CHAPTER 437 THE NATIONAL PAYMENT SYSTEMS ACT [PRINCIPAL LEGISLATION] . Arrangement of Sections AG O n o f Section Title siois rm pe part i uto PRELIMINARY PROVISIONS th d w i 1. Short title. bu te 2. Application. i ist r 3. Interpretation. r d d o ce part ii u rod POWERS AND FUNCTIONS OF TreH p E BANK e 4. Powers and functions of Bank. b may k part b ioi oi PAYME is NthT SYSTEM f 5. Prohibition to operate paymenat rst yostem. 6. Eligibility for licensing paymoe pN nt system. 7. Application for payment ds.y e stem licence. 8. Renewal of payment esryvstem licence. 9. Suspension of pasy mr es t ent system licence. 10. Revocation o h rfi gpayment system licence. 11. Publicatio ll . nA of notice of revocation. 12. Prohibaintiiaon of undesired conduct. 13. Ceassnaztion to hold office. 14. oOf T t ffences under this Part. n rnm e e part iv ovG PAYMENT INSTRUMENTS 5 20 2 15. Prohibition to issue payment instruments without licence or approval. © 16. Eligibility of payment instrument. 17. Application for payment instrument licence or approval. 18. Suspension of licence or approval. 19. Revocation of licence or approval. 20. Offences under this Part. 253 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] part v ELECTRONIC CHEQUES 21. Cheque presentment. 22. Electronic cheque presentment. 23. Admissibility of electronic image of cheques as evidence. AG. f O part vi o on ELECTRONIC MONEY sis rm i 24. Prohibition to issue electronic money without licence or approval. pet 25. Electronic money issuer eligibility requirements. u tho 26. Application for electronic money issuance licence or approval. i d w 27. Renewal of electronic money issuance licence or approval. ute 28. Suspension of licence or approval to issue electronic money. str ib i 29. Revocation of electronic money issuer licence or approval. d or 30. Electronic money issuance and circulation. ce d u 31. Offences under this Part. rod e r ep part vii y b TRUST ACCOUNT AND SPECI Am aL BANK ACCOUNT ok 32. Trust account. bos 33. Special bank account. f th i 34. Trust account management. art o 35. Special bank account managoe mp ent. d. N e erv part viii FINALITY O Fre sPAYMENT AND NETTING ARRANGEMENTS hts36. Validity and eringforceability of finality of payments and settlement. 37. Validity a ll .n Ad enforceability of netting arrangements. an ia an z part ix of TWINDING-UP, RECEIVERSHIP OR JUDICIAL MANAGEMENT t en OF PARTICIPANTS IN A PAYMENT SYSTEM rnm ve 38. Winding-up notice. o G 39. Liquidator, statutory manager bound by payment system instruction. 5 02 40. Priority of payment instructions in winding-up. ©2 part x COLLATERAL AND FAILURE TO SETTLE ARRANGEMENTS 41. Collateral arrangement. 42. Failure to settle arrangements. 254 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] part xi GENERAL PROVISIONS 43. Submission of returns. 44. Access to information. 45. Confidentiality. AG. 46. Retention of payment system records. f Oo 47. Electronic money withdrawal levy. n io 48. Protection of customer information. miss 49. Time to effect transfer of funds to customer’s account. r t p e 50. Investigations, inspections, supervision and oversight. ouh 51. Compounding of offences. it d w 52. Consumer protection in payment system. ute 53. Availability of payment system services. tribis 54. Cybercrimes in payment systems. r d o 55. Cooperation between regulators in payment systems. d ce 56. Immunity. duro 57. Regulations, directives and circulars. re p 58. Transitional provisions. bey m a part x k oioi CONSEQUENTIhA b t isL AMENDMENTS f 59–61. Omitted. rt o o p a . N ed erv re s ts l ri gh Al nia . nz a Ta t o f men rn ov e 5 G 02 ©2 255 CHAPTER 437 THE NATIONAL PAYMENT SYSTEMS ACT . An Act to make provisions for the regulation and supervision of payment OAG systems, regulation of electronic payment instruments, electronic n o f money, payment system service providers, validity and enforceability io isosf netting arrangements, finality and settlement of payment instrucetirmons p and to make provisions for related matters. t ou [1st O wctitohber, 2015] [GN.u Nteod . 506 of 2015] Acts Nos. rib 4 of 2015 istd 3 of 2021 d o r 5 of 2022 e 7 of 2023 uc pro d e e r y b Pk Am aRT I o PRELIM bo iIs NARY PROVISIONS f tho Short title 1. This Act may b rt pea cited as the National Payment Systems Act. Application 2. This Act shal o . lN apply to Mainland Tanzania as well as Tanzania Zanzibar. d erv e Interpretation 3. In thi sre A s ct, unless the context otherwise requires- “banikgh” t shas the meaning ascribed to it under the Banking r Cap. 342 ll . Aand Financial Institutions Act; an“ iaBank” means the Bank of Tanzania; nz Ta “body corporate” means a bank, financial institution or any f t o other public or private company; en nm “clearing house” means a central location or central er ov processing mechanism through which financial 25 G institutions agree to exchange payment instructions or 0 ©2 other financial obligations; “clearing” means exchange of payment instruments that involve transmitting, reconciling and confirming payment orders or transfer instructions prior to settlement, including the netting of instructions and the establishment of final positions for settlement; 256 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] “consumer” means a user of electronic payment services provided by a payment system provider; “electronic fund transfer” means transfer of money through an electronic terminal or device from one account to . another; OAG “electronic money issuer” means a payment system provider n o f that is licensed to issue electronic money and assumessiois responsibilities and liabilities for the electronic mpeo rmney issued; t ou “electronic money” means monetary value as reprwei sthented by d a claim on its issuer, that is electronicallbyu testored in an instrument or device, issued against redcise triipt of funds of an amount not lesser in value than dt oh r e monetary value issued, accepted as means of pdayceu ment by persons or entities other than the issuer anedp r ocan be redeemed in cash; “electronic payment service” r bemeans a payment service delivered in electronic fo rmaym by a licensed payment service provider in accordancboe o kwith this Act; “final settlement” me is athns the discharge of an obligation by a transfer of fundrst ow f hich is irrevocable and unconditional; “financial instituo tpi aon” has the meaning ascribed to it under the Bankin.g NCap. 342 ed and Financial Institutions Act; “informatieorvs n” means any data, record, return or document in atsn r e h y form or manner whether oral, written, in any v ig ll irsual recording, sound recording, electronic, magnetic, a. A i