Presentation at Prepaid Summit Asia 2011, Mumbai India, focuses on financial regulatory issues for prepaid payment instruments with examples from Asia, Asia Pacific and Australia

1. Emerging
Themes in Asian
Prepaid
Regulation
Prepaid Summit Asia 2011
Mumbai, Dec 2011
Louise Malady

2. Overview
 Prepaid regulatory issues in Asia
 Examples of different approaches to
regulation (regulator and industry)
 Emerging themes

3. Asia – Regulatory Focus
Frontier/ Emerging Developing Developed
 Personal  Channelling  Innovation
Safety remittance  Competition
 Financial flows
Inclusion –  Legitimate, saf
Savings e and cost
effective
PNG Philippines Australia,
Singapore

4. Common Concern
 Whatto do when non-banks are
proposing to be the issuers of the prepaid
value?
 Regulatory response will depend on local
context

5. Regulations Influence…
 How business models are structured
 How agents are used in your model
 How customers are able to register for
accounts
 How customers can do cash-in and cash-
out transactions

6. Regulatory Focus
Safety Efficiency
 Issuance and  Interoperability
Management of the
Float  Competition
 Operational/Security
Risks
 AML/CFT and KYC
 Agents
 Consumer Protection

7. Balance
 Investment in security by issuers
 Mitigation of risk - money laundering,
terrorist financing and fraud

8. AML/CFT and KYC
 Financial Action Task Force (FATF)
 Tiered KYC (Philippines, Singapore)
 Financial
and Telco Regulators - is there
communication between the two
regulators? (Fiji)

9. Agency Arrangements
 What can non-banks do? Cash-in and
cash-out?(Cambodia / Malaysia)
 Liability of banks and non-banks – is it the
same? (Philippines / Kenya)
 Liquidity and credit risk – mitigate through
improved clearing and settlement
arrangements (Philippines)
 Consumer protection and role of agents
(Philippines)

10. Consumer Protection
 Disclosurerequirements
 Redress mechanisms
 Clear identification of users for KYC
 Consumer education
(examples – Philippines and Australia)

11. Regulatory Focus - Efficiency
 Interoperability
 Competition
 Examples – Australia, Singapore, PNG

12. Industry Approaches
 Involve financial regulator early
(Philippines, Indonesia)
 Encourage cooperation with regulator
(Cambodia)
 Encourage cooperation among industry
players in working with regulator (Philippines)
 Seek beneficial partnership solutions(China)

13. Emerging Themes
 Prepaid used as savings mechanism
 Interoperability
 Regulatory proportionality

14. Thank You
louise.malady@yahoo.com