Regulation N° 04/18/CEMAC/UMAC/COBAC of 21 December 2018 on Payment Services in the Economic and Monetary Community of Central Africa

COMMUNITY OF ECONOMIC AND MONETARY STATES OF CENTRAL AFRICA CENTRAL AFRICAN MONETARY UNION MINISTERIAL COMMITTEE

REGULATION N° 04/18/CEMAC/UMAC/COBAC ON PAYMENT SERVICES IN THE ECONOMIC AND MONETARY COMMUNITY OF CENTRAL AFRICA

THE MINISTERIAL COMMITTEE

Having regard to the Revised Treaty of 30 January 2009 of the Economic and Monetary Community of Central Africa (CEMAC);

Having regard to the Convention governing the Central African Monetary Union (UMAC) in force:

Having regard to the Convention of 16 October 1990 establishing a Central African Banking Commission (COBAC), its Annex and its subsequent texts;

Having regard to the Convention of 17 January 1992 on the harmonization of banking regulation in the States of Central Africa, its Annex and its subsequent texts;

Having regard to Regulation No. 01/11/CEMAC/UMAC of 18 September 2011 on the exercise of the electronic money issuance activity;

Having regard to Regulation No. 01/16/CEMAC/UMAC/CM of 11 April 2016 on the prevention and repression of money laundering and terrorist financing and proliferation in Central Africa;

Having regard to Regulation No. 03/16/CEMAC/UMAC/CM of 21 December 2016 on payment systems, means and incidents;

Having regard to Regulation No. 01/17/CEMAC/UMAC/COBAC of 27 September 2017 on the conditions for exercising and controlling the microfinance activity in CEMAC;

Having regard to CEMAC/UMAC/CM Regulation of 21 December 2018 on the reform of exchange regulation in the CEMAC States;

Having regard to the OHADA Uniform Act on commercial company law and economic interest groups;

Having regard to the OHADA Uniform Act on cooperative company law;

Considering the need to ensure better development and regulation of payment services, in order to guarantee the security of funds and public confidence and to contribute to controlled financial inclusion in CEMAC;

Considering that the development of payment services in CEMAC requires an appropriate regulatory framework to ensure adequate monitoring and supervision by the competent control authorities in this matter;

Considering the need to comply with international standards in the supervision and monitoring of payment systems and means;

Having regard to the resolutions of the Banking Commission during its session of 20 September 2018 in Libreville regarding the draft CEMAC regulation on payment services;

After the conforming opinion of the Board of Directors of the BEAC delivered during its extraordinary session of 19 December 2018 in Yaoundé, in the Republic of Cameroon;

Meeting in ordinary session on 21 December 2018 in Yaoundé, in the Republic of Cameroon;

On the proposal of the Governor of the BEAC;

ADOPTS UNANIMOUSLY THE REGULATION WHOSE CONTENT FOLLOWS:

TITLE 1:

GENERAL PROVISIONS

Article 1- This regulation sets the conditions for exercising and controlling payment services in CEMAC.

It applies to payment service providers operating in CEMAC, their technical partners, and their distributors.

This regulation also applies to the statutory auditors of payment service providers.

The following are excluded from the scope of this regulation:

• payment transactions carried out in cash directly from the payer to the beneficiary, without the intervention of an intermediary;
• payment transactions carried out by the Central Bank, the Public Treasuries, and the financial services of the Post.

