The Role of Regulators in Competition-Related Matters in Digital Financial Services

November 15, 2018
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The mobile phone has evolved from its basic telecommunications utility to take on a new enhanced role as a ubiquitous payment and value transfer instrument in the economies of developing countries. These facilities, now mostly known as Digital Financial Services (DFS), involve complex interplays of telecommunications, financial services and related components, necessitating reassessment by a range of affected national regulators on whether and how to apply or adapt their sector-specific regulatory precepts to DFS and its providers.

The purpose of this study is to provide a fresh perspective specifically on the role of regulators who have competition-related competencies over some or all of the components of DFS, for example the financial and telecommunications components. The study forms part of a series by the author on the role of the primary regulators in the DFS ecosystem, intended to systemize each of their roles.

It is evidence-based, and enumerates competition-related issues in DFS such as the use of and access to critical technologies and human components of the ecosystem from the perspective of its stakeholders such as service providers, mobile network operators, banks, and regulators. It also highlights where and how a competition authority as a national competition regulator or sector regulatory authorities such as the central bank and the national telecommunications authority may use their competition-related competencies for DFS-related matters, if such powers exist. It outlines some competition-related examples in DFS that have been identified by the author based on publicly available and ventilated examples and studies of DFS ecosystems worldwide from January 2016 to July 2018.

As this study is more evidence-based in nature, it provides just a brief outline of competition law, policy and theory and rationale for competition-related interventions, and refers readers to more detailed sources for information

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