mechanical, computer records or other recording on any n nz a substance, material, thing or article; Ta of “netting” means determination of the net payment or net nt e settlement obligations between two or more parties in a ern m clearing or settlement system; Gov “netting arrangement” means an arrangement in writing to 02 5 2 convert several claims or obligations into one net claim or © one net obligation to be discharged by a party or parties in the clearing or settlement system; “payment instrument” means an instrument in electronic or written form used for ordering transmission or payment of money; 257 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] “payment system” means a facility consisting of payment instruments, banking and transfer of money procedures, interbank funds transfer systems or payment system provider’s systems that ensure the circulation of money; . “payment system participant” means a body corporate, AG O acting alone or under an arrangement with another body n o f corporate to provide electronic payment service licensiessd io under this Act; ermp “payment system provider” means a body corporautt o e that provides electronic payment service licen swei tdh under d this Act; te trib u “payment system provider agent” means dais sole proprietor or a body corporate that has been d coo r ntracted through an agency agreement for a paym ce deunt system provider to perform the functions of selleinp rgo electronic money and redeeming cash equivalent o bfe rthe electronic money; “settlement” means an act m atyhat discharges obligations in respect of funds or bsoe ockurities transfer between two or more parties; and his t “systemically impo f rtr otant payment system” means a payment system that h paao s a significant impact on the economy which is ceadp . Nable of triggering or transmitting disruptions amongssetr v payment system participants or to the economy e if ith tiss r not sufficiently protected against risk. ll r ig A ia. PART II anz an POWERS AND FUNCTIONS OF THE BANK of T t Powemrse annd 4.–(1) Without prejudice to any other written laws, the Bank fuenrcntions of oBvank shall- 5 G (a) grant a licence and approval in accordance with this 02 ©2 Act; (b) regulate, supervise, investigate and oversee the operations of payment systems; (c) provide settlement services to payment systems; (d) provide settlement services to a clearing-house and a central securities depository; 258 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (e) own and operate a real-time gross settlement system; (f) co-ordinate payment systems activities with relevant stakeholders; (g) participate in inter-bank clearing and settlement . operations; and G OA (h) be responsible for the administration of this Act. of n (2) For purposes of this section, the term “central securitiisess io depository” means a facility or an institution for hopled rming securities, which enables securities transactions to be pr t oou cessed by book entry in electronic form. ith d w ute PART III ist rib d PAYMENT SYSTE or eMd du c o Prohibition to 5. A person shall not operate a r reppayment system without a operate payment system payment system licence issued yb by e the Bank in accordance with this Act. ma k bo o Eligibility for 6.–(1) A payment syst ethm is that may be eligible to be licensed by licensing payment system the Bank shall have f r ta ony of the following objects: (a) clearing oo fp apayment instructions between financial and non-fi . N ednancial institutions; (b) settelrs ivng of obligations arising from the clearing of e htsp rayment instructions; (c ri)gll transfer of funds from one account to another using ia. A any electronic device; za n n (d) transfer of electronic money from one electronic device a of T to the other; t en (e) provision of technological services to facilitate ern m switching, routing, clearing, data management for or Gov on behalf of a payment system provider; 02 5 2 (f) facilitation of interoperability of payment systems © and services between payment systems providers and consumers; (g) provision of electronic payment services to the unbanked and under-banked population; 259 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (h) establishing a payment clearing house; (i) provision of financial communication network; or (j) any other objects as may be prescribed by the Bank. (2) For purposes of this section, the term “interoperability” . means a seamless transfer of payment instructions or funds AG O from an account of one payment system provider or user of n to another payment system provider’s or user’s account ofis sa io different service provider. pe rm ou t Application for 7.–(1) A body corporate which intends to operate ait hpayment payment system w licence system shall apply in a prescribed form for a pauytem d ent system licence. tribis (2) An application made under subs oer cdtion (1) shall be accompanied by such information asu cme day be prescribed by the Bank. pro d (3) The Bank may grant a licee rn e b ce when it is satisfied that the applicant has met the liceaym n sing criteria stipulated under this Act including paymekn oo t of licence fee and any other requirement specified bys bhi the Bank. t (4) Within thirt ryt o fdays following receipt of an application or where further a o pinformation has been required, after receipt of such informN d. ation, the Bank may either grant or reject the applicatiosne.r ve (5) Thts r ee Bank may, where it grants a licence, impose such terml risg hand conditions as it may deem appropriate. l ia. A(6) A licence shall be valid for a period of five years unless it za nis otherwise suspended or revoked. n f T a (7) Where an application is rejected, the Bank shall give t o en reasons for the rejection. rnme (8) Subject to subsection (7), an applicant whose application ov G is rejected may reapply if the deficiencies that formed the basis 250 for rejection of the initial application have been rectified, and ©2 the Bank may either grant or reject the re-application. (9) An applicant who is aggrieved by the decision made under this section may apply to the Governor of the Bank within thirty days after receipt of such notice of rejection for review of the decision. 260 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] Renewal of 8.–(1) The holder of a licence granted under this Part may, payment system licence within six months before the expiration of such licence, apply to the Bank for renewal. (2) On receipt of an application under subsection (1), the . Bank may renew the licence upon- G OA (a) payment of renewal fee; and of n (b) fulfilment of such terms and conditions applicable f io miossr grant of licence. erp (3) The Bank may refuse to renew a licence if it is osua t tisfied that the applicant has failed to comply with the it wcohnditions d contained in the previous licence. te trib u is Suspension of 9.