Article 2- For the purposes of this regulation, the following terms are defined as:

1. National Monetary Authority or Monetary Authority: the Minister in charge of currency and credit of the State of establishment;

2. Central Bank or BEAC: the Bank of Central African States;

3. Beneficiary: natural or legal person receiving the funds subject to a payment transaction;

4. Client: natural or legal person who, by virtue of a contract concluded with a payment service provider, uses a payment service;

5. Banking Commission or COBAC: the Central African Banking Commission;

6. Community or CEMAC: the Economic and Monetary Community of Central Africa;

7. Bank account: account opened and held in its books by a credit or microfinance institution in the name of a natural or legal person for the purpose of carrying out banking operations or operations related to banking within the meaning of the Annex to the Convention of 17 January 1992 or operations authorized to microfinance institutions within the meaning of Regulation No. 01/17/CEMAC/UMAC/COBAC, with the exception of operations related to payment services referred to in Article 3, paragraph 6;

8. Payment account: account held in the name of one or more clients, in the books of a payment service provider, for the purpose of executing payment transactions, with the exception of those related to payment means and services referred to in Article 3, paragraph 6 and Article 7, paragraph 1;

9. Distributor and sub-distributor: any natural or legal person offering payment services to its clientele, in the name and for the account of one or more authorized payment service providers;

10. Funds: banknotes and coins (cash), book money, and electronic money;

11. Payment instrument: alternatively or cumulatively, any personalized device or set of procedures that allow a client to give a payment order;

12. Payment order: instruction from a payer or beneficiary to a payment service provider ordering the execution of a payment transaction;

13. Payment transaction: action consisting of depositing, transferring, or withdrawing funds, independently of any underlying obligation between the payer and the beneficiary, ordered by the payer or the beneficiary;

14. Technical partner: legal person that provides a payment service provider with technical services as well as material and software conditions for processing operations related to payment services;

15. Payer: natural or legal person who orders or authorizes the execution of a payment transaction;

16. Payment service provider: authorized establishment that provides payment services as a regular profession.

17. Payment services: the issuance, making available, or management of payment instruments or means, or the execution of payment orders, as defined in Article 3 of this regulation.

TITLE 2:

PAYMENT SERVICES

Article 3- Payment services are the following activities, linked or related to the making available or management of payment means defined in Article 12 of Regulation No. 03/16/CEMAC/UMAC/CM:

1. services allowing the deposit and withdrawal of cash on a bank or payment account and the related management operations;

2. the execution of the following payment transactions associated with a bank or payment account:

   a. direct debits, including individually authorized direct debits;

   b. payment transactions carried out with a payment card or a similar device allowing these operations to be performed;

   c. transfers, one-off or standing;

3. the execution of the following payment transactions associated with a credit:

   a. direct debits, including individually authorized direct debits;

   b. payment transactions carried out with a payment card or a similar device allowing these operations to be performed;

   c. transfers, one-off or standing;

4. the making available of payment instruments or the acquisition of payment orders;

5. fund transmission services, not involving an account of either the payer, the beneficiary, or both;

6. the issuance and management of electronic money.

Article 4- A payment transaction may be ordered:

a) by the payer, who gives a payment order to their payment service provider;

b) by the payer, who gives a payment order through the beneficiary who, after collecting the payment order from the payer, transmits it to the payer's payment service provider, where applicable, through their own payment service provider;

c) by the beneficiary, who gives a payment order to the payer's payment service provider, based on the consent given by the payer to the beneficiary and, where applicable, through their own payment service provider.

TITLE 3:

PAYMENT SERVICE PROVIDERS AND AUTHORIZED ACTIVITIES

Article 5- Credit institutions, microfinance institutions, and authorized or authorized payment institutions are empowered to exercise the role of payment service provider in accordance with the provisions of this regulation.

Payment service providers may provide one or more of the payment services provided for in Article 3 of this regulation.

Article 6- Payment institutions are establishments that, as a regular profession, exclusively provide payment services and related services, under the conditions set by this regulation.

The regulation relating to the conditions of exercise and supervision of financial institutions applies mutatis mutandis to payment institutions, unless derogated by this regulation and its subsequent texts.

The Banking Commission fixes by regulation the specific derogations from the rules of exercise and control of each payment service.

Article 7- Payment institutions may neither make available nor manage banking payment means, notably checks, promissory notes, bills of exchange, as well as documentary credits.

