Catch Up Time: Reforming Electronic Money Transfers In Lebanon

INTRODUCTION

Whether it be a swipe of a card at a store, or an online purchase, Lebanese consumers conduct financial transactions electronically every day. These transactions, known as Electronic Money Transfers (EMTs), are conducted via a computer or mobile device that authorises banking or non-banking financial institutions to debit or credit an account. EMT consists of virtually all operations conducted electronically: deposits, credit and debit card transactions, wire transfers, and bill payments (See Figure 1).

Over the past decade, there has been a proliferation of EMT services in Lebanon conducted through Automated Clearing House (ACH) networks, such as the SWIFT network used by commercial banks around the world. Banks and non-banking financial institutions (such as Western Union and MoneyGram) use these networks to process transfer requests to and from their clients. At the same time, in order to be allowed to conduct EMTs in Lebanon, a bank or financial institution must be licensed by BDL. As of April 2019, the BDL has only issued such licenses to traditional banks, a handful of international financial institutions, and one local mobile EMT company.

All the while, EMT services that target users who want to conduct money transfers without having to physically go to a bank or institution (e.g. through their phones) have been burgeoning in the region. Smartphone usage in WANA has skyrocketed, paving the way for Mobile Money Transfer (MMT) companies to enter a strategic segment of EMT through mobile devices.¹ MMT services such as TransferWise, Venmo or OFX are used from Morocco to the United Arab Emirates (UAE). Rather than deal with excessive bank fees, or waste time conducting transactions in person, consumers can now use these services to transfer money to their peers, purchase products, use alternative currencies, and manage expenditures directly through computers or mobile devices: in real-time and at virtually no cost. Moreover, EMT services available in the region today include globally recognised mobile payment apps such as PayPal, Google Wallet or Apple Pay where consumers from all around the world are able to buy goods from abroad through a virtual payment gateway, which facilitates transfers between accounts and online devices.

Today Egyptians, Emiratis and Jordanians (to name a few) have embraced consumer access to EMT and MMT services. Countries around the region have expended extensive efforts to positively reform and develop their regulations and bring them up-to-date with modern financial technology. Lebanon, however, has not.

The result is that Lebanese consumers continue to suffer from relatively high fees and time-consuming procedures when they send or receive money. This policy brief sets out to understand the underlying reasons for the lack of EMT market development in Lebanon, detail who benefits from the present state of affairs, and present key recommendations for Lebanese policymakers, banks, civil society and consumers in order to bring Lebanon out of the EMT paralysis once and for all.

ANALYSIS

LIMITED OPTIONS = A PROFITABLE MARKET

The EMT market in Lebanon is dominated by 65 banks, along with several non-banking financial institutions (such as Western Union, OMT, Cash United, and MoneyGram), all of which are licensed to carry out domestic and international EMTs.^2,3 As a result, Lebanese banks and financial institutions retain comfortable market positions, and have limited impetus to provide globally competitive fees, on the spot services, or competitive currency exchange rates for EMTs. So while banks and financial institutions profit from the status quo, the Lebanese are left with limited, costly options when they want to send or receive money.

For example, consider the case of Rania. Rania lives and works in Lebanon and would like to transfer USD 500 to her cousin Wael in Los Angeles. Rania has only two options: either to go to a traditional bank or send the money through a financial institution such as MoneyGram or Western Union. Both options involve substantial fees and commissions relative to what Rania could pay if she had access to popular modern EMT services such as PayPal or TransferWise. But she doesn’t.

Instead, Rania can expect to pay anywhere from USD 15 to USD 35 to send USD500 to the United States through her bank. If she opts to use Western Union, she would not only have to pay USD 18.50 for the service, but would also have to go to the branch to do the payment in person.^4,5 Rania must also wade through vast amounts of documentation if she wants to compare the transfer fees offered by different banks and non-banking institutions. Luckily for Rania, we did it for her (See Table 1).

