Status of Electronic Money Payment Systems in CEMAC - 2018

STATUS OF ELECTRONIC MONEY PAYMENT SYSTEMS IN CEMAC - 2018 CENTRAL BANK OF THE STATES OF AFRICA (BEAC)

CENTRAL SERVICES

GENERAL DIRECTION OF OPERATIONS

PAYMENT SYSTEMS AND INSTRUMENTS DEPARTMENT

Table of Contents
INTRODUCTION...................................................................................................................... 3

1. PRESENTATION OF THE ACTIVITY................................................................................. 4
2. EVOLUTION OF THE ACTIVITY ....................................................................................... 4
3. SUBSCRIBERS TO ELECTRONIC MONEY PRODUCTS .................... 6
4. ELECTRONIC MONEY TRANSACTIONS.................................................... 8
5. PAYMENTS BY ELECTRONIC MONEY ......................................................... 9
6. USAGE OF PREPAID CARDS ............................................................................ 10
7. OTHER ISSUES ..................................................................................... 11
   GLOSSARY............................................................................................................................ 14

INTRODUCTION
According to the provisions of Article 1 of its statutes, BEAC has among other missions that of promoting the proper functioning of payment and settlement systems. Modern and efficient payment and settlement systems that ensure the speed of financial and commercial transactions, within a secure technical and legal environment, are a response to the acceleration of capital flows and the globalization of the world economy following technological innovations, particularly in information and telecommunications. Driven by this requirement, the Monetary Authorities of the Economic and Monetary Community of Central Africa (CEMAC) have initiated since 1999 a major regional reform aimed at modernizing payment systems in the member states of the zone. To this end, CEMAC Regulation No. 02/03/CEMAC/UMAC/CM of April 4, 2003, relating to payment systems, instruments, and incidents, was adopted. This regulation is the first regulatory text addressing electronic money issuance activity. Electronic money is defined in CEMAC as monetary value stored on an electronic medium against the handover of funds of equal value, which can be used to make payments to persons other than the issuer, without involving bank accounts in the transaction. The definition of electronic money also highlights the notion of an electronic payment instrument, i.e., the means by which the holder (owner of electronic money accounting units) accesses electronic money for its use. These instruments are the prepaid card and the mobile phone. In the latter case, we refer to Mobile Money. In 2018, the regulatory framework governing the activity was structured around:
 Regulation No. 01/11-CEMAC/UMAC/CM of September 18, 2011, setting the conditions for exercising electronic money issuance activity, as well as the roles of Regulatory Authorities;  Instruction No. 01_GR of October 31, 2011 from the BEAC Governor, relating to the monitoring of electronic money payment systems with an annex containing a reference framework listing elements enabling BEAC to fulfill its monitoring mission;  Governor's Instruction No. 02/GR/UMAC of May 7, 2014 relating to the implementation of multibanking within electronic money issuance activity.

1. PRESENTATION OF THE ACTIVITY
   As of December 31, 2018, 21 banks were authorized to exercise electronic money issuance activity in the zone. However, 19 banks were effectively exercising the activity, offering 22 electronic money services across CEMAC, including 15 Mobile Money and 7 prepaid cards. In Cameroon, Société Générale redefined its digital and financial inclusion strategy around an internet-downloadable application offered by its partner YUP Cameroon (a subsidiary of the same group). UBA Cameroon partnered with VIETTEL Cameroon to make an electronic wallet available to the population under the commercial name, "POSA". In Equatorial Guinea, BGFIBank was the first bank to offer electronic money services via Mobile Money to the population, through an internet-downloadable application. The figures contained in this document result from declarations by institutions effectively exercising electronic money issuance activity and supervised by BEAC, listed in Annex 1. Statistics from all countries have been integrated except Equatorial Guinea, where the launch of the activity is very recent.
2. EVOLUTION OF THE ACTIVITY
   As of December 31, 2018, there were 53,303 electronic money service distributors across CEMAC, compared to 39,731 at the end of 2017.
   Source: BEAC, DSMP
   In 2018, the number of financial transactions in electronic money amounted to 572 million, compared to 303 million during 2017, reflecting the strong growth of this activity in the sub-region, of which 99% comes from Mobile Money.

Source: BEAC, DSMP
In value, global electronic money transactions, which stood at 4,700 billion F CFA in 2017, exceeded 8,296 billion F CFA by the end of 2018, with 96% representing Mobile Money.
Source: BEAC, DSMP
However, these trends show a very large disparity between countries. In Equatorial Guinea, the activity of the sole authorized bank (BGFIBank) is very recent to be fully accounted for. In CAR, despite observing a significant increase in 2018, the activity is still taking off since the launch of Orange Money service in 2016.

