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World Bank Working Paper
Box 4.3. General Principles for International Remittance Services The general principles are aimed at the public policy objectives of achieving safe and efficient international remittance services. Observing these principles, markets should be contestable, transparent, accessible, and sound. Transparency and Consumer Protection General Principle 1: The market for remittance services should be transparent and have adequate consumer protection. Payment System Infrastructure General Principle 2: Improvements to payment system infrastructure that have the potential to increase the efficiency of remittance services should be encouraged. Legal and Regulatory Environment General Principle 3: Remittance services should be supported by a sound, predictable, nondiscriminatory, and proportionate legal and regulatory framework in relevant jurisdictions. Market Structure and Competition General Principle 4: Competitive market conditions, including appropriate access to domestic payments infrastructures, should be fostered in the remittance industry. Governance and Risk Management General Principle 5: Appropriate governance and risk management practices should support remittance services. Roles of Remittance Service Providers and Public Authorities A. The role of remittance service providers: Remittance service providers should participate actively in the implementation of the General Principles. B. The role of public authorities: Public authorities should evaluate what action to take to achieve the public policy objectives through implementation of the General Principles. Source: BIS (2007).
management practices that ensure safety of the remi ance services and the consumers through appropriate laws and regulations. In addition, this reflects appropriate riskmitigating mechanisms by the formal financial sector to safeguard the remi ance transfers and customers. Uganda’s financial sector faces the challenges of expanding the payment base, developing new instruments, and reducing the use of cash. There is a greater need to change the banking culture in Uganda. This can be done through introducing newer, more customer-friendly products and lower fees and increasing financial outreach. Infrastructure issues can hamper development in the payment system. Improvements in infrastructure, mainly telecommunication and energy, should greatly enhance further developments in the payments system. Issues to address are extension of rural services, move from magnetic to chip cards to enhance safety, availability of auditable smart cards, and potential of mobile phones (over 1.5 million connected customers). Other areas to focus on include the use of non-cash payments, increasing the number of accounts, working on cross-border payment systems by way of addressing issues of multi-currencies and exchange rate dierences, linking to real-time gross se lement systems, and enhancing banks’ usage of available electronic systems and technology (suitable for design, order, print, coding, and storage of products).