Yet if Rania and her cousin had access to PayPal, and were both in the United States, for example, Rania wouldn’t have to pay a cent to send USD 500 to her cousin, saving her both time and money. The same principle would apply the other way around if Wael wanted to send money to his mother in Lebanon, if she had a PayPal account.⁶

 ATTACK OF THE KILLER EXCHANGE RATES

In addition to the high transfer fees, Lebanese consumers also face the absurd reality of hidden fees,⁷ notably in terms of currency exchange rates. If Rania wants to send or receive money internationally in another currency, exchange rates are also applied – and that fluctuating rate may not always be the mid-market rate, the middle point between the buying and selling price of a currency. Western Union, for example, offers exchange rates up to 6% above the mid-market rate, while MoneyGram offers exchange rates up to 5% above the mid-market rate.⁸

Not only is Rania dealing with these fees, but so are her loved ones, such as Wael, who is receiving and sending money to her. If Rania decides to move to Cairo, for instance, and asks Wael to send her USD 500, and to receive them in Egyptian pounds, the two could enjoy a 0.75% exchange rate through the EMT service provider OFX, resulting in a USD 3.75 total cost for transferring USD 500.  Consequently, they would have saved between USD 10 to USD 35 on the USD 500 transfer compared to Lebanon’s antiquated transfer services (See Table 2). On top of that, if Rania wanted to send USD 500 in Euros to her relative Lara in  France, it would cost USD 2.97 in both transfer and exchange fees through the EMT service provider called TransferWise.⁹ What’s more, the whole process of sending and receiving that money with those EMT service providers could have been conducted immediately through
a smartphone, without having to deposit or collect cash from a bank or financial institution. Time is money — especially if one has to battle Lebanese traffic.

Now, consider that an estimated USD 7.5 to USD 8 billion is sent to Lebanese citizens as remittances every year.¹⁰ Then consider that for each transfer, incoming rates are charged to someone like Rania or Wael’s mother. Bottom line: Rania and Wael’s mother lose, banks and financial institutions win, every time.

In fact, banks have come to depend on this income to maintain profitability. Non-interest income – comprised of commissions, investment banking income and other operational income – constituted around 70% of commercial banks’ profit on interest (received minus paid, or USD 3.38 billion) in 2016 (latest available figures).¹¹ And while the breakdown of non-interest income is not available for the banking sector as a whole, income from fees and commissions at some of Lebanon’s largest banks provide a clear indication of just how important and profitable the fees they charge customers are for commercial banks. In 2018, Bank Audi, BLOM Bank and Byblos Bank drew USD 545 Million in income from fees and commissions alone.¹⁹

STATUS QUO REGULATION

Obviously, Rania, Lara, Wael and his mother could benefit if modern EMT service providers were available in Lebanon. They do not for a plethora of reasons related to why international EMT service providers don’t enter Lebanon, and local EMT providers do not develop.

For one, like many of its neighbours such as Jordan or Egypt, Lebanon is a cash-based economy – many consumers rely on direct cash payments at local shops, businesses or for home deliveries.^20,21 Traditional banking and financial institutions dominate the country partially due to consumer’s lack of awareness of alternative services and concerns over the security of their payments using those services.²⁵ Consequently, it is little wonder EMT service providers lack popularity with Lebanese consumers.²⁶

For international EMT providers, Lebanon’s risk profile at a political and regulatory level make it unattractive relative to other countries in the region. For instance, in 2013, PayPal announced it would launch in Egypt and Lebanon. Yet today the company operates in Egypt, UAE, Jordan, Tunisia, Algeria, Bahrain, Qatar, Saudi Arabia, and Yemen – but has yet to enter Lebanon.²⁷ In fact, Lebanon is uniquely listed under PayPal’s prohibited countries due to “Persons Undermining the Sovereignty of Lebanon or Its Democratic Processes and Institutions” —wording that falls under restrictions imposed by the United States on the militia-cum-party Hezbollah.^28,29

Lebanese money service businesses, as well as banks, have also been put under the spotlight by the United States for terrorist financing concerns under the Hezbollah International Financing Prevention Act (HIFPA) of 2015, and an amendment in 2018 (HIFPA II). In April 2019, the Chams Exchange in Chtaura was designated by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) for connection to Hezbollah. Such designations, as well as tighter controls by correspondent banks outside of Lebanon, led to BDL putting restrictions on what transactions money service businesses can do, and limited foreign transactions to larger companies. As a result several money service businesses, and one of the five major companies, have closed down.³⁰

While external pressures have had an impact, such as on PayPal, Lebanon’s regulatory regime, or lack thereof, is probably the greatest impediment to EMT service development in the country. Countries that have sound local EMT regulations, laws, and licensing serve to legitimise and protect an EMT company’s presence in the country, while strategic partnerships with local financial institutions helps ease the risk and process. When companies such as PayPal are in the process of entering a country, they often seek out bank partnerships or collaborations with central banks. In 2014, for instance, PayPal partnered with Jordan’s Cairo Amman Bank to provide services to the bank’s customers.³¹ Additionally, the Central Bank of Jordan sought proposals in 2012 from EMT and MMT companies to establish its national e-payment and mobile payment platform, JoMoPay, which was officially launched in 2014.^32,33 No such thing has taken place in Lebanon.

