Since 2013, FSVC has been working with regulatory authorities, financial institutions, and non-bank financial institutions to promote the introduction of mobile payments in Albania.
Approximately 62 percent of Albanians over 15 years old are still unbanked, and virtually excluded from the formal financial system. The estimates are even lower for women and those belonging to the poorest 40 percent, with more than 64 percent of women, and 77 percent of the poor being unbanked.[1] Lack of access to any kind of financial services, excludes these vulnerable groups from opportunities for economic and social advancement as well. Having a bank account or mobile wallet, is the first step to formal inclusion into the financial system. Through the introduction of mobile money payment schemes FSVC aims at inducing competition and innovation in the financial system, leading to a reduction of financial service costs for customers and better overall access to financial services. Mobile payments will provide an efficient payment means to Albanian citizens, vastly improving their experience in paying for small recurring obligations. The new technology will also help improve the country’s public finances, as it will improve the collection of utility, tax and municipal obligations.
Program Impact
- Drafting electronic payments regulation
FSVC’s assistance has helped BoA make key regulatory changes to accommodate the introduction of innovative, market-driven payment technologies that support financial inclusion in Albania. Prior to FSVC assistance, BoA had a weak regulatory framework for electronic payment instruments. After arranging a study tour, consultations and workshops with FSVC volunteer experts, BoA drafted amendments to its licensing and supervision regulations of non-bank financial institutions (NBFI). These reforms have paved the way for the introduction of electronic payment services in Albania. In April 2015, Vodafone M-PESA received a license, becoming the first NBFI to offer mobile payment services.
- Developing stakeholder consensus for an inclusive mobile payments platform
Through activities such as a financial inclusion study, roundtable discussions and consultations with BoA staff, banks and NBFIs, FSVC succeeded in building consensus for an inclusive mobile payments system that is open to all stakeholders. To support the development of mobile payments, BoA has assured stakeholders of a fair and prompt licensing process if they are interested in applying for a mobile payments license. Market players who were once opposed to mobile payments have developed a better understanding of the business opportunities that mobile payments offer and are now better positioned to undertake informed steps to take advantage of them. Most notably, the Albanian Post Office has committed to building and launching an inclusive mobile payments platform that will build off its established brick and mortar network, but be open to all interested mobile network operators (MNOs), banks and other stakeholders. Wide ranging stakeholder support and government commitment to the creation of a mobile payments platform means that now unbanked Albanians, who constitute the majority of adults will have access to financial services.