CBE reviews efforts to support e-payment, FinTech systems

Hossam Mounir
10 Min Read
It is expected that the MPC would make a decision to fix interest rates in the CBE, as it did before in February, April and June; says General Director of Treasury at the Industrial Development and Workers Bank of Egypt AFP Photo

The Central Bank of Egypt (CBE) has reviewed its measures to support electronic payment system and financial technology (FinTech) in the past period.

In its quarterly magazine Economic Review, the CBE says the electronic payment sector have witnessed many developments recently, the most important of which are the launch of the national payment system “Meeza”, the Non-Cash Payment Law, the FinTech Regulatory Sandbox, and the e-collection of government’s payments.

Law no. 18 of 2019 for regulation of non-cash payment methods

The law supports the state’s digital transformation efforts to achieve financial inclusion. It aims to establish a regulatory framework for non-cash payments, and it is binding for both public and private sectors.

The law also aims to make it easier for citizens to pay for services and products, and to transfer money efficiently and effectively.

The law was approved by the House of Representatives on 11 March 2019, and was ratified by President Abdel Fattah Al-Sisi. It was published in the official newspaper on 16 April 2019.

The draft executive regulations for the law has also been completed, and its reviewal is currently under way.

Insurance on electronic transactions against cybersecurity threats

Within the framework of joint cooperation between the CBE and the Financial Regulatory Authority (FRA), insurance policy forms have been prepared against cybersecurity threats to meet the needs of the banking sector.

The FRA has reviewed and approved those forms for use by banks that wish to insure their electronic transactions against cybersecurity threats.

A directory for insurance on electronic transactions against cybersecurity threats has also been prepared to be used when a bank or financial institution contracts an insurance company for this purpose.

E-collection of government’s payments

The project aims to automate the collection of government payments through points of sale (POS) or websites through the Shared Cash Network “123” of the Egyptian Banks Company (EBA).

It enhances the state’s efforts to limit cash payment methods at government agencies. It comes through cooperation between the CBE, the Ministry of Finance, and the Ministry of Planning. A total 15,300 POSs have been installed in government facilities in the first phase of the project.

National payment card “Meeza”

The project aims to create and manage a national payment card system through the National Payment Scheme (NPS) for payment cards, POSs, and ATMs.

The EBA is responsible for managing this system, which would contribute to achieving financial inclusion by reducing charges and expenses related to banking operations through electronic cards. A total 4m cards have been issued up so far.

A section about FinTech and e-payments added to banking draft law

The banking draft law aims to entitle the CBE to properly monitor all bodies that manage payments systems and services. 

The law also aims to set regulatory measures and controls to monitor payment services in all their forms. Moreover, it would support FinTech solutions.

Establishing central depository and registration system

The project aims to automate all registration and deposit operations for government securities and the relevant settlement and clearing operations. It also seeks to activate the secondary market with best international practices and standards. Additionally, it would raise the efficiency and integrity of transactions for government securities.

The first phase of establishing a system of central securities depository for government-issued securities (CSD) and a collateral management system (CMS) have been launched.

Moreover, the second phase of the electronic trading platform (ETP) for government securities are currently being implemented, especially for treasury bonds.

Launching multi-currency instant payment settlement system

The project aims to include transactions in foreign currency (US dollar) within Egyptian banks in the instant payment settlement system to save time and cost of settling payments. It is expected to be launched this year.

“Know your customer” project

The project aims to facilitate opening bank accounts electronically without the need for customers to go to banks, which would contribute to achieving financial inclusion.

The possibility of using the blockchain technology in the project, which is intended to be launched this year, is currently under study.

Developing core banking and ERP 

The project aims to develop banking software and applications, such as enterprise resource planning (ERP) and core banking.

The prospectus was prepared in cooperation with an international consulting office. The project is expected to be completed in the first half of 2022.

Developing banking supervision and monitoring programmes

The project aims to develop banking supervision and monitoring programmes to allow clients to send complaints.

The prospectus of the project is being finalised, pending determining the requirements with other sectors.

Developing programme to inquire about the deceased

The programme receives inquiry requests about banking accounts of the deceased through the Data Hub. It was completed in the second quarter of 2019.

Establishing a computer emergency response centre for banking sector

The project aims to establish a centre that provides computer emergency handling services, analysis of cyber evidence, penetration testing, and vulnerabilities detection, enhancing the readiness of information security methods and spreading awareness about the latest technologies for the banking sector. It is expected to be launched this year.

Training 100 cybersecurity specialists in banking sector

The project includes a training programme to provide 100 cybersecurity specialists in the banking sector over two years, according to the latest technologies. The training programme is to provide them with exceptional skills and practical experience.

About 50 banking employees have been graduated from the programme and the necessary measures were taken to arrange the last training course for the Computer Emergency Response workforce for the banking sector. The same courses will be arranged again to train more bank cadres.

FinTech strategy

The CBE’s FinTech strategy is based on the integration between Egypt 2030 vision and the CBE’s vision to meet the needs and aspirations of the Egyptian market.

The strategy also aims to turn Egypt into a leading centre for FinTech in Africa and the Arab world.

This strategy deals with a number of basic axes, most importantly, meeting the demand for FinTech services. Another axis is related to the development and utilisation of talents and innovative capabilities. It’s also related to increasing the funding of FinTech projects. It also strengthens the regulatory rules that stimulate the technology industry. The strategy was announced in March 2019, and its implementation is currently being pursued.

FinTech Regulatory Sandbox

It enables financial institutions and FinTech players to experiment with innovative financial products or services in a live environment but within a well-defined space and duration, limiting the risks associated with such applications to ensure customer protection.

The sandbox includes appropriate safeguards to contain the consequences of failure and maintain the overall safety and soundness of the financial system. It started trial operation on the first batch in July 2019.

FinTech Hub

It is a unified platform – launched by the CBE in cooperation with the private sector – driven by innovation and technology to foster and connect all FinTech eco-system stakeholders, including Fintech startups, financial institutions, regulators, service providers, accelerators, business incubators, global technology companies, mentors, and investors.

FinTech Hub’s headquarters will be the heritage building of the CBE in the heart of downtown Cairo.

FinTech Egypt platform

The FinTech Egypt is an online platform for the financial technology system in Egypt. It aims to facilitate linking financial technology parties, whether locally or globally. This platform can be accessed through https://fintech-egypt.com.

Fintech Innovation fund

The fund operates as a new investment platform with a value of EGP 1bn to mobilise financial investments in favour of investment funds, incubators, and business accelerators. It focuses on startups in the sectors of technology in general and FinTech in particular.

CBE Workforce Digital Transformation

The project aims to improve the performance, effectiveness, and productivity of the bank’s employees by providing the latest world technologies and applications.

Updating the rules governing internet banking services

The project aims to update the rules for internet banking services that were issued in November 2014 to keep pace with technological changes and raise quality and safety offered.

The rules regulating mobile banking services will be included as part of this edition. It is planned to be launched this year.

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