Legal and regulatory aspects of mobile financial services

The thesis deals with the emergence of bank and non-bank entities that provide a range of unique transaction-based payment services broadly called Mobile Financial Services (MFS) to unbanked, underserved and underbanked persons via mobile phones. Models of MFS from Mobile Network Operators (MNOs), banks, combinations of MNOs and banks, and independent Mobile Financial Services Providers are covered. Provision by non-banks of ‘bank-type’ services via mobile phones has been termed ‘transformational banking’ versus the ‘additive banking’ services from banks. All involve the concept of ‘branchless banking’ whereby ‘cash-in/cash out’ services are provided through ‘agents.’ Funds for MFS payments may available through a Stored Value Product (SVP), particularly through a Stored Value Account SVP variant offered by MNOs where value is stored as a redeemable fiat- or mobile ‘airtime’-based Store of Value. The competitive, legal, technical and regulatory nature of non-bank versus bank MFS models is discussed, in particular the impact of banking, payments, money laundering, telecommunications, e-commerce and consumer protection laws. Whether funding mechanisms for SVPs may amount to deposit-taking such that entities could be engaged in the ‘business of banking’ is discussed. The continued use of ‘deposit’ as the traditional trigger for the ‘business of banking’ is investigated, alongside whether transaction and paymentcentric MFS rises to the ‘business of banking.’ An extensive evaluation of ‘money’ based on the Orthodox and Claim School economic theories is undertaken in relation to SVPs used in MFS, their legal associations and import, and whether they may be deemed ‘money’ in law. Consumer protection for MFS and payments generally through current statute, contract, and payment law and common law condictiones are found to be wanting. Possible regulatory arbitrage in relation to MFS in South African law is discussed. The legal and regulatory regimes in the European Union, Kenya and the United States of America are compared with South Africa. The need for a coordinated payments-specific law that has consumer protections, enables proportional risk-based licensing of new non-bank providers of MFS, and allows for a regulator for retail payments is recommended. The use of trust companies and trust accounts is recommended for protection of user funds. | viPublic, Constitutional and International LawLL. D

Negoitation in Modernity : The BAZNAS (National Zakat Collection Agency) and the Philosophy of Zakat (Alms) Socialization in Indonesia

To pay Zakat (alms) is an obligation for a Muslim. However, this religious obligation cannot encourage Muslims in Indonesia to pay Zakat. In fact, in several cities, some Zakat organizations are established to collect the zakat. Some of them is the BAZNAS which is spread in most cities in Indonesia. In fact, this organization is a semi-government because there are some collaborations between the BAZNAS and local government in most regions. This collaboration indicates also that it tries to get benefit from the modern and established government structure. This article aims to know the BAZNAS negoitation with modernity, specifically it wants to deal with the BAZNAS zakat socialization. Using a case study, this article finds that the zakat organization like the BAZNAS Kepulauan Meranti Indonesia deals with a complicated negoitation with modernity through its zakat socialization. In fact, there is a religious understanding among Muslims there that to pay zakat is an obligation but it cannot deal with their religious awareness to pay zakat. This article identifies that disseminating the zakat payment obligation is a never ending project. The BAZNAS improves Muslim understanding about Zakat through socialization. Some socialization activities done are using modern instruments but some are not. Keywords : Zakat, BAZNAS (National Zakat Collection Agency), Socialization

Covid-19: reinforcing the impact of Islamic banking through value-based intermediation

The novel Covid-19 pandemic has caused an unprecedented human crisis around the globe. The necessary actions implemented to contain the virus have sparked both economic and social downturn. It shows the fragility and unpreparedness of the economy to face such a pandemic. Significant weakening of economic conditions has escalated the pressure on households, businesses and financial markets. However, before the Covid-19 outbreak, Bank Negara Malaysia has taken a new initiative by introducing Value-Based Intermediation (VBI). VBI’s strategy opens up a new holistic layer for Islamic banks in providing the public at large with impactful and profitable services. This paper discusses VBI’s strategy and its potential application from the viewpoint of Sharīʽah. This paper also discusses Islamic banks' activities in implementing VBI as well as their response to the Covid-19 pandemic, based on qualitative inquiry. The paper concludes that VBI is a long journey that requires significant transformation of mindset among key stakeholders. As Covid-19 has adversely impacted communities in several ways, Islamic banks could empower communities through provision of financial solutions that create positive impact

Bowdoin Orient v.137, no.1-25 (2007-2008)

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