Published by: GSM Association

MFS by Mexican MTOs – Still on Hold

Since early last year, Mexico’s supervisory Comisión Nacional Bancaria y de Valores (National Banking and Securities Commission or CNBV) has been preparing a new e-money regulation behind closed doors. Whispers abounded throughout 2009, and it was strongly hinted that this regulation would finally open the mobile payment world to non-banks. Although a further regulation has now seen the light – as of the 4th of February of this year – it falls short of what MFS champions have awaited. The new regulation facilitates mobile payments and internet banking by credit institutions, which is a welcome development, but it does not widen the non-bank role in regards to e-money issuance, as was anticipated.

The resolution in specific has loosened consent requirements for credit institutions in the offering of mobile payment, ATM and POS terminal services (such as prepaid cards) and internet banking. Rather than requiring explicit consent by signature (an impossibility in situations where customers are remote), users may consent to the procurement of additional services and operations through a second form of electronic authentication once they have started the relevant electronic session or, for mobile payment, through call centres. In order for credit institutions to avail themselves of these loosened requirements in regards to mobile payments specifically, they must establish controls to prevent the association of more than one mobile phone line to the account of a user, and of one number of a mobile phone line to several users. In all cases the credit institutions are required to obtain contact information such as an email address or mobile phone number for transmission of legal notifications. The regulation also sets out requirements to facilitate internet banking transactions between different credit institutions where the user is the owner of accounts in both institutions.

The issuance of the regulation was delayed in part due to concerns as to potential unfair competition concerning the future provision of e-money by mobile network operators, given Telcel’s dominant position of the Mexican mobile telephony market, with 85% market share1. These concerns may ultimately be the reason why the current regulation did not, in fact, extend mobile payments to non-banks such as MTOs. It is too bad that the CNBV did not grab the bull by its horns on this issue and take a stand on mobile payments that would finally open up the industry to additional players that would greatly add value to Mexican consumers.

1 Notes on Branchless Banking Policy and Regulation in Mexico, CGAP, March 2009