BEAC 2023 Annual Report on Payment Services in the CEMAC Region

BANK OF CENTRAL AFRICAN STATES
DIRECTORATE OF PAYMENT SYSTEMS AND INSTRUMENTS ANNUAL ACTIVITY REPORT www.beac.int BANK OF CENTRAL AFRICAN STATES DIRECTORATE OF PAYMENT SYSTEMS AND INSTRUMENTS ANNUAL ACTIVITY REPORT www.beac.int

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023
EXECUTIVE SUMMARY..................................................................................................................5
INTRODUCTION 5 ....................................................................................................................7

1. KEY EVENTS OF 2023.........................................................................9
   1.1. Co-regulation of payment services in the CEMAC..................................................9
   1.2. Adoption of new standards............................................................................................9
   1.3. Applications for Approval as Payment Institutions and Authorization for Payment Services.....................9
   1.4. Opening of Accounts for Payment and Microfinance Institutions.................9
   1.5. Consolidation of Full Monetary Interoperability in the CEMAC with GIMACPAY......................................................................................9
2. EVOLUTION OF THE REGULATORY FRAMEWORK ...................................................................10
3. ACTIVITIES ON PAYMENT INSTRUMENTS......................................................10
   3.1. Cash Withdrawals at Counters...................................................................................10
   3.2. Commercial Paper ......................................................................................................11
   3.3. Cheques.............................................................................................................................11
   3.3.a. Cheque Payments..................................................................................................12
   3.3.b. Interbank Cheque Transactions..........................................................................13
   3.4. Funds Transfer Services (Payment Orders)......................................13
   3.5. Card Transactions...................................................................................................14
   3.5.a. Bank Card Withdrawals.............................................................................................14
   3.5.b. Bank Card Payments in the CEMAC.....................................................................15
   3.6. Standard and Instant Transfers...........................................................................15
   3.6.a. Interbank Transfers in the CEMAC (SYSTAC)...................................................15
   3.6.b. International Transfers (Outside CEMAC) .....................................................................15
   3.7. Instant Electronic Money Transfers........................................................................................16
   3.7.a. Activity Evolution............................................................................................................17
   3.7.b. Evolution of Accounts and Subscribers to Electronic Money Products.............20
   3.7.c. Typology of Electronic Money Transactions........................................................................................20
   3.7.d. Electronic Money Payments..................................................................................21
   3.7.e. Receipt of International Funds (Outside CEMAC)....................................................................................... 21
   3.7.f. Electronic Money Interoperability.....................................................................22
4. CONCLUSION AND OUTLOOK.................................................................................23
5. RECOMMENDATIONS..................................................................................................23
   APPENDICES.................................................................................................................................25
   Table of Contents

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023 BEAC ADOPTS A NEW LOGO TO STRENGTHEN ITS VISUAL IDENTITY The new logo is the result of in-depth creative research and a rigorous iterative process. It aligns with a dynamic of continuity and modernization, building upon the existing visual identity to achieve a contemporary design while preserving the historical elements and symbols of the Institution.

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023 In 2023, payment service providers in the CEMAC maintained over 45 million accounts for the benefit of the community. 3.7 billion transactions were executed for an amount exceeding 171,943 billion CFA Francs. This represents an increase of 45.99% in volume and 23.91% in value. This strong growth is partly explained by the commercial actions of payment service providers but mainly by the economic conditions that led to an increase in salaries, social benefits, and other advantages benefiting the numerous employees in the CEMAC. The digitalization of certain public services also contributed to this evolution by connecting public administrations to the Central Bank's payment systems and, for some, to GIMAC, thus prioritizing the use of electronic payment methods. In terms of volume, the most used payment instrument is instant electronic money transfers with over 94.8% of transactions (3.5 billion operations), followed by bank cards (3.22% with 90.21 million operations) and standard transfers (1.45% with 54.05 million transactions). In terms of value, standard transfers take first place with 34.02% of transactions, amounting to 58,487 billion CFA Francs, followed by bank counter withdrawals (41,136 billion CFA Francs, or 27.5%) and electronic money (16.81% of transactions, or 28,911 billion CFA Francs). Transfers (as a whole) represent 50.83% of the value and 96.25% by volume of all transactions in the zone. Executive Summary Counter withdrawals (1.10%) Standard transfers (1.45%) Commercial paper (0.001%) Cheques (0.15%) Funds transfer (0.05%) Bank card (3.22%) Electronic money/instant transfers (94.8%)
Figure 1: Distribution of payments by volume in the CEMAC
Source: DSMP, BEAC