–(1) The Bank may suspend a payment sy osr tdem licence where- payment system licence (a) it is satisfied that a payment systceedu m provider has failed to meet communication inpfrro dastructure requirements prescribed by the Bank; e be r (b) it is satisfied that the ya ma ffairs of the payment system provider are bein k ogo conducted in a manner that is detrimental to hist hbe interests of its payment system t participantsr o or f t users; or (c) the paymo epn a t system provider is directed to suspend serviced.s N under any other written law. (2) Subsejer vcet to subsection (1), the Bank may call upon a licensetes rt eo show cause why the licence shall not be suspended. (l3 h ri)g Where the licensee fails to show cause to the satisfaction l oaf. i Athe Bank, the Bank may suspend the licence or make any za nother order as it may deem appropriate. Tan f Revocatinotn o of 10.–(1) The Bank may revoke a licence of a payment system paymmenet system licernnce provider where- veo (a) any other licence related to payment systems is revoked 5 G 02 under any other written law; ©2 (b) the provider voluntarily requests revocation; (c) the provider provides false or misleading information when applying for a licence; 261 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (d) the provider fails to comply with the terms and conditions of the licence or any remedial measures required under this Act; (e) the provider engages in a pattern of unsafe or unsound . practices that threaten its financial condition or is G OA detrimental to the interests of the payment system n o f providers or users; siois (f) the provider refuses to permit an inspection or prpoev rmide information required by the Bank or is otheoruw t ise in breach of provisions of this Act; ith d w (g) the provider ceases to do payment sybsut teems business in the United Republic; i dis tr (h) the provider is insolvent as determd oi rn ed by the Bank or court; or e uc (i) the provider fails to compplr d e yo with any requirements under this Act. e r b (2) Subject to subsection m( a1y), the Bank may issue a seven days notice calling upon ok bo a licensee to show cause why the licence should not be r theisvoked. (3) Where the licrte on f see fails to show cause to the satisfaction of the Bank, theo pB a ank may revoke the licence or make any other order asd .i N e t may deem appropriate. rv se Publication 11. Wh e tse rre a licence is revoked under this Part, the Bank shall- of notice of revocation (la ri)g h within three working days following the date of l a. A i revocation, publish a notice of revocation in newspapers za n of wide circulation in the United Republic; and an f T (b) take any other steps necessary to inform the general t o en public of such revocation. ern m oPvrohibition 12.–(1) A payment system provider or a payment system 5 Gof undesired 02 conduct participant shall not engage in any act which is likely to- ©2 (a) result in systemic risk; or (b) prejudice the integrity, effectiveness or security of the payment system. 262 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (2) The Bank shall direct a payment system provider or a payment system participant who has engaged in an act prohibited in subsection (1) to remedy the situation in such manner as the Bank may deem appropriate. AG. Cessation to 13.–(1) A person who is in the management of a payment f Oo hold office system shall cease to hold office, in case of- ion ss (a) bankruptcy; i erm (b) conviction for an offence involving fraud or dishouo t np esty; (c) removal from office by a competent authorit th wyi ; (d) unsound mind; or ute d (e) death. rib ist (2) A person who was in the manageomr d ent of a payment system whose licence was revoked, csedu hall not without the approval of the Bank, act in the mproa dnagement of any other payment system. re y b e a Offences under 14. A person who contra m okvenes any provision of this Part this Part commits an offence andis ob on conviction, shall be liable- (a) in the case of oaf thnatural person, to a fine of not less than t fifty millionar p shillings or imprisonment for a term not exceedi o d. n Ng five years, or to both; or (b) in tehrve e case of a body corporate, to a fine of not less than sfi rv ese hundred million shillings. igh t ll r . A PART IV an ia nz PAYMENT INSTRUMENTS a of T Prohibietino t n to 15.–(1) A person shall not issue an electronic payment issuen mpayment insetrruments instrument without a licence or an approval issued by the Bank. ov Gwithout licence (2) Subject to subsection (1), the Bank shall, where the 25 or approval 0 payment system provider applicant is a- ©2 (a) non-bank or non-financial institution, issue a licence; or (b) bank or financial institution, issue an approval. 263 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] Eligibility 16. An electronic payment instrument shall be eligible for of payment instrument licensing or approval by the Bank, if it is capable of- (a) ordering or transmitting payment instructions; (b) storing of information on a device for purposes of . effecting payments; G OA (c) being accepted for fulfilling payment obligations on f n o point of sales, merchants outlets or over the internet; io iossr (d) having any other ability that the Bank may prescriebrme. ut p o Application 17.–(1) A payment system provider that intends wtio th operate for payment instrument a payment instrument shall apply in a prescribueted d form for a licence or licence or an approval. str ib approval i (2) An application made under subs oer cdtion (1) shall be accompanied by such information asu medc ay be prescribed by the Bank. pro d (3) The Bank shall grant a lic erebe nce or approval when it is satisfied that the applicant hmaas y met the licensing or approval criteria under this Act and k oo any other requirement specified by the Bank. s b thi (4) Within ten drt aoy f s following receipt of an application or where further infoo rpm a ation has been required, after receipt of such information, tdh. Ne Bank shall either grant or reject application. (5) Wheerrvs ee an application is rejected, the Bank shall give reasonsts fro e r the rejection. (6i)g hl r Subject to subsection (5), an applicant whose application is. rA l ia ejected may re-apply if the deficiencies that formed the basis za nfor rejection of the initial application have been rectified and an f T the Bank may either grant or reject the reapplication. t o en (7) An applicant who is aggrieved by the decision made m ve rn under this section, may apply to the Governor of the Bank o G within thirty days after receipt of such notice of rejection for 250 review of the decision. ©2 Suspension 18.