Insights into E-Money Regulations and Digital Merchant Initiatives
Explore the latest initiatives identified for E-Commerce merchants, including non-banking player enhancement, simplified merchant onboarding, increased acceptance points, infrastructure development, and cybersecurity measures. Delve into the reasons behind regulations for EMIs, objectives of E-Money Regulations, guidelines for digital merchant onboarding, and the background of recommendations by the E-Commerce Policy Committee. Stay informed about the forthcoming regulatory framework and guidelines set to transform the payments landscape in Pakistan.
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Presentation Transcript
Presentation on Initiatives Identified for E Presentation on Initiatives Identified for E- -Commerce Merchants Merchants Commerce 1
Content Content 1. Enhancement in non-banking players for merchants 2. Simplified Merchant Onboarding 3. Increase in merchant acceptance points (QR) 4. Infrastructure 5. Cyber Security 2
Why Regulations for EMIs? Why Regulations for EMIs? Negligible participation of non-banks in Payments landscape Lack of focus of banks on digital payments/ infrastructure Low usage of digital payments particularly in sub-urban and rural areas FinTechs have potential to bring disruption in payments in Pakistan Regulations will promote competition among banks & non-banks in payments landscape 4
Objectives of E Objectives of E- -Money Regulations Money Regulations To provide a Regulatory framework for prospective e-money payment service providers in order to facilitate their entry in the payments landscape of Pakistan as per international best practices Will facilitate escrow arrangements which will promote e-commerce Status The guidelines are at the approval stage. It is expected that the same will be issued during current FY. 5
Background Background Recommendation by E-Commerce Policy Committee on Payments Infrastructure Chaired by Director, PSD Less digital payment acceptance points POS machines have hovered around 50k for many years 7
Objective of Guidelines Objective of Guidelines Under the guidelines, SBP is introducing a new category of digital merchants for push and pull based transactions Banks can now onboard merchants based on tiered Know Your Customer (KYC) requirements and sales per month. The digital merchants shall be allowed to accept push and pull based payments transactions such as QR, IBFT, plastic cards, wallet to wallet transfers, NFC etc. Status The guidelines are at the approval stage. It is expected that the same will be issued during current FY. 8
QR QR In Pakistan In Pakistan QR Payments are picking up pace due to lower cost Estimated that more than 100,000 QR are deployed in Pakistan Although majority of QRs in Pakistan are based on EMV Co. Standards, they lack interoperability Solution Solution Complete EMVCo standard based QR generation (at both ends) Capability to scan and process QR issued by other players SBP is mandating standardized QR Generation, based on complete EMV Co. specifications Status: Circular to be issued by this month. 10
Micro Payment Gateway (MPG) Micro Payment Gateway (MPG) A simple, secure and innovative payment solution for people of Pakistan MPG will allow individuals to make any payment digitally, in a simple, fast, low cost, irrevocable and secure manner 12
Status Status 14
Initiatives Initiatives PSD Circular No. 09 of 2018 on Security of Digital Payments SBP s instructions with regard to safety and security of digital transactions Failure to comply with the above instructions will lead to penal action by SBP such as suspension of non-compliant digital payment products and services of the banks/MFBs 16
Thank you Thank you 17