Indeed, when compared to Jordan, Egypt and the UAE, it is clear that the BDL has not kept pace with the need to update EMT regulations. The only regulation governing EMTs in Lebanon is in the form of a circular, Basic Decision No. 7548, issued by the BDL in 2000.³⁴ The regulation imposes basic requirements on financial institutions that wish to carry out EMTs in Lebanon, such as capital requirements and standards around anti-money laundering, and countering the financing of terrorism.^35,36,37 However, these are standard regulations that do not directly target nor specify key aspects of modern financial technologies, not to mention those which facilitate the entry of EMT service providers.

According to the BDL’s Basic Decision No.7548, EMTs are defined as “all operations or activities concluded, executed or promoted through electronic or photo-electronic means (telephone, computer, internet, ATM, etc.) by banks or financial institutions or any other institution’’.³⁸

Moreover, it defines financial institutions authorized to conduct EMTs as “issuers or promoters of all types of electronic charge, debit, or credit cards; institutions engaged in the electronic transfer of cash; and the websites specialized in offers, purchases, sales, and all other electronic banking services”.³⁹ This broad regulatory definition leaves much room for interpretation and fails to identify EMT or MMT services, thus resulting in legal uncertainties for those working in financial technology. Other countries in the region have faced similar issues, and resolved them.

The Central Bank of the UAE amended their regulations on EMTs to include and differentiate between both Payment Service Providers (PSP) and Payment System Operators (PSO), and went further to provide specific categories that fall under each.⁴⁰ In the EMT regulatory architecture, such inclusions become necessary, not only to recognise these providers and operators, but also to provide specific and relevant regulations to manage their services in the country of operation. Under BDL regulations, it remains difficult to identify how non-banking services like Apple Pay or Google Wallet, or direct carrier billing services like Boku or Fortumo, would be legally classified. Lebanon’s only MMT service provider is a case in point: local company PinPay, which was bought out by Bank Audi and BankMed in 2011. PinPay faced several issues related to the lack of definitional clarity in the regulations. Since Lebanon has no definition for peer-to-peer EMT (electronic money transfers made from one person to another, typically through a payment application), there is no guarantee that all potential users of PinPay could legally make transactions to each other. Hence, even though the intention of the PinPay service  as to offer users the ability to transfer money to their family and friends in near real-time using a mobile application, the two banks decided to only offer the service to their  own customers, removing the opportunity for users to transfer money to those outside of their banking network.

To date, the BDL has only licensed PinPay, which has come to constitute both the exception and the rule when it comes to EMT in Lebanon. Indeed, PinPay’s license was exceptionally issued ostensibly because the two main shareholders were traditional banks, Bank Audi and BankMed, and vouched for PinPay’s solvency and respect of financial transactions security. Since then, no other license has been issued to any other online financial institution, meaning that de facto and de jure, the banking sector maintains control of EMT. ⁴¹

NEW LAW, NEW HOPE?

After nearly 14 years of gestation, the Lebanese government issued Law 81 on Electronic Transactions and Personal Data in late 2018, replacing Law 133 from 1999, and introducing into law electronic signatures and standards on data privacy protection in electronic transactions.⁴² Though implemented late in the game, Law 81 brings hope for new EMT regulations.

However, apart from providing for some much-anticipated consumer rights provisions —such as obliging financial institutions to notify them of any fees, expenses, commissions or taxes related to their electronic payments— Law 81 does not oblige BDL to update its Basic Decision No. 7548, from 2000, or to regulate the EMT sector.

Law 81, like the previous law, still devolves responsibility for licensing financial companies wishing to conduct EMTs to the BDL.^43,44 As a consequence, any EMT service provider wanting to operate in Lebanon must first obtain the approval of the BDL – a lengthy and complicated process.^45,46 For instance, companies need to provide detailed personal information for each employee, from their CVs to police records and bank statements and, last but not least, have their application signed by the governor of the BDL himself.⁴⁷