–(1) The Bank may suspend a licence or an approval of an of licence or approval operating payment instrument where it is satisfied that- (a) a payment system provider failed to meet communication infrastructure requirements prescribed by the Bank; 264 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (b) the payment instrument is detrimental to the interests of the users; or (c) the payment system provider is directed to suspend services under any other written law. . (2) Subject to subsection (1), the Bank may call upon a OAG licensee or approved person to show cause why the license or of n approval should not be suspended. io iss (3) Where a licensee or approved person fails to show cearmp use to the satisfaction of the Bank, the Bank may suspoeun t d the licence or approval or make any other order as it wmi thay deem d appropriate. ute ist rib Revocation 19.–(1) The Bank may revoke a licence orr do an approval of a of licence or approval payment instrument where- ce d u (a) any other licence or apprporov dal related to payment systems is revoked underb ea rney other written law; (b) the provider voluntarmilay y requests revocation; (c) the provider proviodoe k d false or misleading information when applying fos rbhi the licence or approval; or t (d) the provide f rtr o fails to comply with the terms and conditiono sp aof the licence or approval. (2) Subjectd . t No subsection (1), the Bank may issue a seven days noticee rs cvealling upon a licensee or approved person to show cause wh rets y the licence or approval should not be revoked. ( g l3 ri) hWhere the licensee or approved person fails to show l ciaa. u Ase to the satisfaction of the Bank, the Bank may revoke the n za licence or approval or make any other order as it may deem an T appropriate. nt of Offernnm e ces under 20. A person who contravenes any provision of this Part theis Part ov commits an offence and on conviction, shall be liable- 25 G 0 (a) in the case of a natural person, to a fine of not less than ©2 fifty million shillings or imprisonment for a term not exceeding five years, or to both; or (b) in the case of a body corporate, to a fine of not less than five hundred million shillings. 265 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] PART V ELECTRONIC CHEQUES Cheque 21. A person may present a cheque in an electronic form in a . presentment payment system. AG O n o f Electronic cheque 22.–(1) The Bank shall prescribe the manner of electronisisc io presentment cheque presentment for payment through a clearing houseermp . (2) Subject to subsection (1), a bank may preuts ho ent a cheque for payment to another bank, on whom it di tw is drawn, by electronically transmitting its essential feat te trib uures instead of presenting the cheque itself. is or d Admissibility of 23. In the event of proceedings in a couur d cte, tribunal or any other electronic image of cheques as judicial proceedings, a cheque or ap rco dertified copy of it or the evidence essential details of the cheque bre eretrieved from an electronic medium, which is the subjeacym t of proceedings in a court, tribunal or any other judic k ooial proceedings, shall be admissible as evidence. b thi s of art o p PART VI d. N ve ELECTRONIC MONEY r es e Prohibition to 24.–(1 r h)ts A person shall not be an issuer of electronic money issue electronic withl roigmoney without l ut a licence or an approval issued by the Bank. A licence or . nia (2) Subject to subsection (1), the Bank shall, where the approval a nz payment system provider applicant is a- a of T (a) non-bank or non-financial institution, issue a licence; en t and ern m v (b) bank or financial institution, issue an approval. Go 5 20 2 Electronic money 25. The Bank shall prescribe eligibility requirements for © issuer eligibility requirements an electronic money issuer, which shall include corporate structure, permissible services and capital adequacy. 266 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] Application for 26.–(1) A person who intends to issue electronic money shall electronic money issuance licence apply in a prescribed form for an electronic money issuance or approval licence or approval. (2) An application made under subsection (1) shall be . accompanied by such information as may be prescribed by G OA the Bank. of n (3) The Bank shall grant a licence or approval when it issiois satisfied that the applicant has met the licensing criteria u rm pender this Act and any other requirement specified by the Baunt o k. (4) Within thirty days following receipt of an ith d awpplication or where further information has been requirebdu t,e after receipt of such information, the Bank shall either g tri dirsant or reject the application. d o r (5) The Bank may, where it grant ce dsu a licence or approval, impose such terms and conditions apsroe it may deem appropriate. (6) A licence or an approval shea r b ll be valid for a period of five years unless suspended or re ay mvoked. (7) When an applicat o bio nk is rejected or revoked, the Bank shall provide reasons f toh irs the rejection or revocation. (8) Subject to subrt soe f ction (7), an applicant whose application is rejected may reo -pa apply if the deficiencies that formed the basis for rejection od.f N e the initial application have been rectified, and the Bank mervs ay either grant or reject the re-application. (9) Wts r e h here the application is rejected and the applicant is agglrl riie gved by that decision, he may apply for review to the Ga. o A i vernor of the Bank within thirty days after receipt of such za n n notice of rejection. Ta of Renewaeln o t f 27.–(1) The holder of a licence or approval granted under electnrmonic money isseurance licence this Part may, six months before the expiry of such licence or Gov r approval approval, apply to the Bank for renewal. 250 (2) On receipt of an application under subsection (1), the ©2 Bank may renew the licence or approval upon- (a) payment of renewal fee for the licence; and (b) fulfilment of such terms and conditions applicable for grant of licence. 267 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (3) The Bank may refuse to renew a licence or approval if the applicant has failed to comply with the conditions contained in the previous licence or approval. Suspension 28.