Regulatory Alerts2022-04-27 | CBE12.5Added · Updated
CBE Regulation Book 12.5 - Rules For Technology Service Providers For Payments And Facilitators Of Electronic Payment Processes
The Central Bank of Egypt establishes minimum rules and controls for banks interacting with Payment Technical Aggregators and Payment Facilitators, defining their roles, required infrastructure, and operational obligations. The regulation mandates that bank boards of directors adopt strategies for engaging these providers, conduct risk analyses, and perform periodic inspections. It further specifies that subsidiary companies contracting with these entities must maintain specific bank accounts, physical headquarters in Egypt, and valid contact information to facilitate electronic payment collection.
Chapter 5: Rules Specific to Payment Technology Service Providers and Facilitators of Electronic Payment Processes
-1 Introduction
These rules were prepared due to the rapid development in the collection and payment of invoices and services, and the need for Payment Technical Aggregators and Facilitators of Electronic Payment Processes. The ability of these companies to provide financial and technological services to many merchants and companies, and to provide appropriate contractual methods, helps in providing and spreading electronic collection services through various distribution channels. This has a significant impact on increasing the acceptance of electronic payment methods among this category of companies and merchants, thereby ensuring tangible steps in the field of electronic payments securely for all parties participating in the electronic collection process.
1-1 Scope of Rules
o These rules and controls constitute the minimum required for banks when dealing with Payment Technical Aggregators and Facilitators of Electronic Payment Processes. All banks must not rely solely on this and must ensure that all necessary measures are taken regarding the management of risks associated with providing this type of banking service.
o These rules regulate the use of Payment Technical Aggregators and Facilitators of Electronic Payment Processes only, without prejudice to the supervisory controls for electronic banking operations previously issued by the Central Bank of Egypt, as well as the instructions and rules for implementing banking operations and anti-money laundering and counter-terrorism financing controls issued by the Central Bank of Egypt, and the due diligence procedures issued by the Anti-Money Laundering and Counter-Terrorism Financing Unit.
2-1 Definitions
| Term | Definition |
|---|---|
| Payment Technical Aggregator | A financial company that provides technological services to its subsidiary companies on behalf of the bank through the electronic distribution channels specific to the Payment Technical Aggregator, including providing electronic collection services for invoice/service values. This includes the following roles, for example, but not limited to:<br>- Establishing a technological platform for collecting invoice/service values for subsidiary companies with their providers of electronic collection services.<br>- Providing the bank with data on the subsidiary companies to be onboarded.<br>- Providing the contractual method with the subsidiary company according to the bank's terms and conditions.<br>- Providing the necessary technical support to the subsidiary company on behalf of the bank.<br>- Providing the necessary awareness to the subsidiary company regarding the financial services it will provide on behalf of the bank.<br>- Providing all necessary reports for the subsidiary company and related to all technological operations executed through it. |
| Payment Facilitator | A financial company that provides financial and technological services through the electronic distribution channels specific to the contracted subsidiary companies on behalf of the bank for electronic collection. This includes, for example, but not limited to:<br>- Establishing a technological platform for subsidiary companies with their providers of electronic collection services.<br>- Establishing an intermediary system providing additional services (Value Added Services) for subsidiary companies with their providers of electronic collection services.<br>- Providing the bank with data on the subsidiary companies to be collected from.<br>- Contracting with companies on behalf of the bank to provide electronic collection services.<br>- Automatically receiving financial settlements from the contracted bank on behalf of the onboarded companies.<br>- Performing financial settlements for the onboarded companies on behalf of the bank.<br>- Providing the necessary technical support to the onboarded companies on behalf of the bank.<br>- Providing the necessary awareness to the onboarded companies regarding the financial services it will provide on behalf of the bank.<br>- Providing all necessary reports for the onboarded companies and related to all financial operations executed through it. |
| Subsidiary Company of the Payment Technical Aggregator | A subsidiary company that has a valid legal entity and contracts with the Payment Technical Aggregator and the bank (according to the mentioned contractual method) to provide invoice/service payment services to customers through the electronic distribution channels. The subsidiary company must have:<br>- A bank account specific to the subsidiary company, from which collections are made and paid invoice/service values are transferred.<br>- A physical headquarters within the Arab Republic of Egypt.<br>- Clear contact information (phone number within the Arab Republic of Egypt / email). |
| Subsidiary Company of the Payment Facilitator | A company that has a valid legal entity and contracts with the Payment Facilitator of Electronic Payment Processes to provide electronic payment services to its customers through its own channels, for example, but not limited to: the company's website, company mobile applications, specific branches of the company, etc. |
| Electronic Channels | The electronic channels that allow electronic collection for customers through them, including electronic distribution channels, for example, but not limited to:<br>- Electronic Point of Sale (POS).<br>- Electronic collection via Internet Commerce (E-Commerce).<br>- Mobile Wallets (Mobile Wallet). |
-2 Responsibilities and Obligations of the Board of Directors and Senior Management
1-2 The Board of Directors is responsible for approving the business strategy prepared by the bank's senior management, as well as making a clear strategic decision regarding the bank's desire to deal with Payment Technical Aggregators or Facilitators of Electronic Payment Processes or not. Specifically, the Board of Directors must ensure the following:
o The plans to rely on Payment Technical Aggregators and Facilitators of Electronic Payment Processes align with the bank's strategic objectives.
o Analysis of the risks specific to these services.
o Preparing appropriate procedures to monitor and mitigate risks regarding identified risks.
o Continuous review of the evaluation of results of relying on Payment Technical Aggregators and Facilitators of Electronic Payment Processes according to the specified plans and objectives.
o Conducting periodic inspections of Payment Technical Aggregators and Facilitators of Electronic Payment Processes.
o The bank must conduct the necessary due diligence research regarding...
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