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Malawi is about to force businesses to accept digital payments

Malawi's policy makers, through the Reserve Bank of Malawi (RBM) and other stakeholders, are working on a law that will force companies in the country to accept at least one form of digital payment.

Malawi‘s policy makers, through the Reserve Bank of Malawi (RBM) and other stakeholders, are working on a law that will force companies in the country to accept at least one form of digital payment. Interestingly, this announcement comes at a time when mobile money accounts in the Southern Afrikan country have reached 5,1 million (as of August 2018 according to RBM) yet most transactions with businesses remain cash based.

Titled “The Deployment and Usage of Electronic Payments Channels Regulation 2018”, the proposed law will details the minimum mandatory requirements for businesses operating in Malawi, including digital payment channels. It is expected to be finalized and issued by December 2018.

“(a) A business shall ensure that it avails deployed electronic payment channels to customers for payment of goods and services at all times and that the business shall immediately report any faulty channels to the service provider. (b) The deployed electronic payment channel shall be placed at a conspicuous place where a customer effecting the payment can easily see it,” reads a portion of Section 5 of the proposed regulation.

The draft regulation (bill) is being  prepared by RBM, Malawi Revenue AuthorityBankers Association of MalawiMalawi’s Ministry of Industry, Trade and Tourism, and the Malawi’s Ministry of Justice.

Financial inclusion

On one hand this can be interpreted as Malawi’s authorities making strides towards financial inclusion as they acknowledge that not all citizens are likely to have traditional bank accounts, as illustrated by the continued growth of mobile money account in the country. While on the other hand, by making this a law, it imposes an added burden and cost on businesses operating in Malawi to ensure that they have at least one of the 5 digital payment channels, namely mobile money, mobile banking, point of sale devices, Internet banking and any other digital payment products as approved by RBM.

This is likely not a concern for established companies but it could be an issue if it applies to informal businesses too.

As part of the law, businesses will not be allowed to charge customers an extra fee for them having to use any digital payment channel.