Subject to the provisions of Article 3-5 of this regulation, payment institutions hold payment accounts that are used exclusively for payment transactions.

Article 8 : Payment institutions do not carry out the activity of collecting deposits. The funds received by payment institutions from clients remain the property of the clients; they do not constitute deposits within the meaning of Article 5 of the Annex to the Convention of 17 January 1992 and Article 21 of Regulation No. 01/17/CEMAC/UMAC/COBAC.

Article 9- Payment service providers are not authorized to grant, in any form, credit services in the context of the issuance and management of electronic money, nor to pay interest on funds received in exchange for units of electronic money issued.

However, funds from a credit granted to a client by a credit or microfinance institution may be used to acquire units of electronic money.

Article 10 : Payment institutions may:

1/ grant deferred debit of their clients' accounts, for payment transactions carried out with a payment card or a similar device, under the following conditions:

• the total amount of payments is debited from the payment account in a single installment, on a monthly periodicity;

• the total amount of payments debited with deferral does not exceed the authorized ceiling of the outstanding balance of the payment instrument used.

2/ grant credit payments under the following conditions:

• the credit is authorized exclusively in the context of a payment transaction for a good or service;

• the total amount of credit does not exceed an amount of 100,000 CFA francs;

• the repayment period does not exceed a duration of three months.

In the implementation of the provisions of the preceding paragraphs, payment institutions must respect the rules relating to the effective global rate and the usury rate applicable to financial institutions.

Article 11- In addition to payment services, payment institutions are authorized to exercise the following related services:

1. the placement of resources, drawn from their own funds, in one or more types of low-risk, liquid, and safe accounts and assets, as defined by COBAC regulation;

2. currency exchange for the purpose of depositing into a payment account in CFA francs;

3. guaranteeing the execution of payment transactions on behalf of other payment service providers;

4. the management and operation of payment machines and terminals;

5. custody, recording, and data processing services on behalf of other payment service providers.

Article 12- Payment service providers provide payment services in strict compliance with the exchange regulations in the States of CEMAC.

Microfinance institutions provide payment services in strict compliance with the provisions of Regulation No. 01/17/CEMAC/UMAC/COBAC on the conditions for exercising and controlling the microfinance activity in CEMAC, notably in its Articles 19 and 23.

The services performed by payment institutions are confined within CEMAC. Payment institutions may receive, for their own account or on behalf of their clients, funds transferred from outside CEMAC.

TITLE 4:

REGULATION, SUPERVISION AND MONITORING

Article 13- The Banking Commission fixes, notably for payment service providers, the rules relating to:

• the configuration and functional modalities of payment services, as well as the legal relationships between payment service providers and their clients in the context of providing these services;

• modes of administration and management, notably the number and quality of managers, as well as corporate governance in these establishments;

• minimum capital requirements;

• management standards that these establishments are required to respect in order to guarantee their liquidity, solvency, the balance of their financial situation, and the sustainability of their activities;

• client protection standards;

• supervision and control standards applicable to these establishments, notably in terms of internal control and risk management, combating money laundering and terrorist financing, external control;

• the chart of accounts, consolidation of accounts, and publication of accounting documents and other information of these establishments.

Article 14- The Banking Commission is responsible for ensuring that payment service providers comply with the legislative and regulatory provisions issued by the Ministerial Committee of the UMAC, by the National Monetary Authorities, by the Central Bank, or by itself, which are applicable to them, and to sanction any breaches found.

Article 15- The supervision of payment service providers is exercised through document and on-site controls by the Banking Commission.

The Banking Commission is authorized to request from payment service providers, their statutory auditors, technical partners, distributors, sub-distributors, and any other person or organization whose assistance may be required, all useful information or justifications for the exercise of its mission. The interested parties are required to comply with the requests addressed to them.