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023 Counter withdrawals (27.50%) Transfers (34.02%) Commercial paper (0.69%) Cheques (13.01%) Funds transfer (1%) Bank card (6.96%) Electronic money (16.81%) Cameroon (63.35%) Central African Republic (0.92%) Congo (24.36%) Gabon (10.52%) Equatorial Guinea (0.11%) Chad (0.73%) Cameroon (63.35%) Central African Republic (0.92%) Congo (24.36%) Gabon (10.52%) Equatorial Guinea (0.11%) Chad (0.73%) Cameroon (58.77%) Central African Republic (0.07%) Congo (15.50%) Gabon (18.93%) Cameroon (58.77%) Central African Republic (0.07%) Congo (15.50%) Gabon (18.93%) Cameroon is the country where the majority of transactions are carried out both in volume (62.83%, i.e., 2.26 billion operations) and in value (58.77%, i.e., 100,098 billion CFA Francs). Congo ranks second in volume (24.83%, i.e., 896 million transactions), while Gabon ranks second in terms of value (18.93%, i.e., 32,239 billion CFA Francs).
Figure 2: Distribution of payments by value in the CEMAC
Figure 3: Distribution of payments by volume and by CEMAC country
Figure 4: Distribution of payments by CEMAC country
Source: DSMP, BEAC
Source: DSMP, BEAC
Source: DSMP, BEAC

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023 The year 2023 marked the consolidation of recovery gains following the COVID-19 health crisis, which had negatively impacted banking and financial activities in previous years. Financial activity in general, and that of Financial Market Infrastructures (FMIs) in particular, experienced a resurgence through the use of payment methods made available by payment service providers. As of December 31, 2023, the CEMAC banking system comprised fifty-three (53) active commercial banks operating 663 branches and managing 4,161,309 bank accounts. The number of financial institutions stood at nine (09), managing 87,333 accounts, including 07 in Cameroon (19 branches for 84,099 accounts) and 02 in Gabon (5 branches for 3,234 accounts). The strict banking inclusion rate defined in the Regional Financial Inclusion Strategy stands at 11.68%, a decline from 13% in 2021. This is due to the closure of numerous accounts following the reorganization of many banks. The CEMAC microfinance sector counted 531 approved and active microfinance institutions (MFIs) in 2023. These MFIs managed 3,407,561 accounts, distributed as follows:
The broad financial inclusion rate defined in the Regional Financial Inclusion Strategy stands at 22.67%, down from 23% in 2021.
Regarding approved payment institutions (PIs), the CEMAC counted seven (07) in 2023. However, it should be noted that 17 institutions offer their clients payment accounts for financial services via mobile telephony (Mobile Money). In total, this service enabled the maintenance of 40,033,410 payment accounts:
INTRODUCTION

COUNTRY	Number of adults aged 15+	Number of banks	Number of branches	Number of bank accounts	Number of Financial Institutions	Number of FI accounts	Strict banking inclusion rate
Cameroon	15,379,630	17	394	2,678,929	7	84,099	15.35%
Central African Republic	2,497,788	4	11	113,429	-	-	3.86%
Congo	3,240,761	10	71	512,363	-	-	13.44%
Gabon	1,396,335	7	76	407,884	2	3,234	25.06%
Equatorial Guinea	881,534	5	47	192,828	-	-	18.59%
Chad	7,624,681	10	64	255,876	-	-	2.85%
TOTAL CEMAC	31,020,729	53	663	4,161,309	9	87,333	11.68%
Table 1: Bank Accounts in the CEMAC
COUNTRY	Number of adults aged 15+ in 2021	Number of MFIs	Number of MFI accounts	Broad financial inclusion rate
---	---	---	---	---
Cameroon	15,379,630	394	1,987,829	28.28%
Central African Republic	2,497,788	12	95,926	7.70%
Congo	3,240,761	46	866,477	40.18%
Gabon	1,396,335	18	234,819	41.88%
Equatorial Guinea	881,534	2	1,255	18.74%
Chad	7,624,681	59	221,255	5.75%
TOTAL CEMAC	31,020,729	531	3,407,561	22.67%
Table 2: Microfinance Institution Accounts in the CEMAC
Source: DSMP, BEAC
Sources: BEAC, COBAC, World Bank Group.
Sources: BEAC, World Bank Group.

