Sei sulla pagina 1di 3


June 2016


The National Payment

In this months finance briefing we focus on the
national payment system in Tanzania. Legislation
was introduced in 2015 to regulate payment system
A payment system
In its simplest form, a payment system in Tanzania is a facility that ensures
circulation of money. This includes payment instruments, banking and money
transfer procedures, and interbank fund transfers.

Legislation in Tanzania
Payment Systems in Tanzania are regulated by the following legislation:

The National Payment System Act, 2015 (The Act);


Payment Systems (Licensing and Approval) Regulations, 2015 (The

Licensing Regulations); and


Payment System (Electronic Money) Regulations, 2015 (Electronic Money


The Act
The Act provides the legal framework for payment systems to operate in
Tanzania. The Act is an all-encompassing law for licensing, compliance,
enforcement, and matters of liability for breach of the law. It allows companies,
other than banks and financial institutions, to operate payment systems in
Tanzania by obtaining a licence from the Bank of Tanzania (the BoT).
Banks and financial institutions that operate payment systems by virtue of
their banking business are required to simply obtain approval from the BoT to
issue and operate electronic or written instruments for ordering transmission or
payment of money (i.e. payment instruments).
Similarly, in order to be able to issue money that is stored electronically in
an instrument or device, the Act requires non-banks or financial institutions
licensed as payment system providers to obtain an electronic money issuer
Additional requirements are imposed on non-bank or financial institutions that
offer payment system services. The Act requires non-bank/financial institutions
applying for the licence to issue electronic money to set up a separate legal entity
(in form of a trust) for issuance of electronic money; and in order to be able to
issue electronic money, a trust account to be maintained by the trust entity must
be opened for management of customers money.

Regulatory framework
The BoT regulates national payment systems in Tanzania. It is vested with the
power to grant or refuse the prescribed licences, approvals, and basically has the
mandate to regulate, supervise, investigate and oversee operations of payment
systems in Tanzania.

It is important to note that in its supervisory role, the BoT works closely with
other regulators and Government agencies in order to implement the provisions
of the Act and its regulations.

Licences and Licensing requirements

By way of summary, the following are the licences issued in respect to payment

Payment system licence;


Payment instrument licence; and


Electronic money issuer licence.

Before the Act came into operation, banks and financial institutions and other
private companies obtained approval from BoT to operate payment systems and
issue payment instruments and electronic money pursuant to circulars and
guidelines produced by the BoT.
When the Act came into force in 2015 it required these banks/financial
institutions and non-bank/financial entities operating payment systems to
comply with the Act by applying for the prescribed licences and seeking approval
where applicable within six months.
The timeframe provided by the Act for compliance has long expired since
December 2015, however the BoT through a public notice issued by the Governor
on 17 March 2016 has extended the timeframe for compliance to 1 July 2016.
Thismeans potential applicants are required to comply with the Act before
1 July 2016.

Requirements for applying for a licence

Payment system licence

Establish a trust entity separate from the common business;


Obtain network services or application services licence from Tanzania

Communications Regulatory Authority (TCRA);


Fill in the application form (Form A);


Attach the accompanying documents prescribed under regulation 6

ofthe Licensing Regulations;


Pay for the application fee.

Payment instrument licence


Fill in the application form (Form F);


Attach the supporting documents prescribed under regulation 30 (2)

ofthe Licensing Regulations;


Banks and financial institutions that simply require BoTs approval in

order to issue payment instruments are required to fill in Form E only
and provide the supporting documents prescribed (Regulation 22 (2)
ofthe Licensing Regulations).

Electronic money issuer licence


Fill in the application form (Form C);


Attach the accompanying documents prescribed under Regulation 13

of the Electronic Money Regulations.

The key stakeholders in the payment system industry are the BoT (as the
regulator and monetary authority in Tanzania) and banks and financial
Other stakeholders include infrastructure providers (e.g. telecommunication
companies), payment system providers (e.g. swift or card operators), payment
system end-users (individuals, corporate businesses and Government of
Tanzania), regulatory authorities (e.g. TCRA), Regional monetary authorities
(e.g. East African Community) and international monetary authorities.

Other applicable/relevant laws

The coming into force of the Act makes other legislation applicable to payment
system operations and services in Tanzania.
The Electronic and Postal Communications Act, 2010 and the Tanzania
Communications Regulatory Authority Act, 2003 together with their relevant
subsidiary legislation are applicable. The reason is that, the applicant for a
payment system licence is required to have a network services or application
services licence granted under the above mentioned legislation.

Further information

Other relevant legislation include the Electronic Transactions Act, 2015; the
Cybercrimes Act, 2015; the Companies Act, 2002; the Anti-money Laundering
Act, 2006; and the Prevention of Terrorism Act, 2002.

If you would like further information

about carrying out a Security Review
or, if you have any other queries
about security relating to finance
transactions please feel free to contact:


Peter Kasanda

Before appointing an agent, payment system providers are required to submit

documentation to the BoT for review (regulation 38 of the Electronic Money

Partner, Dar es Salaam

T: +255 767 850 054

Michaela Marandu
Senior Associate, Dar es Salaam
T: +255 767 850 094

Clyde & Co Tanzania

11th Floor, Golden Jubilee Towers
Ohio Street, PO Box 80512
Dar es Salaam, Tanzania
T: +255 768 983 000/022
F: +255 222 103 004
Further advice should be taken before relying on
the contents of this summary.
Clyde & Co Tanzania accepts no responsibility
for loss occasioned to any person acting or
refraining from acting as a result of material
contained in this summary.
No part of this summary may be used,
reproduced, stored in a retrieval system or
transmitted in any form or by any means,
electronic, mechanical, photocopying, reading
or otherwise without the prior permission of
Clyde & Co Tanzania.
Clyde & Co LLP is a limited liability partnership
registered in England and Wales. Authorised and
regulated by the Solicitors Regulation Authority.
Clyde & Co LLP 2016
CC010460 - June 2016

The Act envisages that payment system providers can provide their services
through agents. However the Act requires non-exclusive use of these agents.
It also requires payment system providers to set up consumer protection

It should be noted however, that payment system providers remain liable to their
customers for any act or omission committed by their agents within the scope
ofthe agency arrangement/agreement.
Clyde & Co Tanzania has experience advising clients (i.e. banks/financial
institutions and non-banks/financial institutions) on payment systems,
specifically licensing and regulatory requirements.