Article 16- Payment service providers who do not meet within the time limits prescribed in this title the obligations prescribed incur penalties, the calculation and recovery modalities of which are fixed in accordance with the provisions of the Annex to the Convention of 17 January 1992, for credit institutions and payment institutions, and of Regulation No. 01/17/CEMAC/UMAC/COBAC of 27 September 2017, for microfinance institutions.

Article 17- When COBAC identifies malfunctions in the management or control of a payment service provider, it takes all safeguarding, restructuring, or disciplinary measures provided for by Regulation No. 02/14/CEMAC/UMAC/COBAC/CM, for credit institutions and payment institutions, and Regulation No. 01/17/CEMAC/UMAC/COBAC, for microfinance institutions, in order to sanction the breaches found, preserve or restore normal operating conditions, or, where applicable, ensure the settlement of the establishment's liabilities.

Article 18- The Central Bank fixes the rules relating to:

• technical and functional standards applicable to technological solutions used to guarantee the security, efficiency, and reliability of payment services;

• the legal regime for the issuance of payment means and the conversion of electronic money into book or cash money;

• the interoperability of technical systems or platforms for the provision of payment services;

• the ceilings for payment instruments, payment transactions, and related fees.

Article 19- The Central Bank ensures the monitoring of compliance, security, and availability of technical solutions for the provision of payment services and the use of payment means.

In accordance with Article 255 of Regulation No. 03/16/CEMAC/UMAC/CM, the Central Bank establishes or approves interbank payment systems for the provision of payment services.

It is authorized to request from payment service providers all information or justifications useful for the exercise of the monitoring provided for in this article.

The Central Bank communicates to COBAC the breaches identified in the context of the monitoring exercised under this article for the purposes:

• of implementing coercive or disciplinary measures provided for by the regulation,

• or, where applicable, of withdrawing authorization, revoking prior authorization, or issuing a non-objection notice provided for in Titles 5 and 6 of this regulation.

When a payment service is provided via a mobile telephony solution, the Central Bank may resort, to ensure the monitoring provided for in this article, to the public body responsible for the regulation, control, and monitoring of telecommunications and information and communication technology activities in the State of establishment of the payment service provider.

Article 20- The Banking Commission and the Central Bank each determine, within their respective competencies, the list, content, models, periodicity, modalities, and deadlines for the transmission of documents that payment service providers are required to send to them.

The documents referred to in the preceding paragraph are transmitted to COBAC, which, where applicable, communicates them to BEAC.

Article 21- The Monetary Authority takes, on the advice of the National Credit Council, decisions relating to the conditions for the establishment of agencies and counters, the organization of common services, all questions concerning the organization and functioning of payment service providers, other than those falling within the competencies of the Banking Commission and the Central Bank.

Article 22- Professional secrecy is not enforceable against the Monetary Authority, the Banking Commission, and the Central Bank in the exercise of their missions provided for by this regulation.

TITLE 5:

AUTHORIZATION OF PAYMENT SERVICE PROVIDERS

Article 23 : The exercise as a payment service provider on the territory of one of the CEMAC States is subject to the authorization of the National Monetary Authority, delivered after the conforming opinion of the Banking Commission. The authorization decree states the payment service(s) that the provider is authorized to provide.

The exercise of the functions of manager or statutory auditor of a payment service provider is subject to the authorization of the Monetary Authority, delivered after the conforming opinion of the Banking Commission.

The conditions and modalities for granting authorization to payment service providers, their managers, and statutory auditors are those fixed, subject to the provisions of this regulation or its subsequent texts, by:

• Regulation No. 02/15/CEMAC/UMAC/COBAC of 27 March 2015 and its implementing texts, for credit institutions and payment institutions;

• Regulation No. 01/17/CEMAC/UMAC/COBAC of 27 September 2017 and its implementing texts, for microfinance institutions.

Article 24- In addition to the conditions fixed by the texts referred to in Article 23 of this regulation, COBAC cannot issue a favorable opinion for the authorization of a payment service provider unless the exercise conditions fixed by this regulation are met.

