By John Chola
The Bank of Zambia has issued a new directive prohibiting unwarranted charges and fees on electronic money services in an effort to protect consumers and promote financial inclusion.
This move follows concerns that certain fees imposed by electronic money institutions (EMIs) on customers were unjustifiable and detrimental to Zambia’s efforts to widen access to financial services.
The directive, issued under the National Payment Systems Act of 2007 and the Bank of Zambia Act, specifically targets fees that are deemed to undermine consumer protection.
These include charges for opening or reactivating an electronic wallet, aborted transactions, and PIN resets.
Additionally, the directive prohibits surcharges on deposits, merchant payments, and bill payments where collection fees exceed certain thresholds.
Aims to Boost Financial Inclusion
The Bank of Zambia, through its Deputy Governor of Operations, Dr. Francis Chipimo, stated that the new regulations are part of a broader strategy to ensure transparency and fairness in the digital financial services sector.
“The imposition of unwarranted charges and fees not only infringes on consumer rights but also impedes progress towards greater financial inclusion, especially for underserved populations,” said Dr. Chipimo.
The directive outlines specific restrictions, including the prohibition of fees for wallet inquiries, failed transactions, and balance checks.
It also caps fees for cash withdrawals, cross-network transfers, and wallet-to-bank transfers.
For instance, cash-out fees for transactions between K5,001 and K10,000 are capped at K60, while cross-network transfers for amounts over K5,000 are limited to K50.
Support for SMEs
Recognizing the role of Micro, Small, and Medium Enterprises (MSMEs) in Zambia’s economy, the Bank of Zambia has also introduced caps on collection fees for merchants.
The collection fee on MSME transactions is capped at 1.0 percent, while charges for bill payments are limited to K5 when the collection fee is less than one percent.
Penalties for Non-compliance
Dr Chipimo states that failure to comply with the new directives will result in penalties for e-money institutions.
He warns offenders may face fines of up to 200,000 penalty units or imprisonment for up to two years, or both.
To ensure transparency, all financial service providers are required to display these directives prominently at their branches and on their digital platforms.
The Bank of Zambia’s new regulations come into effect immediately upon publication in the Government Gazette.
