Checklist for positive regulatory frameworks for payments in developing countries

A checklist10 to promote a positive regulatory framework for
payments in developing countries is detailed below:
Legal and regulatory issues – are there well functioning
regulatory bodies that administer all participants in the
market? Are legal rights enforceable?
Clarity of regulation – to what extent are there clearly
defined regulations/guidelines regarding acceptable
identification, threshold levels and customer rights? Do
the regulations explicitly address money laundering and
terrorist financing?
Exchange rate regime – what exchange rate regime
does the country operate? How much freedom do
companies have to price the exchange rate to
customers? Are people allowed to receive and hold
foreign currency?
Reputational risk – how does the country measure up
against the international standards over money
laundering, as laid down and assessed by the FATF, IMF
etc11? Are there reputational risks for international
companies participating in this market (e.g. regarding
corruption in country)?
Importance of remittances – how important are
remittances seen in the context of the national economy
from the perspective of the Central Bank?
Barriers in sending countries – what restrictions can
prevent migrants from sending money back? Are
remittance recipients taxed on the income they receive?
Lack of a “productive” use of remittances – what
incentives are in place to leverage remittances into the
formal economy rather than the cash-based economy?
How is saving and investing encouraged rather than
consumption?
A checklist to assess the level of development of the market
is detailed below:
Technology and infrastructure – is there a well
functioning and efficient payments system in place? Is
there the technology infrastructure to encourage product
innovation and access to non-branch networks?