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023

COUNTRY	Number of adults aged 15+ in 2021	Number of Payment Institutions	Number of mobile payment services	Number of Mobile Money accounts	Financialization rate
Cameroon	15,379,630	2	4	24,865,110	109.12%
Central African Republic	2,497,788	2	5	76,331	19.24%
Congo	3,240,761	2	3	8,742,685	175.06%
Gabon	1,396,335	2	4	3,661,370	172.98%
Equatorial Guinea	881,534	2	4	9,727	21.56%
Chad	7,624,681	1	2	2,138,187	19.78%
TOTAL CEMAC	31,020,729	7	17	40,033,410	87.20%
Table 3: Payment Accounts in the CEMAC
Sources: BEAC, World Bank Group.
The CEMAC's financialization rate stands at 87.20%, an increase from 84% in 2021. This progress is attributable to the dynamism of payment institutions.
In total, the CEMAC financial ecosystem recorded 47,602,280 accounts (across all sectors) at the end of 2023. In 2022, CEMAC Payment Service Providers (PSPs) held 45,135,744; representing a 5.66% increase between the two years. This figure should be adjusted for multi-banking (many bank and MFI account holders also hold electronic money accounts). The payment instruments used include cheques, bills of exchange, promissory notes, direct debits, payment cards, standard transfers, and electronic money (mobile money). Mobile money is understood here as the use of mobile telephony to conduct financial transactions via electronic money or instant transfers. The electronic wallet is an instrument featuring computer memory (phone, computer, token, etc.) that allows storing monetary value units and initiating transfer/payment orders debiting one account for the benefit of another. This payment service is considered a true catalyst for financial inclusion, the digitalization of payments, and consequently, the development of African economies. It is the predominant payment method, responsible for opening 98% of payment accounts. The provision of payment services did not experience any major incidents that could undermine public confidence in the financial sector in the CEMAC. As elsewhere, digital payment services face cybersecurity challenges. They are stressed by scams, fraud attempts, and phishing that can cast doubt on the reliability of financial products and services. Thanks to the standardization and security work on payment instruments by the Central Bank and all payment service actors, payment fraud remains controlled. Declared fraudulent operations represent only 0.07% of total transactions. 82% of this fraud concerns online transactions (on the Internet). The reassessment of internal control systems by PSP teams, sometimes on the recommendation of the COBAC General Secretariat, addresses system vulnerabilities. The major issue remains the fight against cyberattacks, crime, or scams related to the use of these value-added services, requiring operators to lead awareness and education campaigns for the general public while taking necessary account security measures (passwords, fingerprint/facial recognition, etc.). In the same vein, the Central Bank, through Circular Letter No. 004/DGE/DSMP/2023 of November 24, 2023, established procedures for the restitution of erroneous fund transfers by payment service providers. This document is the report on the evolution of the applicable regulatory framework. It presents, in turn, the key events in the provision of payment services while highlighting figures related to the use of different payment instruments within the CEMAC in 2023. It provides a brief analysis of trends and the structuring of the payment ecosystem. Finally, it presents future outlooks, major ongoing projects that will impact activity in the coming months and years.