–(1) The Bank may suspend a licence or an approval to G. of licence or A approval to issue issue electronic money where- of O electronic money (a) it is satisfied that the affairs of the electronic monessyi o n issuer are being conducted in a manner theartm i is detrimental to the financial system or to the uuto s pers of the electronic money; or ith w (b) the payment system provider is directed teodu suspend to offer services under any other written r is tla ibw. (2) Subject to subsection (1), the Ban okr d may call upon a licensee or approved person to show cuacue dse why the licence or approval should not be suspended. rodp (3) Where a licensee or an abpe preroved person fails to show cause to the satisfaction of they ma Bank, the Bank may suspend the licence or approval or mk oo ake any other order as it may deem appropriate. b thi s t o f Revocation of 29.–(1) The Bankp am r ay revoke a licence or an approval of the electronic money electronic monNeo issuer licence or d. y issuer where- approval (a) anye rvo ether licence or approval related to payment s yres s s tems is revoked under any other written law; (b)g h tthe issuer voluntarily requests revocation; A(ll ri . c) the issuer provided false or misleading information nia za when applying for a licence or approval; Tan (d) the issuer failed to comply with the terms and ofnt conditions of the licence or approval or any remedial e rnm measures required under this Act; ov e (e) the issuer engaged in a pattern of unsafe or unsound 5 G 02 practices that threaten its financial condition or is ©2 detrimental to the interests of the payment system providers or users; 268 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (f) the issuer refused to permit an inspection or provide information required by the Bank or is otherwise in breach of provisions of this Act; (g) the issuer ceased to do electronic money issuance . business in the United Republic; G OA (h) the issuer is insolvent as determined by the Bank or of n court; or siois (i) the issuer failed to comply with any requiremeremp nts under this Act. t ou (2) Subject to subsection (1), the Bank may iss th wuie a seven d days notice calling upon a licensee or approved bpue terson to show cause why the licence or approval should nodtis b trie revoked. (3) Where a licensee or approved p r d eorson fails to show cause to the satisfaction of the Bank, t e dhu ce Bank may revoke the licence or approval or make any otphroe er order as it may deem appropriate. r y b e ma Electronic money 30.–(1) An electronic moono ke y issuer licensed or approved to issuance and circulation issue electronic money sh bhi all- t (a) issue electrort no fi c money only after equivalent cash is depositedo pi an the trust account or a special account in accordda. Nnce with this Act; (b) en rve sseure that the electronic money issued is equal to the tsc ra esh deposit held in a trust account or a special bank h l ri g account in accordance with this Act; . A l ia (c) submit in electronic form to the bank holding the trust n za account, the names of all subscribers and users of the an f T electronic money service whose funds are in the trust t o en account, in prescribed period; and ern m (d) comply with such requirements, as the Bank shall ov G prescribe. 02 5 (2) Redemption of cash from electronic money or purchase ©2 of electronic money may be conducted at agents under agency agreements with a payment system provider licensed or approved to issue electronic money. 269 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (3) The Bank shall prescribe agents regulations to govern their conduct that may include compliance with anti-money laundering laws, liquidity requirement, customer due diligence and handling of consumers. AG. Offences under 31. A person who contravenes any provision of this Part f Oo this Part commits an offence and on conviction, shall be liable- sio n s (a) in the case of a natural person, to a fine of not less etrhm ian fifty million shillings or imprisonment for a t t oeurmp not exceeding five years or to both; or with (b) in the case of a body corporate, to a fine oufte n d ot less than five hundred million shillings. trib r d is o PART VII ce d du TRUST ACCOUNT AND SPECpIroe AL BANK ACCOUNT r be Trust account 32. A licensed payment systmea my provider who is a non-bank or non-financial instituti ok bon licensed as an electronic money issuer shall be require tdh i st o open and maintain a trust account in accordance with rt ho fis Act. o p a Special bank 33. A licensedd. N payment system provider who is a bank or account financial sienr vsetitution licensed as electronic money issuer shall b r tes r eequired to open and maintain a special account in accol rrigd hance with this Act. . A l a Trust account an3 i z 4.–(1) A licensed electronic money issuer referred in section management an T 32 shall establish a separate legal entity in the form of a trust ofnt to manage the trust account whose corporate structure and me rn management has been approved by the Bank. ov e (2) A legal entity referred to in subsection (1) shall- 25 G 0 (a) submit an application to the Bank in a prescribed form ©2 to open a trust account in a bank to facilitate issuance of electronic money; (b) enter into trust account agreement with a bank in the manner prescribed in the regulations; and 270 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (c) open the trust account at a bank for the purpose of maintaining funds of a customer who has purchased electronic money from the electronic money issuer. (3) An electronic money issuer and a legal entity referred to . in subsection (1) shall- G OA (a) not commingle or use the trust account funds with any of n other funds of any other operations; iss io (b) set up safeguard measures to protect the fundsp ef rmom risks that may occasion loss to beneficiariesou to f the funds; ith d w (c) mitigate concentration risk on holding theut etrust account by placing it in different banks as may rib dis tbe prescribed by the Bank; d o r (d) ensure that any interest accru ce deud in the trust account is effected directly to benefi ro ept the consumer as may be prescribed by the Bank; e r b (e) audit and publish fi mn aayncial statements of the trust entity in respect obfo otkhe trust account; (f) submit a repor tt h ison the operations of the trust account to the Bank o onfrt monthly basis or such other intervals as the Banko m p aay prescribe; (g) ensureed . dNemand of cash withdraw from the account is ho rv res neoured; (h) h tsensure that the funds in the trust account are at all rigll times equal to the electronic money issued; and A ia. (i) comply with any other requirement as the Bank may an nz prescribe. Ta of (4) A person who contravenes any provisions of this section nt e commits an offence and on conviction, shall be liable- rnme (a) in the case of a natural person, to a fine of not less than ov G fifty million shillings or imprisonment for a term not 25 20 exceeding five years or to both; or © (b) in the case of a body corporate, to a fine of not less than five hundred million shillings. 