Country/Year	2016 Number	2016 Value	2017 Number	2017 Value	2018 Number	2018 Value
Cameroon	49,831,982	783,935,210	276,929,341	2,418,636,415	6,333,005,588	739,120,568,149
Chad	9,122,055	92,863,922	307,484,823	1,393,674,098	6,796,740	98,615,699,752
CAR	14,218	1,073,567	837,213,694	1,801,942,450	296,137	10,118,231,154
Congo	2,409,726	53,488,658	188,102,236	628,118,299	500,386	29,676,678,318
Gabon	36,458	336,596,494	301,120,778	96,108,153	625,062	308,120,568,108
TOTAL	97,836,317	1,631,704,384	666,303,266	265,470,379,405	173,572,362	8,296,166,023,386
2016	2017	2018

Electronic money transactions by number and value Source: BEAC, DSMP The evolution of electronic money holdings, i.e., the sums held by users (holders and distributors) in electronic wallets at the end of December each year, demonstrates growing public confidence in this payment method:
Evolution of electronic money holdings by country

Country/Year	2016	2017	2018
Cameroon	23,093,868,867	62,416,135,281	93,738,765,071
Chad	4,144,578,810	2,989,392,394	3,016,564,924
CAR	188,483,447	219,584,940	550,000,000
Congo	3,412,393,193	3,924,477,437	6,011,142,734
Gabon	12,289,670,253	19,214,810,561	22,417,369,345
TOTAL	43,128,994,570	88,764,400,613	125,733,842,074

Source: BEAC, DSMP
3. SUBSCRIBERS TO ELECTRONIC MONEY PRODUCTS
The number of electronic wallets has evolved slightly. It increased from 16 million subscribers at the end of 2017 to 17.8 million in December 2018. The active rate, i.e., clients who used their electronic money instrument over the last 30 days, rose from 28% in 2017 to 38% in 2018. Source: BEAC, DSMP

Actors have no specific target for their commercial actions. They register clients as opportunities arise.
It is difficult to define exactly the truly concerned population because, on one hand, some electronic money instrument users (subscribers) hold multiple electronic wallets with different banks; on the other hand, among most operators, non-subscribed persons can perform some transactions: receiving funds, withdrawals, deposits.

Country/Year	2016 Subscribers (Active)	2017 Subscribers (Active)	2018 Subscribers (Active)
Cameroon	5,452,730 (1,615,404)	8,003,252 (3,230,236)	9,244,064 (4,979,736)
Chad	3,588,480 (348,668)	2,486,259 (218,021)	1,832,668 (151,972)
CAR	1,520,764 (3,046)	1,070,236	79 (6,448)
Congo	2,373,468 (96,411)	4,299,229	338,428 (4,669,980)
Gabon	1,236,767 (684,499)	1,264,485 (639,925)	2,091,033 (697,705)
TOTAL	12,652,965 (2,745,746)	16,056,271 (4,427,680)	17,861,424 (6,752,983)
Active Rate: 2016: 22%	2017: 28%	2018: 38%

Distribution of electronic money wallets
Source: BEAC, DSMP
For financially excluded persons, specifically displaced people, the benefits are real: more than half of operators have formed partnerships with humanitarian organizations or social security funds. The data provided by authorized institutions unfortunately do not allow for a gender (sex) analysis of users. This implies that the gender approach is not taken into account in various commercial policies. Age analysis shows that young active workers are the most numerous among electronic money instrument users. Source: BEAC, DSMP

4. TRANSACTIONS OF ELECTRONIC MONEY
   In 2018, electronic wallet top-ups, i.e., customer cash deposits at sales points or via direct debit from bank accounts, reached 3,349 billion F CFA (compared to 1,814 billion F CFA for 2017), of which 3,247 billion F CFA (1,726 billion F CFA for all of 2017) was for Mobile Money. This instrument is also the premier means for electronic money transfers, as 99% of them are made via Mobile Money.
   | Category | Cameroon Number | Cameroon Value | Chad Number | Chad Value | RCA Number | RCA Value | Congo Number | Congo Value | Gabon Number | Gabon Value |
   | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
   | Top-ups | 105,169,424 | 2,487,061,018,268 | 5,363,921,364 | 77,940,270,525 | 9,311,971,286 | 1,724,203,155,532 | | | | |
   | Transfers | 73,881,236 | 1,428,869,790,197 | 266,740,176 | 5,917,109,449 | 23,266,995 | 8,160,259,627 | | | | |
   | ATM Withdrawals | 436,941 | 30,985,353,962 | - | - | - | - | | | | |
   | Counter Withdrawals | 111,202 | 367,219,462,462 | 404,329,659 | 37,343,349,733 | 53,294 | 3,429,056,695 | | | | |
   | Payments | 124,335,005 | 191,486,963,908 | 836,420,718 | 8,492,640,145 | 325,187,262 | 140,627,446 | | | | |
   | TOTAL | 415,024,972 | 6,333,005,588,738 | 6,796,740 | 98,615,699,752 | 296,137 | 10,118,231,154 | | | | |
   | 29,676 | 678,318 | 186,601,592 | 120,568 | 108,1536,239,902,149 | | | | | | |