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023

1. KEY EVENTS OF 2023
   1.1. Co-regulation of payment services in the CEMAC
   The BEAC and the Electronic Communications Network Regulatory Authorities of each CEMAC country signed memoranda of understanding on the co-regulation of digital financial services and financial inclusion. This agreement enabled the establishment of a Regional Coordination Committee on the co-regulation of Digital Financial Services, whose work began during 2023.
   1.2. Adoption of new standards.
   The Ministerial Committee of the Central African Monetary Union (UMAC), meeting in ordinary session on October 4, 2023, adopted the Regulation on the homologation of standards for QR Codes, bills of exchange, and direct debits in the CEMAC, upon proposal from the Regional Financial Standardization Committee (CORENOFI).
   1.3. Applications for Approval as Payment Institutions and Authorization for Payment Services.
   In application of Regulation No. 04/18/CEMAC/UMAC/COBAC of December 21, 2018, on payment services in the CEMAC, subsidiaries of mobile telephony operators dedicated to electronic money financial services submitted applications for approval as payment institutions to the national monetary authorities. In 2023, two (02) approvals as payment institutions were issued by national monetary authorities: Clikpay Gabon S.A. and Mobile Money Corporation Ltd in Cameroon, bringing the number of approved payment institutions in the CEMAC to seven (07). It should be noted that the BANGE bank obtained authorization to provide a mobile telephony payment service through a technical partnership with MUNI S.A. telephony operator in Equatorial Guinea.
   1.4. Opening of Accounts for Payment and Microfinance Institutions
   The Board of Directors of the Bank of Central African States (BEAC), meeting in ordinary session on March 14, 2023, authorized the BEAC Government to open, on a case-by-case basis and under conditions defined by the BEAC, current accounts and settlement accounts for approved payment institutions and microfinance institutions authorized to provide payment services.
   1.5. Consolidation of Full Monetary Interoperability in the CEMAC with GIMACPAY
   The year 2023 marked the consolidation of full monetary interoperability with the effective production launch of all electronic money operators in the GIMACPAY ecosystem. As of December 31, 2023, the GIMACPAY network counted 95 participants: 53 banking institutions, 13 microfinance institutions, 11 mobile money operators, 01 Public Treasury (that of Cameroon), 01 Postal Financial Service, and 16 aggregators connected to the GIMACPAY platform acting as intermediaries between GIMAC and their multi-banked clients. In total, over 12.03 million transactions were processed on the GIMACPAY platform for a cumulative amount exceeding 601.74 billion CFA Francs. This performance was made possible by a main PCI-DSS certified platform in Yaoundé and a backup platform in Douala. GIMAC claims 35% of the 2,745,540 payment cards in circulation in the CEMAC, i.e., 964,150 cards. This still marks a shortfall in the application of the related regulatory framework, notably the BEAC Governor's Instruction No. 001/GR/2018 on defining the scope of interoperability and interbanking of monetary payment systems in the CEMAC. During 2023, by volume, 73% of GIMAC transactions related to mobile money, while those concerning delegated and interbank cards stood at 27%. By value, these proportions were 65% for mobile and 35% for cards.

REPORT ON PAYMENT SERVICES IN THE CEMAC - DSMP-2023 Regarding acceptance, the infrastructure installed in the CEMAC comprised 3,599 Electronic Payment Terminals (EPTs) and 2,015 Automated Teller Machines (ATMs).
2. EVOLUTION OF THE REGULATORY FRAMEWORK
The Ministerial Committee of the Central African Monetary Union (UMAC), meeting in ordinary session on October 4, 2023, adopted the Regulation on the homologation of standards for QR Codes, bills of exchange, and direct debits in the CEMAC. The Automated Processing Bill of Exchange standard in the CEMAC sets the format, presentation, wording, and use of forms on which automated reading-accepting bills of exchange, also known as "Automated Processing Bills of Exchange," must be established. The lack of standardization for direct debits prevented their automated processing by BEAC payment systems due to the various formats existing and used by credit institutions. In an interbanking context, this lack of standardization effectively maintains bilateral clearing and interbank fund movements that the Central Bank cannot categorize. The QR code, "Quick Response code," is a transaction acquisition method at points of sale, a two-dimensional barcode consisting of black square modules arranged in a white background square. These points define the information contained in the code. The implementation of a unified and interoperable payment QR code in the CEMAC reflects the Central Bank's clear intention to consolidate payment and settlement systems to ensure and guarantee the proper functioning of the financial ecosystem in the CEMAC given current challenges. The QR Code standard aims to define regional specifications for a unified and interoperable payment QR Code with all payment schemes present in the Economic and Monetary Community of Central African States (CEMAC), as well as related payment initiation methods. The adoption of these three standards will:

• Promote an inclusive payment ecosystem through the interbanking offered by the Central Bank's payment systems;
• Accelerate commercial exchanges through rapid processing of bills of exchange;
• Foster financial inclusion by providing payment card holders and especially electronic wallet users with broader, non-segmented access to all merchant acceptance networks;
• Encourage the development and integration into a formalized payment system of a wider range of merchants, especially those excluded from card-based electronic payments by offering them a fast, viable, and profitable digital alternative;
• Accelerate cashless payments and descashing by reducing cash payments;
• Promote an inclusive payment ecosystem;
• Enable the Central Bank to have better visibility of interbank exchanges.

3. ACTIVITIES ON PAYMENT INSTRUMENTS
   3.1. Cash Withdrawals at Counters
   Services allowing the deposit and withdrawal of cash from an account constitute one of the oldest types of payment services. Regarding cash withdrawals specifically, one can distinguish manual withdrawals (at bank counters) and withdrawals at Automated Teller Machines (ATMs). During the year 2023, in commercial banks and financial institutions