Bank of Tanzania, TCRA Partner on Mobile Phone Cash Transfers Control in Tanzania
The strong growth of mobile payment services in the country has led to the signing of the Memorandum of Understanding (MoU) on the services' joint supervision by the Bank of Tanzania (BoT) and Tanzania Communication Regulatory Authority (TCRA).
BoT has, in its maiden Financial Stability Report, attributed the sharp increase in the number of subscribers to the mobile payments mainly to limited access to formal banking services, especially in rural areas. "... in this regard, the mobile payment provides an avenue for linking bank account holders to the unbanked population," the central bank says in its 33- page report, which the bank's governor, Professor Benno Ndulu, launched in Dar es Salaam over the weekend.
According to provisional data, as of June 30, 2010, the number of mobile phone subscribers stood at 18.5 million, with 9.2 million of them registered for mobile payment services. Mobile payment schemes involve not only funds transfers but also payment for retail goods and services.
Mobile payment services are specifically used to top-up mobile phone credits, airtime transfers between mobile phones and corporate bill payments - water and electricity, for instance.
Four mobile network operators - Vodacom, Airtel, Tigo and Zantel - are currently offering the mobile payment services. The service provision however requires that the phone companies partner with commercial banks.
"The existing arrangement creates gaps in the regulatory framework because two regulators - BoT and TCRA - each with a limited scope of coverage, oversee the mobile payment services," the report says, noting that the signed MoU provides a mechanism for regulatory and supervisory coordination between the two regulators.
While the central bank regulates the financial transactions, the TCRA focuses on the communication infrastructure. Industry analysts say that the significant growth in the usage of mobile phones offers great opportunity to extend financial and other services to millions of those in the unbanked community.