With the emergence of mobile operators offering mCommerce solutions and other operators implicitly entering the banking business, the line between the criteria used for telecom regulation and banking regulation is becoming increasingly blurred. For example, a pre-paid account that is used for subsequent payments to multiple vendors could be construed as a conventional checking account. If a post-paid customer is allowed to make payments for services other than telecom, it amounts to the mobile operator extending credit to the customer.
In some countries mobile operators have begun to offer m-payments in collaboration with banks, carefully demarcating the boundaries between functions subject to banking and telecom regulation. For example, Dialog Telecom Ltd., Sri Lanka’s leading mobile operator and National Development Bank of Sri Lanka, have launched an mCommerce solution called eZ Pay; this solution is similar to a merchant accepting Visa or MasterCard credit/ debit cards for payments. In other cases, it appears that the mobile operators are implicitly entering the banking business.
The interface between the two forms of regulation, first flagged in the literature by former Dutch regulator Professor Jens Arnbak, needs to be explored and creative solutions evolved of the public interest is to be served. The research will identify the pros and cons of different regulatory regimes that are emerging in different contexts. Based on this analysis, policy recommendations for innovation-friendly regulatory arrangements will be developed.
This research was conducted by Erwin Alampay (PhD) in 2009/10.
Citation for the above report should be done as: Author Last Name, First Name Initial, (2010), Report Name, Retrieved Date, URL of document on LIRNEasia website.
The policy brief is available here.