COBAC ensures the consistency between the payment services for which authorization is sought, the proposed strategy, the activity program that the applicant intends to implement, and the means envisaged, notably the adequacy of the envisaged own funds to the risk profile, in order to determine the establishment's capacity to comply with prudential standards at creation and subsequently.

When the consistency referred to in the preceding paragraph is not established, COBAC may:

• require, within a time limit it sets, the strengthening of the means envisaged by the applicant; or
• reclassify the authorization application based on the business plan presented by the applicant. In this case, the applicant is informed by simple letter that they have a one-month deadline to give their acceptance. The absence of response within this deadline constitutes refusal.

Failing to apply the measures provided for in the preceding paragraph, or if the applicant does not accept the reclassification, COBAC issues an unfavorable opinion.

For payment institutions, COBAC ensures in particular that the establishment justifies a escrow account contract with one or more banks, an insurance contract, or a bank guarantee, compliant with the requirements of Title 9 of this regulation.

Article 25- For the application of Article 24 of this regulation, the Banking Commission refers to the Central Bank to obtain its opinion on the conformity of the technical solution envisaged for the provision of each payment service, notably in terms of:

• technical and functional standards;
• security and efficiency of information systems;
• quality of transmissions and network access;
• interoperability of the technical solution, where applicable.

Article 26- When the provision of a payment service is envisaged via a mobile telephony solution, the BEAC ensures that the establishment or its technical partner justifies authorization from the body referred to in Article 19 of this Regulation for the use of the specific technology for this service.

Article 27- From the date of submission, the BEAC has a period of three months to rule and notify its opinion to the COBAC. The absence of a decision at the expiration of this period constitutes a favorable opinion from the BEAC. A reasoned unfavorable opinion from the BEAC binds the COBAC.

The time limit provided in the preceding paragraph does not suspend the time limits set in Article 8 of Regulation No. 02/15/CEMAC/UMAC/COBAC and Article 51 of Regulation No. 01/17/CEMAC/UMAC/COBAC.

Article 28- The composition of the application file for approval is fixed by regulation of the COBAC.

TITLE 6:

APPROVAL OF THE OFFER AND EXTENSION OF ACTIVITIES OF PAYMENT SERVICE PROVIDERS

Article 29- The provision by a payment service provider of a payment service not covered by its approval (change or extension of activity) is subject to the prior authorization of the COBAC. The establishment may only provide the new service as of the date of issuance of the prior authorization from the COBAC.

The use of a new technical solution for a payment service whose provision is authorized to a payment service provider is subject to prior information to the COBAC. The establishment may only use the technical solution as of the date of issuance of the non-objection opinion from the COBAC.

Article 30- The application file for prior authorization or information is sent in duplicate by the requesting establishment to the President of the COBAC, against receipt.

The composition of the application file for prior authorization or information is fixed by regulation of the COBAC.

Article 31- From the date of receipt of the complete file, the COBAC has a period of three months to rule and notify its decision or opinion to the establishment. The absence of a decision or opinion at the expiration of this period constitutes prior authorization or a non-objection opinion.

When the application file for prior authorization or information is incomplete, the COBAC informs the applicant in writing and invites them to provide the missing information or documents. In this case, the processing time for the file is suspended until receipt of the missing information or documents.

Within the framework of the examination process, the COBAC is empowered to request all information deemed useful from the requesting establishment for the examination of the file.

Article 32- The COBAC may only issue a prior authorization or a non-objection opinion referred to in Article 29 of this Regulation if it is assured that:

• the requesting establishment presents sufficient guarantees of compliance with the conditions of exercise set by this Regulation;
• the provision of the payment service or the use of the technical solution does not jeopardize the sustainability of the establishment.