Distribution of electronic money transactions in 2018 (Cameroon, Chad, RCA, Congo, Gabon) Source: BEAC, DSMP In 2018, electronic money benefited from state confidence. In Cameroon, for example, partnerships were concluded to collect various fees through this instrument. Moreover, school fee payments in hundreds of educational institutions were made via Mobile Money. Mobile Money also occupied a good place in fundraising operations. Thus, numerous tontines (rotating savings associations), humanitarian organizations, and even election candidates used this means to obtain financing.

5. PAYMENTS BY ELECTRONIC MONEY
   In 2018, electronic money payments exceeded 330 billion (compared to 229 billion in 2017) F CFA, of which 93% was with Mobile Money.
   Source: BEAC, DSMP
   Phone credit purchase via Mobile Money is the first service offered by all operators, including banks without a technical telecom partner. This transaction constitutes most payment operations (164 million transactions in 2018). It represents 23% of the activity by value. In all CEMAC countries, it is possible to pay a television subscription with Mobile Money. It is also possible to settle water and electricity bills. "Distance sales" are effective only on a few CEMAC internet sites that accept Mobile Money payments. Most of these sites are online gaming companies. Electronic money payments remain low. This is essentially due to the preference for banknotes and coins in main commercial points, and especially a still very discreet acceptance network. Indeed, while several major retail chains accept Mobile Money and bank card payments, few local neighborhood shops offer them. Note, however, that some

operators have launched programs to introduce local shops into their acceptance network.
6. USAGE OF PREPAID CARDS
Geographic distribution of prepaid card usage (Source: BEAC, DSMP) Prepaid cards are essentially used for international transactions. Most prepaid cards used locally are private cards for salary payments and certain social benefits.

7. OTHER ISSUES
   7.1. Taxation
   In several African countries, Mobile Money is subject to specific taxation. Regarding CEMAC, governments have not taken this option, preferring to support the growth of electronic payments by becoming major acceptors themselves. Thus, projects have been initiated to establish platforms capable of accepting multiple payment instruments. It is important for States to support this evolution to secure their own revenues and, ultimately, benefit from the effects of a more formal economy.
   7.2. Interoperability
   Interoperability in electronic money transactions should allow two electronic money users, registered with different institutions, to conduct financial transactions. If this is possible for international prepaid cards (Visa, Mastercard, etc.), it was not yet the case in 2018 for Mobile Money. However, several projects to implement this interoperability are underway, initiated by mobile telecom operators, the Gabonese State, and the Central Bank. In November 2018, MTN and Orange groups announced an alliance to create MOWALI (Mobile Wallet Interoperability), the company responsible for interoperability of Mobile Money transactions between their successive subscribers. The service should be accessible to other operators as well as banks and microfinance institutions. The file is currently under review by various national authorities and CEMAC, which must take decisions highlighting user protection. In Gabon, the State has undertaken work to implement the mobile payment interoperability platform. To this end, Gabon benefits from GIMAC (Central African Interbank Monetic Group) assistance. On August 10, 2018, the BEAC Governor signed an Instruction defining the scope of interoperability and interbanking of monetic payment systems in CEMAC. This text requires all issuers of payment instruments in CEMAC to issue fully interoperable payment means. Thus, ultimately, a Mobile Money user installed in CEMAC should be able to send and receive money to any other instrument holder (Mobile Money or card) or bank account owner, regardless of their bank, microfinance establishment, or payment institution. GIMAC works, in collaboration with its members (banks and microfinance establishments), to implement this interoperability as soon as possible.

CONCLUSION
The Ministerial Committee of the Monetary Union of Central Africa (UMAC), meeting on December 21, 2018, in Yaoundé, adopted Regulation No. 04/18 relating to payment services in CEMAC. Said regulation, which entered into force on January 1, 2019, allows among other things:

• clarifying the roles and responsibilities of COBAC (supervision) and BEAC (surveillance);
• distinguishing applicable prescriptions for the legal regime of payment instruments (products) from those relating to services (activities) and authorized providers (actors);
• prioritizing a comprehensive approach regulating payment service activities, including electronic money issuance and management;
• distinguishing and avoiding confusion between electronic money and payment accounts;
• clarifying authorization conditions for credit institutions and microfinance establishments to exercise payment service activities;
• creating a specific category of establishments providing, as their habitual and exclusive activity, payment services: payment institutions;
• clarifying the protection regime for customer funds handed over to payment establishments;
• clarifying expected requirements concerning distributors;
• defining specific rules regarding anti-money laundering and counter-terrorist financing.
  The new Regulation on payment services will be supplemented by 2 COBAC Regulations:
• a COBAC regulation relating to prudential standards applicable to payment establishments;
• a COBAC regulation relating to the approval and status changes of payment service providers.
  Finally, it will be BEAC's responsibility to define the technical and functional norms applicable to used technological solutions and to organize surveillance modalities to guarantee security, efficiency, and reliability of payment services.