LEBANON LOADING…

Lebanon remains far from where it should be in terms of EMT regulation and initiatives towards financial inclusion. Jordan has already launched a national e-payment and mobile payment platform specifically designed to address its cash-based economy. The platform has helped unbanked, low income Jordanians and registered refugee card-holders to have access to modern and affordable financial services.⁴⁸ Notably, in 2016,  the Central Bank of Jordan (CBJ) established the Digital Financial Services Council (DFSC) to address financial technology issues and establish reforms, highlighting the CBJ’s clear interest to develop the EMT and MMT industry in the country.⁴⁹ Egypt, another cash-based economy, not only implemented specific regulations for mobile payment services in 2016, but also established a National Council for Payment (NCP) to address all subjects related to payments in the country.^50,51 In the UAE, around 30 licensed EMT service providers offer mobile payment and mobile money transfer solutions.⁵² In 2017, the UAE Central Bank even issued a new “e-payment regulation” to facilitate the adoption of new payment service providers and operators in the country, as well as introduce the use of digital money (digitally stored value) to their payment methods.⁵³

CONCLUSION

It is clear that central banks and governments around the region are pushing for the entrance and development of EMT, MMT, and other financial technologies to help their population (banked and unbanked) access affordable services. Lebanon’s banked population still reels from exorbitantly high fees, while those who have no interaction with the financial sector (around 53% of adults) could become financialised almost immediately if modern EMT services such as direct carrier billing were in place.⁵⁴ Either by intention or design (or both), Lebanon, its central bank and its policy makers maintain a financial status quo that works in favour of the banks and a few financial institutions, putting their profits above Lebanese consumer welfare, yet again. If Lebanon is to continue to rely on decades-old regulations to organise the EMT sector, this situation will persist and the Lebanese will continue to suffer.

 RECOMMENDATIONS

The introduction of modern EMT services would dramatically benefit Lebanese consumers by reducing associated electronic money transaction costs, and enable citizens to buy/sell goods and services to/from abroad. This, in turn, would stimulate the Lebanese economy, create jobs and spur an almost non-existent e-commerce market.⁵⁵ The passage of Law 81 means momentum is building, and the introduction of EMT services should be a priority for regulators, financial institutions, policy makers, civil society and the general public. To help smoothen this path, the following recommendations target each of these groups.

Banque du Liban

The BDL needs to play its part as the key regulator of the EMT market. To do so, the central bank should institute detailed and clear definitions of EMT standards to allow consumers to make interbank transfers in near real time, from their computers or cellphones, and not only through the bricks and mortar banks. The BDL can easily emulate the models of the UAE, Jordan and Egypt, especially in terms of offering mobile payment solutions to the unbanked in the country.⁵⁶

In the end, the BDL’s EMT regulations need more than just revamping, they require a clear identification of which financial institutions are allowed to conduct EMTs, the ways they can conduct EMTs, who is eligible to use these services, and all the rights and duties under Lebanon’s legal framework.

Update Decision No. 7548 to encourage the establishment of EMT service providers. At present, the regulations and definitions around EMT in the form of Decision No. 7548 are outdated and irrelevant for EMT service providers. This is particularly the case for EMT providers offering mobile payment solutions, those wanting to set up shop in Lebanon, and for Lebanese entrepreneurs wishing to enter the local market.
The Decision needs to be updated to include definitions of key service types (such as peer-to-peer), service operators, as well as simplified and reasonable requirements to fulfill in order to enter the EMT market.

Establish a national EMT and MMT service that is accessible to all – from citizens to refugees. Following the Central Bank of Jordan, Egypt, and the UAE’s initiatives for financial inclusion, the BDL should send out a request for proposals from EMT and MMT providers to develop a national platform that would be designed to specifically meet the needs of the country’s cash-based economy and large number of low income unbanked individuals. Paid for by international donors and local entrepreneurs in the field of financial technology, the platform should be affordable and easily accessible for all.

Establish a council for all EMT and MMT regulations. With the field of financial technology constantly evolving, a council should be established to monitor and address all issues related to EMT or MMT, as well develop further reforms that are needed to keep the BDL up-to-date on emerging services. The council should include both public and private representatives – not just those in the financial sector – and would help develop proper criteria for licensing, as well as provide opportunities for EMT and MMT businesses to share innovations to reform regulations.

Policymakers

Make EMT and e-commerce a defining part of Lebanon’s economy. The last 20 years have been characterised, in part, by a lack of coherent strategic planning and a failure to adapt the Lebanese
financial regulatory framework to the opportunities presented by modern financial technology. An e-commerce national action plan would give policy makers and the private sector the chance to present a coherent, forward-looking set of policies aimed at boosting financial technology start-ups, including those that provide EMT services. Additionally, policymakers should introduce policies that foster home-grown Lebanese EMT companies, and provide regulations that protect rather than deter these companies from operating in Lebanon.

