Consumer Protection Issues for Digital Financial Services in Emerging Markets

In emerging markets the roll-out of Digital Financial Services (DFS) products and services have been plagued by infrequent end-user usage despite high registration numbers. Active usage relies on consumers valuing and trusting DFS. This paper explains how financial regulators can assist to instil this trust by viewing the DFS from the consumers’ perspective in the design and development of consumer protection frameworks for the DFS. In the DFS ecosystem, the product provider and consumer may never meet face-to-face – this can create confusion for the consumer about accountability. This paper presents a framework of analysis to use in developing consumer protection frameworks focusing on the nature and roles of participants in the DFS payment chain. Key principles and responsibilities for regulators are highlighted - including that regulators address accountability issues. Consumer protection frameworks that meet the specific needs of end-users of DFS will encourage more active use of DFS.

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Originally Published: 
06/09/2017