271 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] Special bank 35.–(1) A licensed electronic money issuer referred to in account management section 33 shall- (a) submit a notice to the Bank in a prescribed form for opening a special account to facilitate issuance of . electronic money; AG O (b) open a special account for holding deposits received of n from a customer who has purchased electronic monesyiois from the electronic money issuer; ermp (c) ensure that the account has records of all cu t osutomers served under electronic money service; with d (d) ensure that the special account is protecbut teed from risks that may occasion loss to beneficiadrisi teris of the funds; and or d (e) comply with any other requir ce deument as the Bank may prescribe. ep ro (2) A person who contravene bse a rny provisions of this section commits an offence and on c mo anyviction, shall be liable- (a) in the case of natu ok boral person, to a fine of not less than fifty million sh s tihl ilings or imprisonment for a term not exceeding firvt eo f years or to both; or (b) in the casoe p aof a body corporate, to a fine of not less than five hun. Ned dred million shillings. erv s r es ht PART VIII l ri g l A FINALITY OF PAYMENT AND ia. an NETTING ARRANGEMENTS an z T Validity a tn od f 36.–(1) A payment instruction or settlement in a payment enforceeanbility of finmality of system shall be valid and enforceable. n pvaey rments and (2) The payment instruction or settlement under subsection o Gsettlement 5 (1), shall be final and irrevocable, and shall not be reversed or 20 2 © set aside by any person from the time the payment instruction or settlement is determined to be final. (3) Subject to the provision of subsection (2), the Bank shall prescribe the manner of handling payment instructions or settlement made in error. 272 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (4) Where the Bank considers that there is a likelihood for the occurrence of a systemic risk on making of a payment or settlement referred to in subsection (1), it shall- (a) prohibit the making of the payment or transfer . instruction, or set aside the payment or transfer; and AG O (b) issue a written notice to the payment system participants of n explaining the reasons for such prohibition or settin io issg aside the payment or transfer. ermp (5) A transaction effected in contravention of thiso us t ection shall be void. th d w i ute Validity and 37.–(1) A netting arrangement in a paymen ib stt rsystem shall be enforceability i of netting valid and enforceable. d or arrangements (2) A net settlement obligation owe ed ucd to a payment system provider or payment system par d ptriocipant under a netting arrangement that has not been dis rcebe harged is provable claim in insolvency proceedings and mshaya ll be recovered for the benefit of beneficiaries. k o bo thi s rt o f PART IX a WINDINGNo- pUP, RECEIVERSHIP OR JUDICIAL MvAedN . AGEMENT OF PARTICIPANTS r res e IN A PAYMENT SYSTEM igh ts Winding-up 38.l–l rA (1) An order for winding-up or placing under judicial notice Cap. 212 noiar . statutory management in terms of the Companies Act or za an any other insolvency law issued on a participant in a payment T of system shall immediately be lodged with the Bank. nt me (2) The order referred to in subsection (1) shall not affect ernv any settlement of payments or instructions in a payment 5 G o system made before issuance of the order. 2 ©20 Liquidator, 39.–(1) Notwithstanding anything to the contrary, the statutory manager Companies Act or any other insolvency law, where an order bound by is issued for winding-up or placing the payment system payment system instruction participant under judicial or statutory management, any Cap. 212 273 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] payment or settlement obligation to which the participant in the payment system that was- (a) determined before the issuance of that order; (b) to be discharged, transferred on or after the issuance of . that order; or OAG (c) overdue for settlement on the date of that order, n o f shall be binding upon the participant’s liquidator, judicial iossr io statutory manager. pe rm (2) Subsection (1) shall apply to any payment or setotul t ement obligation which was- ith d w (a) determined through the payment syst te beum before the issuance of that order; ist ri d (b) liable for discharge or transfer on r d o r after the issue of that order; or ce du (c) overdue for settlement on thpero date of that order. e r e b Priority of 40.–(1) Notwithstanding anyaym thing to the contrary in the payment instructions in Companies Act, or any othoekr o insolvency law, where- winding-up (a) a participant inh a b is payment system is wound up; and Cap. 212 t (b) there are unrt do fe livered transfer instructions that were drawn oon p athe participant and cleared through the paymedn. Nt system before the making of the winding- ups orvree der, the undelivered transfer instructions shall tsb re e paid from the participant’s estate, and shall rank in l ri gh preference above any other unsecured claim against the l A ia. estate. anz (2) Subsection (1) shall not be construed as permitting n f T a a payment instruction to be paid in preference to any other t o en claim against an estate, where the instruction was certified by m ern the payment system participant or was intended to give the Gov drawee of the instruction a preference over other participants 02 5 in the payment system or other creditors. ©2 274 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] PART X COLLATERAL AND FAILURE TO SETTLE ARRANGEMENTS G. Collateral 41.–(1) The Bank shall prescribe the manner of holding OA arrangement f adequate liquid assets as collateral for securing or obtainingio n o funds by payment system participants to facilitate settlemeism nst of their payment obligations in the payment system. er t p (2) The collateral referred to in subsection (1) shaitlhlo b u e- (a) used for fulfilling a participant’s obligatioend was a result of any cause of failure to settle its oblig ut riabtion including insolvency; and di st r (b) protected against insolvency. o ed (3) A participant who operates wituhc inadequate collateral commits an offence and on convictpir od re on shall be liable to a fine of not less than five hundred myi bll eion shillings. ma k Failure to settle 42.