The Ministry of Economy and Trade Consumer Protection Directorate — which aims “to attain  modern consumer protection framework in Lebanon that safeguards consumers’ interests” — should also work to uphold standards by taking up its role as the protector of consumer welfare and push for modernised legislation that informs and protects consumers.⁵⁷

 Open up the market for international companies to perform direct carrier billing services and provide unbanked people in Lebanon with alternative forms of money transfers.⁵⁸ Direct carrier billing services in particular would allow unbanked people to directly charge their payments and bills to their phone bundle, instead of having to link a bank account to their mobile application.

Banks and Financial Institutions

Reduce excessively high transfer fees at banks, abide by mid-market rates, and further develop services on the online banking applications for mobile phones. Banks and financial institutions will need to come to terms with the fact that they cannot continue to rely on exorbitant fees and commissions to drive non-interest revenue. Instead, these financial institutions will need to offer rates that are competitive and comparable to those offered by modern EMT service providers, while also improving their own services to increase financial inclusion through EMT market penetration.

This process will not only entail reducing fees, but also time constraints, and physical presence at the bank. If banks wish to keep pace with the fast developing FinTech sector, they should take an active role in FinTech startup investment. Banks should consider a range of investment models from debt to equity, as well as partnership strategies to help spur a sector that is in their intrinsic interest.⁵⁹

 Civil Society

Launch a campaign to bring modern EMT into the Lebanese market. Civil society actors who advocate for consumer welfare will need to create momentum for policy makers to support the rights of the Lebanese to access modern EMT services and not continue to be excluded from the global market. The campaign should have clear demands (outlined above) and lobby for clear statements from international companies explaining why they continue to avoid entering the Lebanese market so that these gaps can be addressed. To do so, a coalition of Lebanese consumer rights organisations, digital rights campaigners, media, and amenable public officials is recommended.

Lebanese consumers

Before making money transfers, research the rates offered by banks and other non-banking services such as Western Union. Charges will depend both on the amount of money being transferred as well as the currency it is transferred in. For example, sending USD 500 with Western Union would be less costly than sending it through a traditional bank – saving you up to USD 14 per transfer.⁶⁰

 If you’re lucky enough to own an overseas bank account, consider setting up an account with a mobile payment app such as TransferWise or Revolut. These apps allow you to send and receive money at extremely competitive rates, although they do not currently allow you to transfer money into them from a Lebanese bank account.

EDITOR’S NOTES

This policy paper is the result of research and writing by Justine Stievenard and Gina Barghouti.
Editing support was also provided by Charlie Lawrie, Sami Halabi and Paul Cochrane.

