Tuesday, March 24, 2015

Government tables bill to curb electronic fraud



Finance Minister, Saada Mkuya Salum
The government has reaffirmed commitment to end fraud in electronic payments through establishing and enforcing the best practices, regulations and supervision of efficient, effective payment, clearing and settlement systems.

 
Finance Minister, Saada Mkuya Salum said about the National Payment System Bill  which was tabled in the National Assembly for debate yesterday.
 
Minister Mkuya said that despite the fact that electronic payment system has been in place for years now, the system faces myriads of challenges which include making financial losses through transactions.
 
This is why, she said, the government felt it was important to come up with proper laws to govern and control the electronic money system.
 
She said laws aimed at mitigating various risks and enhancing efficiency and effectiveness of payments system. “Lack of laws to govern cyber crimes and electronic financial transactions placed the system into a big risk.
 
To solve this problem, the government felt it was important to formulate laws that will govern the system,” she said. She added that the new law will ensure that the payment systems will not generate high level of risks to participants and users of financial services, continue to operate without major disruptions, offer efficient, reliable and safe payment services to customers. It will as well have the necessary and regulatory legal framework.
 
Several neigbouring countries have already adopted the laws including Kenya, Rwanda, Botswana, Zambia, Zimbabwe, South Africa and Mozambique.
It was important for Tanzania to adopt the law because it will enable the country compete effectively in the financial transaction business.
 
The Bank of Tanzania (BoT) official who declined to be named admitted that financial transactions in the country have always been conducted in a high risk environment because of lack of laws, saying this is why the country badly needs the law.
 
Several MPs faulted the government’s decisions to allow the country to enter into electronic transaction system without proper laws, saying the country has suffered big losses for the past few years, while users of such services as mobile phone transaction system and ATM have also endured losses due to among other things cyber crimes, fraud and disruptions of the system.
 
THE National Payment Systems Bill 2015 was been tabled in the National Assembly yesterday under the normal procedures.
 
Some politicians – especially the opposition camp - feared that the bill would be tabled under the certificate of urgency.
 
Tabling the bill, Finance Minister, Saada Mkuya, said electronic money payments firms which will violate laws will  be liable for a penalty of  500m/- or five year jail term, against  the earlier proposed fine of 50m/-
“The new bill proposes fines for all firms providing electronic services without the approval from Bank of Tanzania,” she said.
 
Apart from commercial banks, most of electronic money services in Tanzania currently performed by mobile operators including Vodacom (M-Pesa) , Airtel (Airtel Money), MIC Ltd  (Tigo Pesa) and Zantel ( Ezy Pesa).
According to her, fines for individuals providing such services  without approval from the government will attract a fine of up to 50m/- instead of the 10m/-.
 
She said the said fines were proposed in order to protect rights of consumers.
 
Mkuya said once enacted, the Bill will help improve national payments system which nowadays has undergone advanced technological changes.
She said Tanzania also want to join some African countries in the use of national payment system in order to face various challenges in the industry.
 
The National Payment System involves all major payment systems users, owners, providers, and managers of the national payment systems defined as stakeholders who wish to improve the country’s payment systems. 
 
They include banks and financial institutions, government, Capital and Securities Market Authority, the stock exchange, telecommunication providers.
 
 The main objectives of national payment system include minimising payment, clearing and settlement risks and achieving reliable, secure, convenient, cost effective, universal and integrated systems to meet the needs of the economy. 
 
However Members of Parliament expressed their concern over an increasing electronic theft done by commercial banks and mobile phone companies.
“We have noted overwhelming theft in commercial banks, the government should improve fines to the concerned parties, said Ilala Legislator,” Musa Zungu (CCM).
 
Zangu also urged the government to come out with alternative solutions in case the electronic payment system collapsed.
“We have to make sure that the alternative solution is in place when it collapses or invaded by hackers so as to make our move forward,” he suggested.
 
For his part, the Kisarawe Legislator, Selemani Jaffo (CCM)  asked the government to make sure it fast tracks the  implementation of regulations on national payments system act for the socio-economic development of a nation.
 
Speaking, the Special Seats Legislator, Christowaja Mtinda (Chadema) , said the proposed bill should enable consumers to prosecute commercial banks  which violate  law.
 
For his part, Mkanyageni Legislator, Habib Mnyaa (CUF) said, there is a need to make sure that the rights of consumers are protected in the proposed bill.
 
“I have gone through this bill, only four sections have mentioned rights of consumers while 56 sections just mention management, collection of taxes or control of companies,” he said. 
 
Reading recommendations, on behalf of official opposition camp, Christina Lissu Mughwai, said lack of legislation to protect consumers against electronic money payments have affected many people.
 
In a news conference in Dar es Salaam on Sunday, Chadema’s Director of Information and Publicity, John Mnyika, said his party has already started communicating with opposition parties forming the Coalition of People's Constitution (Ukawa) object the tabling of Access to Information, Media Services, National Payment Systems Bill and Computer & Cyber Crimes bills under the certificate of urgency.

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