financing Risks Report, released by Lusa in March.

The document recognizes an “excessive movement of funds to areas of active terrorist threat using EMIs”, concentrated in rural areas and with limited access to the national banking network, therefore with “preference for the use of electronic money institutions”.

The report points out that the value of EMI assets in September, 2023, stood at 16,940 million meticais (€243.2 million), with its accumulated share capital standing at 2,004 million meticais (€28.7 million).

Source: Lusa