REFERENCES

1. In 2017, the Pew Research Center survey found that the number of smartphone users in Lebanon reached 80% of total phone users, an increase of 28% since 2015. See: Jacob Poushter, Caldwell Bishop and Hanyu Chwe, “Social Media Use Continues to Rise in Developing Countries but Plateaus Across Developed Ones Digital divides remain, both within and across countries” Pew Research Center, 2018.Available at: http://assets.pewresearch.org/wp-content/uploads/sites/2/2018/06/15135408/Pew-Research-Center_Global-Tech-Social-Media-Use_2018.06.19.pdf
   According to GSMA 2017 report on the Mobile Economy in Middle East and North Africa, by mid-2017, there were 365 million unique smartphone subscribers across the Middle East and North Africa (MENA) region, accounting for 63% of the population. GSM Association, “Mobile Economy in Middle East and North Africa”, GSMA, 2017. Available at: https://www.gsma.com/r/mobileeconomy/mena/
2. Banque du Liban, Complete list of Banks. Available at: www.bdl.gov.lb/downloads/download/82/en , and Association of Banks In Lebanon (ABL), List of commercial Banks. Available at: http://www.abl.org.lb/Banksclassification.aspx?pageID=129&type=Commercial
3. A financial institution is a company engaged in the business of dealing with financial and monetary transactions, such as deposits, loans, investments and currency exchange. Financial institutions encompass a broad range of business operations within the financial services sector, including trust companies, insurance companies, brokerage firms and investment dealers.
4. Western Union, “Price estimator”, Western Union, 2019. Available at: https://www.westernunion.com/us/en/price-estimator/continue.html
5. Western Union charges up to $100 for a maximal money transfers of $7500, and MoneyGram charges up to $200 for a maximal money transfers of $10,000. See: OMT, “Western Union International Price List”, Online Money Transfer, 2019.
   Available at: https://www.omt.com.lb/en/services/money-transfer/western-union-international-money-transfer/price-list and MoneyGram, “Estimate payment options”, MoneyGram, 2019. Available at: https://secure.moneygram.com/mgo/us/en/estimate/payment-options
6. PayPal, “PayPal Fees”, PayPal, 2019. Available at: https://www.paypal.com/us/webapps/mpp/paypal-fees
7. Hidden Fees are additional costs to a service that are not advertised clearly beforehand, but are added to the final cost of a service.
8. OMT, “Western Union International Price List”, Online Money Transfer, 2019.
   Available at: https://www.omt.com.lb/en/services/money-transfer/western-union-international-money-transfer/price-list
   TransferWise, “Pricing page calculator”, TransferWise, 2019. Available at: https://transferwise.com/pricing/gbp-to-eur#/pricing-page-calculator-anchor
9. According to the World Bank, the remittance inflows for Lebanon is $7.9 billion in 2017. World Bank, “Lebanon Country Report 2017”, the World Bank Data, 2017. Available at: https://data.worldbank.org/country/lebanon?view=chart
10. Association of Banks in Lebanon (ABL), “Annual Report 2017”, Statistical Tables, 2017.
    Available at:  http://www.abl.org.lb/Library/Files/Files/REP%202017%20PART5%20Eng%20.pdf
11. Bank Audi, “Terms and Conditions of Operations”, Bank Audi, 2019.
    Available at:  http://www.bankaudi.com.lb/Library/Assets/General%20KFS%20-%20Operations%20Eng.pdf
12. Blom Bank, “Commissions and Charges” Blom Bank, 2019. https://www.blombank.com/Library/Files/Commissions-and-Charges-Apr2018.pdf
13. Byblos Bank, “Fees and Commissions” Byblos Bank, 2019. https://www.byblosbank.com/ContentFiles/5085PDF.pdf
14. Bank Med, “Commissions and Fees” Bank Med, 2019. https://www.bankmed.com.lb/resources/files/Commissions-Fees.pdf
15. OMT, “Western Union International Price List”, Online Money Transfer, 2019.
    Available at: https://www.omt.com.lb/en/services/money-transfer/western-union-international-money-transfer/price-list
16. https://www.westernunion.com/us/en/send-money/app/start
17. OMT, “Western Union International Price List”, Online Money Transfer, 2019.
    Available at: https://www.omt.com.lb/en/services/money-transfer/omt-intra-local-money-transfer/price-list
18. MoneyGram, “Estimate Transaction Information”, MoneyGram, 2019.
    Available at https://secure.moneygram.com/embed/estimate/transaction-information
19. Data retrieved from: https://brite.blominvestbank.com/
20. Yehia Amin, “As e-commerce slowly grows in region, Lebanon lags behind”, An-Nahar, 05/03/2017. Available at: https://en.annahar.com/article/575838-as-ecommerce-slowly-grows-in-the-region-lebanon-lags-behind
21. Wamda – Payfort “State of Fintech in MENA: Unbundling the financial services industry”, Wamda, 2017. Available at: https://www.wamda.com/research/fintech-mena-unbundling-financial-services-industry
22. OFX, “Send Money” in Egypt, OFX, 2019. Available at:https://www.ofx.com/en-au/send-money/egypt/
23. TransferWise, “Pricing page calculator”, TransferWise, 2019. Available at: https://transferwise.com/pricing/gbp-to-eur#/pricing-page-calculator-anchor