The COBAC ensures consistency between the payment service for which the authorization referred to in Article 29, paragraph 1 of this Regulation is sought, the proposed strategy, the program of activities that the applicant intends to implement, and the means envisaged, notably the adequacy of the envisaged own funds to the risk profile, in order to determine the establishment's ability to comply with prudential standards at the launch of the activity and subsequently.

When the consistency referred to in the preceding paragraph is not established, the COBAC may require, within a time limit it sets, the strengthening of the means envisaged by the applicant. In the event of failure to apply the measures provided for in the preceding paragraph, the COBAC issues an unfavorable opinion.

Article 33- For the application of Article 32 of this Regulation, the Banking Commission refers the matter to the Central Bank so that it rules on the conformity of the technical solution envisaged for the provision of the payment service, particularly regarding:

• technical and functional standards;
• security and efficiency of information systems;
• quality of transmissions and access to the network;
• interoperability of the technical solution, where applicable.

Article 34- When the provision of the payment service is envisaged via a mobile telephony solution, the BEAC ensures that the establishment justifies authorization from the body referred to in Article 19 of this Regulation for the use of the specific technology for this service.

Article 35- From the date of receipt of the file, the BEAC has a period of two months to rule and notify its opinion to the COBAC. The absence of a decision at the expiration of this period constitutes a favorable opinion from the BEAC. A reasoned unfavorable opinion from the BEAC binds the COBAC.

Article 36- The prior authorization or non-objection opinion of the COBAC is notified to the requesting establishment, with copies to the Monetary Authority, the National Directorate of the BEAC, and the National Credit Council. The prior authorization or non-objection opinion is published by the COBAC in at least one of the main press organs of the State of implantation at the expense of the requesting establishment.

The refusal of prior authorization or the duly motivated objection is notified to the requesting establishment, with copies to the Monetary Authority, the National Directorate of the BEAC, and the National Credit Council.

The COBAC maintains and updates the list of payment service providers holding a prior authorization or a non-objection opinion for the provision of payment services.

Article 37- Credit and microfinance institutions of the CEMAC active on the date of entry into force of this Regulation must declare to the Banking Commission, within a period of six months, the payment services they provide and the technical solutions used.

Based on this declaration, the Banking Commission takes note of the services for which the establishment effectively holds the required approval or authorization, and notifies each of these establishments, for each service retained, the corresponding service with regard to the services provided for in Article 3 of this Regulation.

The extension of activity or change of technical solution, referred to in Article 29 of this Regulation, is assessed relative to the notification provided for in the preceding paragraph.

TITLE 7:

INFORMATION OBLIGATIONS AND CONDITIONS FOR EXECUTION OF PAYMENT OPERATIONS

Article 38- The opening of a payment account or subscription to a payment service is subject to the conclusion by the payment service provider or its distributor, where applicable, and the client, of a contract that clearly establishes, in a legible manner, under penalty of nullity:

• the identification of the payment service provider;
• where applicable, the identification of the distributor or sub-distributor of payment services, including their brand, logo, and trade name or corporate name;
• the identity of the client, consistent with an official document currently valid presented by the client;
• the conditions of use of the payment services;
• the description of possible uses of the payment services;
• the ceilings applied to authorized operations;
• the pricing of services;
• the respective obligations and responsibilities of the client and the payment service provider;
• the risks and prudent measures inherent to the use of payment services;
• the modalities, procedures, and time limit for opposition in case of theft, loss, or falsification of a payment instrument or request for refund of funds;
• the conditions and modalities for contesting operations performed;
• the conditions and modalities for the restitution of funds, including any associated fees;
• the conditions and modalities for closing the account;
• the elements allowing the identification and recognition of the acceptance network of the provider's services or to which it adheres, consisting of distributors, sub-distributors, and merchants accepting payment operations performed with payment instruments issued by the provider, including their brand, logo, and window signage.

The subscription contract concluded with each client states that the payment service provider is responsible, vis-à-vis the client, for the proper outcome of operations carried out by a distributor or sub-distributor.