Country	Issuer	Technical Partner	Product Type	Authorization Date	Launch Date	Commercial Name
Cameroon	BICEC	Orange CMR	Mobile Money *	29/07/2011	21/09/2011	Orange Money
Cameroon	MTN CMR	-	Mobile Money	29/07/2011	01/01/2012	MTN Mobile Money
Cameroon	Intelligentsia	-	Prepaid Card	13/05/2009	Nov-10	I-Card
Cameroon	SGBC	YUP Cameroun	Mobile Money	12/03/2018	01/07/2018	YUP
Cameroon	GTP	VISA	Prepaid Card	12/12/2012	12/12/2012	UBA Africard
Cameroon	Viettel Cameroun	-	Mobile Money	12/03/2018	01/10/2018	Nexttel Possa
Cameroon	ECOBANK CMR GTP	-	Prepaid Card VISA	18/07/2016	01/01/2017	CashXpress
Cameroon	GIE-GCB	-	Prepaid Card	01/05/2010	-	Carte Salaris
Cameroon	SPRINT-PAY CAMEROUN	-	Mobile Money	16/01/2019	-	SPEEDOH
Cameroon	BGFIBank Cameroun CHAKA Mobile	-	Mobile Money	28/11/2017	01/01/2018	BGFI Mobile
RCA	ECOBANK RCA Orange RCA	-	Mobile Money	14/01/2016	07/04/2016	Orange Money
RCA	BPMC Telecel RCA	-	Mobile Money	12/11/2018	-	Pata Biani
RCA	ECOBANK MTN Mobile Money	-	Mobile Money	29/07/2011	01/01/2012	MTN Mobile Money
RCA	Airtel Mobile Money	-	Mobile Money	03/10/2011	01/04/2012	Airtel Money
RCA	CHAKA Mobile Mobile Money	-	Mobile Money	16/01/2019	-	BGFI Mobile
RCA	UBA GTP	-	Prepaid Card VISA	29/08/2013	01/09/2013	UBA Africard
RCA	Airtel Mobile Money	-	Mobile Money	29/07/2011	01/03/2012	Airtel Money
RCA	Carte prépayée Visa	-	Prepaid Card	16/01/2019	16/01/2019	Carte BGFIBank Visa Prépayée
RCA	Mobile Money	-	Mobile Money	23/12/2015	-	BGFIMoney
RCA	BICIG Mobile Money	-	Mobile Money	11/07/2012	06/12/2012	BICIG Mobile
RCA	UBA GTP	-	Prepaid Card VISA	29/08/2013	01/11/2013	UBA Africard
Gabon	ORABANK Atlantique Télecoms (Moov)	-	Mobile Money	11/06/2014	01/07/2014	Moov Flooz*
Gabon	UGB Gabon Telecom	-	Mobile Money	20/01/2014	01/05/2014	Mobi Cash
Equatorial Guinea	BGFIBank GE Mobile Money	-	Mobile Money	12/11/2018	-	BGFIMoney
Equatorial Guinea	ECOBANK Airtel Mobile Money	-	Mobile Money	05/03/2012	May-12	Airtel Money
Equatorial Guinea	ORABANK TIGO Mobile Money	-	Mobile Money	11/07/2012	01/10/2012	Tigo Cash
Equatorial Guinea	UBA GTP	-	Prepaid Card VISA	21/05/2013	01/06/2013	UBA Africard
TOTAL GLOBAL 21

LIST OF INSTITUTIONS AUTHORIZED TO ISSUE ELECTRONIC MONEY AS OF 31/01/2019 Total Congo: 3 | TOTAL CENTRAFRIQUE: 2 | BGFIBank Gabon | GABON Total Chad: 3 | * The Orange Money Visa card, which provides access to the electronic wallet, received BEAC approval on July 18, 2016. Total Cameroon: 7 | CBC benefits from a special exemption since September 2015. Total Equatorial Guinea: 1 | * On March 23, 2018, Gabon Telecom terminated the partnership agreement between former ATLANTIQUE TEECOM GABON and ORABANK Gabon, ending the commercialization of Moov Flooz. Total GABON: 5 | CAMEROUN UBA Cameroun

GLOSSARY
All terms used in this document are understood as defined in Regulation No. 01/11-CEMAC/UMAC/CM of September 18, 2011, setting the conditions for exercising electronic money issuance activity, as well as the roles of Regulatory Authorities. Private card: bank card issued by a credit institution or retailer and usable only in the issuer's ATMs.