24. PayPal, “PayPal Account: to receive and withdraw payments”, PayPal, 2019. Available at: https://www.paypal.com/eg/webapps/mpp/setup-to-receive-withdraw
25. Wamda – Payfort “State of Fintech in MENA: Unbundling the financial services industry”, Wamda, 2017. Available at: https://www.wamda.com/research/fintech-mena-unbundling-financial-services-industry
26. Yehia Amin, “As e-commerce slowly grows in region, Lebanon lags behind”, An-Nahar, 05/03/2017. Available at:https://en.annahar.com/article/575838-as-ecommerce-slowly-grows-in-the-region-lebanon-lags-behind
27. See PayPal’s official website for the list of countries PayPal operates in. Available at: https://www.paypal.com/en/webapps/mpp/country-worldwide
28. According to PayPal: “Governing bodies often have regulations and financial sanctions in place that prohibit transactions with certain high-risk countries. In most cases, the processing bank will decline transactions that originate from these countries. In the rare instance that the processing bank authorizes the transaction, the funding bank will prevent it from settling, and Braintree will let you know. The restricted countries vary depending on the country where your business is domiciled. In the US, you can generally expect that payments will not be accepted from the following countries.
    See PayPal’s prohibited countries’ list: https://www.paypal.com/us/webapps/mpp/bigcommerce/security/prohibited-countries
29. The terminology is in accordance Office of Foreign Asset Control regulations for Lebanon as of 2010 – dictated under the 2007 US presidential Executive Order 13411. See: U.S. Treasury, “Sanctions”, 2019. Available at: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/lebanon.pdf and Executive Order 13411 Available at: https://www.treasury.gov/resource-center/sanctions/Documents/13441.pdf
30. Cochrane, Paul, Money Service Businesses. MoneyLaunderingBulletin.com [Unpublished]
31. Cairo Amman Bank “Cairo Amman Bank Introduces PayPal services to Promote Electronic Commerce in Jordan.” CAB, 23/04/2014. Available at: https://www.cab.jo/news/cairo-amman-bank-introduces-paypal-services-promote-electronic-
32. Priya Virthani, “Partnerships between Jordan’s Central Bank and the private sector are integral to financial inclusion.”, Wamda. 2017.
    Available at: https://www.wamda.com/2017/11/partnerships-jordans-central-bank-private-sector-integral-financial-inclusion
33. ProgressSoft “JoMoPay, ProgressSoft’s Model on Mobile Payments Interoperability in Jordan”, ProgressSoft, 2017. Available at: https://www.progressoft.com/news/jomopay-progresssoft-model-on-mobile-payments-interoperability-in-jordan
34. The BDL has regulatory and oversight powers over payment systems and instruments as established by Law 133/1999. The role of the BDL is articulated in the Code of Money and Credit which dates from 1963, covering the BDL functions to: a) develop and regulate payment systems, b) develop and regulate payment transfers, including electronic transfers; and, c) develop and regulate clearing and settlement for both payments and financial instruments.
35. Banque du Liban, Intermediate Circular No. 498 Addressed to Banks, Financial Institutions and all Institutions specified in “Article 4 of Law No. 44”, 24 November 2015 (Fighting Money Laundering and Terrorist Financing). Available at: https://www.bdl.gov.lb/files/circulars/int498_en.pdf and https://www.sic.gov.lb/
36. Banque du Liban, Basic Decision No. 7548, “Article 9bis”, 2000. Available at: http://www.bdl.gov.lb/circulars/download/17/en
37. Beyond the requirements imposed on all financial institutions by Basic Decision 7548, the only specific requirement for Lebanese banks stipulated by BDL is to perform EMTs through a highly regulated and secure conventional network such as the SWIFT network.
38. Banque du Liban, Basic Decision No. 7548, “Article 1”, 2000. Available at: https://www.bdl.gov.lb/circulars/download/17/en
39. Banque du Liban, Basic Decision No. 7548, “Article 1”, 2000. Available at: http://www.bdl.gov.lb/circulars/download/17/en
40. Melissa Murray, “Electronic Payment Systems Regulations in the UAE”, Two Birds, 2017.
    Available at: https://www.twobirds.com/en/news/articles/2017/global/electronic-payment-systems-regulations
41. PinPay is registered on the Beirut Commercial Registry Number 1008455; and governed by the Central Bank of Lebanon under decision number 20/35/12 dated 14/11/2012.
42. Banque Du Liban, “Law No.81 Relating to Electronic Transactions and Personal Data”, SMEX:“(…) . Available at: https://smex.org/an-ugly-new-data-protection-law-in-lebanon/
43. Banque Du Liban “Law No.81 Relating to Electronic Transactions and Personal Data”, Article 41, SMEX:“(…) bank(s), financial institution(s) or any institution (have to be) legally authorized or licensed by Banque du Liban to perform an electronic payment operation, electronic money transfer or credit push/debit pull payments (…).”. Article 42 “when the institutions, referred to in Article (41) herein perform electronic payments or money transfers, they shall make sure that such transactions comply with the applicable laws and Banque Du Liban regulations.
