If it quacks like a duck: Kganyago on regulating fintechs
- Reserve Bank governor Lesetja Kganyago announced the forthcoming National Payment System Bill at the MTN Group Fintech Summit.
- The new regulatory framework will shift from an entity-based model to an activity-based model for payment activities.
- Fintechs in South Africa currently need to partner with licensed banks to operate, but the Reserve Bank is working on a local mobile money license.
The initiative to regulate the fintech sector more rigorously is a positive step towards ensuring consumer protection and fostering innovation. However, the challenge will be balancing regulation with the need for flexibility that fintechs require to thrive. Engaging stakeholders during the public comment phase will be crucial for developing a robust framework that supports growth while mitigating risks.
