Shifting Branchless Banking Regulation from Enabling to Fostering Competition

Branchless banking solutions in most countries tend to be dominated by a few large players, and exhibit low levels of innovation. The paper argues that there is a need to evolve the regulatory framework for branchless banking from one that enables participation by banks and telcos to one that fosters competition by a broader range of players. Regulations on e-money issuers, retail agents and account opening need to be recast so as to reduce the cost of entry and give much more scope for service and business model innovation. In addition, there is a growing need for policymakers to ensure there is a level playing field across all players, and that mobile operators do not exploit their dominance in the mobile communications market to gain advantage in the new market for mobile financial services.