–(1) A payment sy bsot oem provider shall put in place arrangements documented failure-f toh ist -settle arrangements that prescribe the manner to whairct ho settlement failure shall be mitigated in the event of failuo rpN e to settle obligations by one or more of the participant ivn . ed the payment system. (2) A pesaey r ment system provider shall submit to the Bank the failureh-tst or -settle document referred to in subsection (1). g All r i ia. PART XI za n n Ta GENERAL PROVISIONS nt of Submmisesion of 43.–(1) A payment system provider shall submit returns reteurnrns ov relating to operation of the payment system or electronic G 25 payment service as may be prescribed by the Bank. 20© (2) The Bank may use or share information obtained under subsection (1) for public consumption. 275 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (3) A person who fails to comply with this section shall be liable to a penalty of ten million shillings payable to the Bank everyday during which non-compliance continues and such penalty may be recovered from any balance held in the Bank . or through any other legal recourse. OAG of Access to 44.–(1) The Bank shall have access to information relatin n sgio information s to any payment system and may request, in writing, i ertmhat information be furnished by payment system provider p ou tw ithin fourteen days from the date of request. with (2) A person who fails to comply with this seutcet dion shall be liable to a penalty of ten million shillings payistar ibb le to the Bank everyday during which non-compliance d ocro ntinues and such penalty may be recovered from any bauclea dnce held in the Bank or through any other legal recourse.rodp e r e b Confidentiality 45.–(1) An information obtai anyed in terms of section 44 shall be confidential and may nook t m be disclosed by any director or officer of the Bank unlesss b o i such disclosure is required by law. (2) Notwithstan dof itnh g subsection (1), the Bank may t disclose any info pram r ation to another agency responsible for regulating or ds.u Npoervising payment system providers pursuant to informa e ertvion sharing agreement whether in the United Republi s sc r e or abroad, as long as that information is needed and is to ht rbige used for supervisory or oversight purposes and that its coAnll . fidentiality shall be maintained. nia za Retention of n Ta 46.–(1) A payment system provider shall maintain record of all payment syosft em records t electronic payment transactions and information obtained or men n generated in the operation or administration or management r ov e of the payment system for such period as may be prescribed 5 G2 by the Bank. ©20 (2) Retention of records under subsection (1) shall be in electronic and non-electronic form based on the manner of generation or obtaining of such record to ensure preservation of its originality. 276 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (3) Subject to subsection (1), a person who intends to destroy electronic payment transaction records under this Act shall apply to the Bank for approval. (4) A person who contravenes this section commits an . offence and on conviction, shall be liable to a fine of not less OAG than five hundred million shillings. of sio n s Electronic money 47.–(1) There is established a levy to be charged on electr i eormnic withdrawal levy money withdrawal transaction at a rate ranging fromut p Acts Nos. o 10 to 3 of 2021 s. 33 4,000 Tanzanian Shillings. ith 5 of 2022 s. 89 w 7 of 2023 s. 48 (2) The Minister shall, after consultation withute t dhe Minister responsible for communication, make regulaisttir iobns prescribing the manner and modality under which th d oer levy on electronic money withdrawal transactions m d uacye be collected and accounted for. d pro (3) The provision of this bes reection shall not apply to transactions involving paymemnyt a of salaries by employers. oo k [s. 46A] s bi Protection 48.–(1) Without prej th ouf dice to any other written laws, a payment of customer t information system provider shaar p ll- (a) protect o d. Nthe privacy of a participant and customer infoervm e ation; and (b) nroess t disclose information of a participant or customer t rig h unless the disclosure is made in compliance with the All . law, an order of a court or with the express consent of nia za the system participant or customer concerned. n Ta (2) A person who contravenes this section commits an of nt offence and on conviction, shall be liable to a fine of not less e rnm than a hundred million shillings. ve [s. 47] 5 G o 2 ©20 Time to effect 49.–(1) A payment system provider, upon receipt of funds transfer of funds to customer’s in the settlement account in respect to its customer, shall account immediately transfer the funds to the customer’s account. 277 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (2) Subject to subsection (1), the Bank shall prescribe the specific time of effecting transfer of the funds to a customer’s account with respect to the payment system type. (3) A person who contravenes the provisions of this section . commits an offence and on conviction shall be liable to a fine G OA of fifteen percent per day of the funds delayed to be transferred of n in the customer’s account. siois [pse. r m48] ut o Investigations, 50.–(1) For the purpose of conducting inveitsh w tigation, inspections, supervision and inspection, supervision and oversight under this tAedu ct, the Bank oversight may in writing authorise its officers to- tribis (a) enter and search the premises of d o r a person that the Bank has reason to believe is purcoev diding or carrying on a payment system or providirnodp g an electronic payment service contrary to this Ac trebe ; (b) inspect any books, c y moamputers, servers, accounts and records or take anoyo kr elevant thing or information that will assist in thheis ibnvestigation of that person and take t copies or mart ko fe extracts from them; and (c) implemeon pt a supervision and oversight on a payment systemd . p Nrovider and the risks to which it is subjected to. erv e s (2) sI nr e t supervising and overseeing a payment system prov h l ri gder that operates both within the United Republic and in Al aian. y other country, the Bank may enter into arrangements for anz sharing supervisory and oversight information on a reciprocal n f T a basis with the appropriate supervisory or oversight authorities t o en within or outside the United Republic. ern m [s. 49] ov 5 G 02 Compounding of 51.