The client is informed, in writing, in an official language of the State of implantation, in a clear and easily understandable form, of the contract conditions before they are bound by a contract or an offer.

Article 39- A payment account held by a payment institution may only show a debit position in the event of credit duly granted by the client.

Article 40- Payment services are provided within the limits of the ceilings for accounts, instruments, payment operations, and associated fees fixed by current regulations.

Article 41- Any modification of the information and contract conditions provided for in Article 38 of this Regulation is proposed by the payment service provider to a client, in writing leaving a trace of its receipt, in an official language of the State, in a clear and easily understandable form, no later than one month before the date planned for its entry into force.

The client may accept or reject the modification before the date proposed for its entry into force. The payment service provider informs the client:

• that the client is deemed to have accepted the modification if they do not notify the payment service provider, before the proposed entry into force date of this modification, that they do not accept it;

• that in the event the client rejects the modification, they have the right to terminate the contract without fees and with effect at any moment until the date on which the modification would have been applied.

It is incumbent upon the payment service provider to prove that it meets the information requirements fixed in this Title.

Article 42- Any payment operation ordered by a client gives rise to the immediate making available, to the client/payer and, where applicable, to the beneficiary, of the following information:

• the name of the payment service provider;

• the reference number of the distributor or sub-distributor, where applicable;

• the nature of the operation and the associated payment service;

• the amount and fees of the operation;

• the date, time, and reference number of the operation;

• the identity of the payer, the beneficiary, and, where applicable, the initiator of the operation;

• the confirmation of the success of the initiation of the payment order.

Article 43- The payment service provider makes available to the client appropriate means allowing them to oppose payment instruments in their possession in case of loss or theft and to take all necessary measures to prevent any use of the payment method once opposed.

Payment services are provided in accordance with current regulations regarding the legal regime of payment means and consumer protection of financial services, particularly the rules relating to:

• consent and authorization of a payment operation;
• receipt of a payment order;
• execution time limits for a payment order;
• refusal to execute a payment order;
• revocation of a payment order;
• value date of a payment operation;
• responsibilities of the client and the provider in case of loss, theft, or falsification of a payment instrument, unauthorized payment operation, or poorly executed operation.

Article 44- The payment service provider puts in place a permanent device for monitoring, receiving, and processing client complaints.

This device must:

• be accessible via various channels at all times;
• commit the establishment to a time limit for processing complaints;
• ensure the traceability of complaints received and processed.

TITLE 8:

TECHNICAL REQUIREMENTS, TRACEABILITY, INFORMATION RETENTION, AND REPORTING

Article 45- Within the framework of operations and payment services provided for by this Regulation, electronic writing, particularly electronic documents and transmissions, may substitute for paper writing and is recognized as equivalent, particularly regarding its legal validity and probative force, when it is established and maintained according to a reliable technical process, which guarantees, at all times, the origin of the electronic writing and its integrity during electronic processing and transmissions.

Article 46- Any technical solution used for the provision of a payment service must satisfy specifications or requirements aiming to:

• ensure the recording and processing of payment operations in real time;
• ensure high availability of the platform;
• ensure message integrity;
• maintain information confidentiality;
• guarantee transaction authenticity;
• ensure transaction non-repudiation.

The payment service provider must notably:

• put in place a proven continuity device for its operations;
• implement a risk management strategy defining the policy, practices, and procedures associated with risks inherent to the system and the payment means or instruments made available;
• prove the existence of an audit trail ensuring traceability of operations from the origin of the payment order to its outcome.

Article 47- Any technical solution or payment service platform chosen by any payment service provider must conform to the requirements fixed in Article 46 of this Regulation, be accessible and interoperable with those of other payment service providers, under objective, non-discriminatory, and proportionate conditions.

The BEAC defines the minimal and mandatory content of the interoperability of technical solutions, platforms, and payment systems set up or used by payment service providers.

