The Bank of the Republic of Burundi (BRB) is committed to modernizing the monitoring of payment systems and means. As technology advances, operations are carried out more quickly, facilitating the detection and correction of errors. However, challenges persist, including the low level of access to the internet, which underlines the need for appropriate regulation.
Like other central banks around the world, the Central Bank of Burundi is committed to ensuring the speed, reliability and security of payment systems. The main motivation for central banks to monitor the national payment system is to improve the security and efficiency of these systems, while reducing risks, particularly those likely to cause systemic disruption in the financial sector. This was expressed by Martin Banyiyezako, Head of the Payment Systems Monitoring Service at the BRB, during a workshop for the official launch of a new payment systems and means monitoring function that took place on Wednesday, August 31, 2024.
According to him, this system will allow the population to carry out payment exchanges while reducing the use of fiat currency. It will also help increase interbank transactions and improve the banking rate as well as the use of electronic means of payment. This new function of the Central Bank is not only intended for the Central Bank of Burundi, but is also part of a global trend of modernizing payment systems, he added.
What about the challenges to be met?
Participants in this workshop raised several challenges to overcome, including low internet speed. For this system to work effectively, high-speed internet access is required.
In response, Banyiyezako stressed that the Central Bank will work in collaboration with other institutions, such as the Telecommunications Regulatory and Control Agency (ARCT) and various telecommunications operators. He also added that this bank will maintain its cooperation with the bodies responsible for issues related to internet coverage and energy. We will work with all stakeholders, he said.
In addition, according to the concerns expressed by the participants during this workshop, one of the obstacles encountered by the Burundian population is the high cost of monetary transactions. In the vision of the payment systems of the Central Bank, it is planned to reduce the cost of financial services, indicated Mr. Banyiyezako. He reassures that there will be no exaggeration in the fixing of prices of financial services by the operators of payment systems.
Regulations adapted to payment systems
With the emergence of electronic currencies, governments and financial institutions must prepare for a long-term change in the way money works. This requires strengthening privacy laws, reforming central bank management and preparing retail banks to play a more peripheral role, according to Mr. Bigirimana, one of the presenters at this workshop on the official launch of a payment systems and means monitoring function.
For him, the payment system must guarantee a high level of security, as well as operational reliability and provide backup procedures to carry out daily operations in a timely manner. In addition, the system’s governance procedures must respect the principles of efficiency, accountability and transparency.
Ensure the protection of customer funds
The Central Bank’s main concern is the protection of customers’ funds. That is why e-money issuers must adhere to a number of principles to ensure the security of these funds, including the principle of separation of e-money issuing institutions. They must separate customers’ money from their own funds, as Mr. Banyiyezako indicated.
To ensure proper management of customer funds, accounts must be segregated within financial institutions. In addition, diversification is necessary, an electronic money issuer must not place all customer funds in a single financial institution and cannot exceed 25% of a single institution. If this rate is exceeded, it is mandatory to open another account, called a segregated account or global account in another financial institution.
It should also be noted that a portal facilitating public communication on information relating to the area of payments has been created on the Central Bank’s website and will now be available at the following address: payments and financial inclusion.
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