    Available at: http://smex.org/wp-content/uploads/2018/10/E-transaction-law-Lebanon-Official-Gazette_ENGLISH.pdf
44. Banque du Liban, Basic Decision No. 7548, “Article 3 Provisions of Paragraph 1 of Article 2”, 2000. Available at: http://www.bdl.gov.lb/circulars/download/17/en
45. To simply be eligible for a license, an EMT service provider needs a minimum capital of $3.5 million for domestic EMTs and a minimum capital of $500,000 for international EMTs.
46. Banque du Liban, Basic Decision No. 7818: Regulations on the Control of Financial and Banking Operations for Fighting Money Laundering and Terrorist Financing, “Article 5” and “Article 7”, 2001. Available at: http:http://www.bdl.gov.lb/circulars/download/17/en
47. Banque du Liban, Basic Decision No. 7548, “Articles 12 to 24” Documents required for a license, 2000. Available at: http://www.bdl.gov.lb/circulars/download/17/en
48. Priya Virthani, “Partnerships between Jordan’s Central Bank and the private sector are integral to financial inclusion.”, Wamda. 2017. Available at: https://www.wamda.com/2017/11/partnerships-jordans-central-bank-private-sector-integral-financial-inclusion
49. Priya Virthani, “Partnerships between Jordan’s Central Bank and the private sector are integral to financial inclusion.”, Wamda. 2017. Available at: https://www.wamda.com/2017/11/partnerships-jordans-central-bank-private-sector-integral-financial-inclusion
50. Thebes Consultancy, the Center for International Private Enterprise, the Federation of Egyptian Banks and the Federation of Egyptian Industries, “Facilitating Bank Account Transactions: A step towards financial inclusion in Egypt” Policy Recommendations, 2017. Available at:https://www.cipe-arabia.org/files/pdf/Democratic_Governance/Banks_Accounts_for_Financial_Inclusion_English_WEB.pdf
51. Thebes Consultancy, the Center for International Private Enterprise, the Federation of Egyptian Banks and the Federation of Egyptian Industries, “Facilitating Bank Account Transactions: A step towards financial inclusion in Egypt” Policy Recommendations, 2017. Available at: https://www.cipe-arabia.org/files/pdf/Democratic_Governance/Banks_Accounts_for_Financial_Inclusion_English_WEB.pdf
52. Wamda – Payfort, “State of Fintech in MENA: Unbundling the financial services industry”, Wamda, 2017. Available at: https://www.wamda.com/research/fintech-mena-unbundling-financial-services-industry
53. On 1 January 2017, the UAE Central Bank issued the Regulatory Framework For Stored Values and Electronic Payment Systems (‘the e-Payment Regulation’), with the main aim of facilitating the adoption of safe, secure, ‘user-centric’ digital payments in the UAE and regulating the digital payments infrastructure and other financial technologies. See: Jayshree Gupta, “A guide to the UAE’s e-payment regulation”, Thomson Reuters Zawya, 04/27/2017.
    Available at https://www.zawya.com/mena/en/story/A_guide_to_the_UAEs_epayment_regulation-ZAWYA20170427113904/
54. Figures issued by the World Bank show that only 47 percent of Lebanese over the age of 15 had an individual or a joint account at a formal financial institution at the end of 2014. World Bank, “Lebanon”, the World Bank Data, 2014. Available at: https://data.worldbank.org/country/lebanon?view=chart
55. By comparison, during the five-year period (2011-2015) the UAE an increased e-payment usage creating the equivalent of 14,170 jobs in the UAE per year during that period, according to the Wamda-Payfort report of 2017 on the state of fintech in the MENA region. See: Wamda – Payfort, “State of Fintech in MENA: Unbundling the financial services industry”, Wamda, 2017. Available at: https://www.wamda.com/research/fintech-mena-unbundling-financial-services-industry”
56. Jayshree Gupta, “A guide to the UAE’s e-payment regulation”, Thomson Reuters Zawya, 04/27/2017. Available at https://www.zawya.com/mena/en/story/A_guide_to_the_UAEs_epayment_regulation-ZAWYA20170427113904/
57. Republic of Lebanon, Ministry of Economy and Trade, “Consumer Protection”, Services, Available at: https://www.economy.gov.lb/en/services/consumer-protection
58. Figures issued by the World Bank show that only 47 percent of Lebanese over the age of 15 had an individual or a joint account at a formal financial institution at the end of 2014. World Bank, “Lebanon”, the World Bank Data, 2014. Available at: https://data.worldbank.org/country/lebanon?view=chart
59. Invest in Lebanon (IDAL), “Fintech Sector in Lebanon”, 2017 Factsheet, 2017. Available at: http://www.databank.com.lb/docs/FINTECH%20Lebanon%20IDAL%202017.pdf
60. See Table 1 – Comparison of costs associated with incoming and outgoing domestic and international EMTs in Lebanon (fees in USD, LBP + exchange rates for other currencies).
61. Brian Edgmon, “What is an ACH Payment?” Acom Solutions, 2017. Available at: https://acom.com/what-is-an-ach-payment/