–(1) The Governor of the Bank or an officer specifically ©2 offences authorised by the Governor of the Bank by notice published in the Gazette may, subject to and in accordance with this section, if he is satisfied that a person has committed an offence under this Act, compound such offence by accepting from such person a sum of money. 278 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (2) A sum of money payable under subsection (1) shall- (a) not exceed the maximum fine provided by this Act for that offence; (b) include all reasonable expenses and other payments . which the Bank may have incurred in the seizure, G OA storage, maintenance or removal of any articles seized of n in connection with the offence. siois (3) The power conferred by this section shall be exerpce rimsed where a person admits that he has committed the offenuto c e and agrees in writing in the prescribed form. ith d w (4) The Governor of the Bank or officer exebruc teising powers under this section shall issue the person i dis tfrrom whom he receives any sum of money under subsec otrd i on (2) a receipt in the prescribed form. ce rod u (5) The sum of money receivede punder this section shall be paid into the Consolidated Fun bde rafter deduction of expenses and payments. y m a (6) Where any procee ok bdoings are brought against any person for an offence against t isis th Act, it shall be a good defence if such person proves that rtt oh f e offence with which he is charged has been compoundoe pd a under this section. (7) The or .e Ned r for compounding offences under this section shall be trsera vted as an order or decree of the High Court and e shall bhets er nforced as the order or decree of the High Court. rigll [s. 50] A nia . Consumer za 52.–(1) The Bank shall prescribe consumer protection protection in an payment sysft Tem requirements relevant to payment system services. t o en (2) Subject to subsection (1), a payment system provider ern m shall provide a consumer with- ov G (a) terms and conditions that are transparent, fair, legible, 5 02 in comprehensible language and provide the rights and ©2 obligations of the parties; (b) complaints handling and dispute resolution mechanism; and 279 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] (c) full disclosure of relevant information for the use of the electronic payment service including pricing of the products and services. (3) A payment system provider shall not mislead a consumer . in any advertisement or purport to offer a service that is not OAG approved in accordance with this Act. f n o [s. 5s1s]i o erm i Availability of 53. A payment system provider shall ensure that servuict pes are payment system o services available to the users throughout the prescribed opith w erational period. ute d ist rib [s. 52] or d Cybercrimes in 54.–(1) A person who gains access to ancoetdher person’s financial payment systems data, record or transaction with the ariodd uof any device, electronic device or any scheme or metho p e dr e that facilitate retrieval of information and data without b apyermission commits an offence. (2) A person shall noto k i mntentionally and without lawful excuse produce, sell, proisc bu ore for use, import, export, distribute or deal with- th t o f (a) a device th pa rt is designed or adapted for the purpose of accessinNgod. financial information; (b) a coemrv eputer password, access code or any data by which sa r ecsomputer system is capable of being accessed; or (c ri) t g h the computer program with intent that may be used by ll . A him or another person for the purpose of committing nia za an offence. Tan (3) A person who contravenes the provisions under this f nt o section commits an offence and on conviction, shall be liable e rnm to a fine of ten million shillings or three times the value of ov e the property illegally obtained whichever is greater, or to 5 G 02 imprisonment for a term not exceeding five years, or to both. ©2 [s. 53] 280 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] Cooperation 55. The Bank shall cooperate with other regulators and between regulators in Government agencies relevant to payment systems in areas payment systems of monitoring, supervision of payment systems, enhancing efficiency of Government payments, tax payments and other . financial payments. OAG [s. 54] of n ss io Immunity 56. An action or other proceedings shall not lie or be institumtier ed against any officer or employee of the Bank in respectu t o opf any act or thing done or omitted to be done in good fwait ihth in the exercise or purported exercise of powers conferr d ueted by this Act. tribis [s. 55] or d Regulations, 57.–(1) The Governor of the Bank may d c emake regulations and directives and circulars rules in the Gazette which are conrosdi ustent with this Act for proper and effective implementatei ro epn of this Act. (2) Without prejudice to sauy b bsection (1), the Governor of the Bank shall make regula otkio mns in areas of- (a) licensing require o ism b ents; (b) participating ifn th o payment systems; t (c) electronic pap r ayment instrument, electronic money, electro o dn. Nic cheque; (d) payemrv eent system provider’s agents; (e) firness ality of payments and settlement; (f t r)ig h collateral arrangement; . A( llg) specific time of effecting transfer of the funds on ia za n customer’s account; n Ta (h) trust account management; f nt o (i) retention period for payment system transactions e ern m information; and ov (j) consumer protection requirements. 5 G 02 (3) The Governor of the Bank may, without publishing in ©2 the Gazette, issue directives, standards, guidelines, orders and circulars regulating the manner by which the objectives of this Act may be carried out. [s. 56] 281 THE NATIONAL PAYMENT SYSTEMS ACT [CAP. 437 R.E. 2023] Transitional 58.–(1) A person who, before the commencement of this Act, provisions obtained a written approval of the Bank to operate a payment system or issue a payment instrument, shall within six months of commencement of this Act, apply for a licence in accordance . with this Act. G OA (2) A person referred to in subsection (1), who continues to- of (a) operate a payment system; sio n is (b) issue a payment instrument; ermp (c) issue electronic money; or ut o (d) issue any other payment system services, ith d w after expiry of six months following the date of cobum te mencement of this Act commits an offence and on codn i isvtriction, shall be liable to a fine of not less than one hundr d oe rd million shillings or to imprisonment for a term of notd ue cxeceeding five years, or to both. ro re p y b e [s. 57] k m a bPooART XII CONSEQUf thE isNTIAL AMENDMENTS o art Omitted 59.–61. [Omitteod p.] d. N ve [ss. 58–60] ers re igh ts r All nia . za Tan t o f en rnm ov e 25 G ©20 282