The clearing and settlement of operations related to payment services can only be realized in a payment system authorized or organized by the Central Bank, in accordance with the provisions of Articles 253 to 268 of Regulation No. 03/16/CEMAC/UMAC/CM.

Article 48- Funds received by a payment service provider from clients for the provision of payment services are distinctly identified in the accounting of the establishment, as well as in that of the domiciliary bank for payment institutions, following the prescriptions issued by regulation of the COBAC. The title of these accounts mentions the origin and allocation of the sums deposited therein.

Article 49- Funds received by a payment institution from clients must be subject to daily reconciliation with the balance of the escrow account.

Article 50: The payment service provider ensures the retention of documents related to the identification and traceability of payment operations for a period of ten years, starting from the date of their recording or realization.

Article 51- Payment institutions are subject to the same reporting obligations to the Banking Commission as financial institutions, subject to particular specifications issued by regulation of the COBAC.

TITLE 9:

PROTECTION OF FUNDS AND PRUDENTIAL STANDARDS APPLICABLE TO PAYMENT INSTITUTIONS

Article 52- Funds received by a payment institution from clients for the provision of payment services remain the property of the clients.

They must not be used to finance the operating needs of said establishment or credits granted to clients, as defined in Article 10 of this Regulation.

They can only be used for the purpose of carrying out payment operations.

They are protected against any recourse by other creditors of the payment institution, including in the event of enforcement proceedings or collective debt clearance proceedings opened against the establishment.

Article 53- Funds received by a payment institution from clients, directly or through distributors or sub-distributors, must be domiciled no later than the following day, if they have not yet been handed over to the beneficiary, in an escrow account exclusively dedicated to this purpose, opened in one or more banks of the CEMAC.

In addition to the escrow obligation provided for in the preceding paragraph, the COBAC may also require the payment institution to cover funds received for the provision of payment services, by an insurance contract or a first-demand guarantee from a credit institution not associated with the payment institution.

Article 54- The escrow account provided for in Article 53 of this Regulation is subject to a specific account agreement duly signed by the payment institution and the domiciliary bank. This contract provides at minimum clauses relating to the following elements:

• the modalities of its functioning;

• the modalities of fund management by the bank;

• the modalities of informing the payment institution about movements affecting the escrow account;

• the applicable pricing.

The escrow account meets the following characteristics:

• be global: its balance corresponds to the sum of funds received from customers and not handed over to beneficiaries no later than the next working day after they were received;

• be separate: it is distinctly identified from any other account opened by the payment institution itself, and its title mentions the allocation of the sums deposited therein;

• be individualized: the payment institution has, at all times, its breakdown by payment account holder.

The escrow account is remunerated by the domiciliary bank for the benefit of the payment institution, according to the modalities agreed upon in the convention governing the escrow account.

Article 55- Subscription to a new escrow account contract, a new insurance or guarantee contract, or modification of an escrow account contract, insurance contract, or guarantee contract, provided for in Article 53 of this Regulation, are notified to the COBAC within a period of one month from their occurrence.

The Banking Commission orders the resolution of new contracts or modifications when it considers that these changes are not compliant or do not allow compliance with the provisions of this Regulation.

Article 56- Any payment institution permanently possesses sufficient treasury to cover the liquidity needs of its clients.

Article 57- Payment institutions equip themselves with an adequate anti-money laundering and counter-terrorism financing device, compliant with Regulation No. 01/16/CEMAC/UMAC/CM on prevention and repression of money laundering and terrorism financing and proliferation in Central Africa.

For any subscription to a bank or payment account or payment operation, the payment service provider, distributor, or sub-distributor carries out due diligence regarding customer knowledge, notably the certain identification of the order giver and the beneficiary, knowledge of their activities, as well as the origin of the funds. They are required, in case of doubt, to file a suspicion report with the competent authorities.

The COBAC fixes by regulation the specific obligations regarding anti-money laundering and counter-terrorism financing and proliferation applicable to payment service providers.