CBI Elaborates on E-Wallet Fintechs

EghtesadOnline: Ahead of the publication of the latest regulatory framework by the Central Bank of Iran for fintechs operating electronic wallets and account management facilities, the regulators’ deputy for innovative technologies has elaborated on the limitations of the fledgling businesses.

News ID: ۷۴۵۱۲۶

08 April 2018

Nasser Hakimi, who was speaking specifically about fintechs planning to offer electronic wallet services, added that they must involve a financial institution into their work.

“Fintech startups must include an authorized bank or credit institution into the cycle of their wallets, as this can be strictly done with the participation of a bank,” he told IBENA.

The official, however, quickly noted that such a thing does not mean that banks are allowed to interfere in the business of fintechs, as they will only act as an entity tasked with storing and safeguarding the money entrusted to the wallets, Financial Tribune reported.

“If this process is implemented successfully,” he said, “all the existing legal hurdles of fintechs offering electronic wallet services in Iran will be cleared and a new line of business can take shape.”

However, the official also stressed that such fintechs “must not focus on collecting deposits” because then they will step out of their legal framework and interfere with the responsibilities of banks and credit institutions.

The business of electronic wallets must only focus on obtaining fees, he added.

According to Hakimi, there is a difference of view about allowing fintechs to tap into any interests generated from people’s deposits in their wallets.

“The first view is that the generated interests do not belong to the wallet operators and are owned by the accepting banks, whereas the second view posits that whenever delays in settlements occur, the money belongs to the wallet operators,” he said.

The regulatory framework concerning fintechs offering electronic wallet and account information management services is the fourth in a series of similar documents that are meant to complete CBI’s overarching vision for fintechs and cryptocurrencies by the end of the current fiscal year in March 2019.

CBI is aiming to publish all documents after gaining extensive feedback from industry players and fintechs. The third document, which dealt with payment aggregators, was published in mid-February.