National Payments System Vision and Strategy Framework 2026-2030

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20262030

Blantyre, Malawi March 2026

ACRONYMS

ACH Automated Clearing House Acronyms Anti-Money Laundering / Countering the Financing of Terrorism / AML/CFT/CPF Counter-Proliferation Financing CEIR Central Equipment Identity Register CFTC Competition and Fair-Trading Commission (Malawi) COMESA Common Market for Eastern and Southern Africa CPMI Committee on Payments and Market Infrastructures CSD Central Securities Depository DFS Digital Financial Services DRPP Digital Regional Payment Platform (COMESA) EFT Electronic Funds Transfer e-KYC Electronic Know Your Customer ESG Environmental, Social, and Governance FIA Financial Intelligence Authority G2P Government-to-Person IOSCO International Organization of Securities Commissions MACRA Malawi Communications Regulatory Authority MITASS Malawi Interbank Transfer and Settlement System MNO Mobile Network Operator NePG National e-Payments Gateway NPC National Payments Council NRIS National Registration and Identification System NPS National Payments System

PAPSS Pan-African Payment and Settlement System PCI DSS Payment Card Industry Data Security Standard PFMI Principles for Financial Market Infrastructures VASP Virtual Asset Service Provider P2G Person-to-Government B2P Business-to-Person RTGS Real-Time Gross Settlement SADC Southern African Development Community NTEP National Taskforce on Electronic Payments P2B Person-to-Business PSP Payment Service Provider RBM REPSS COMESA Regional Payment and Settlement System POS Point-of-Sale PSA Payment Systems Act, 2016

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NTEP National Taskforce on Electronic Payments P2B Person-to-Business P2G Person-to-Government B2P Business-to-Person PAPSS Pan-African Payment and Settlement System PCI DSS Payment Card Industry Data Security Standard PFMI Principles for Financial Market Infrastructures POS Point-of-Sale PSA Payment Systems Act, 2016 PSP Payment Service Provider RBM Reserve Bank of Malawi REPSS COMESA Regional Payment and Settlement System RTGS Real-Time Gross Settlement SADC Southern African Development Community VASP Virtual Asset Service Provider

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GOVERNOR'S FOREWORD

he continued evolution of TMalawi's National Payments System (NPS) is central to shaping a financial landscape that actively supports our nation's development aspirations under Malawi Vision 2063. As digital finance continues to transform economies worldwide, the Reserve Bank of Malawi (RBM) is firmly committed to positioning the country as a leader in financial innovation, one that ensures the payments ecosystem remains inclusive, secure, and efficient for all Malawians. Over the years, the RBM has led essential reforms to enhance the safety, efficiency, and accessibility of payment services. These include improvements Nonetheless, persistent in system interoperability, the adoption

challenges, including of real-time settlement capabilities, and

the progressive strengthening of our high transaction costs, regulatory framework. According to the cybersecurity threats, Finscope Survey 2023, the proliferation

infrastructure gaps, and of mobile money services has been

particularly transformative, driving the continued dominance financial inclusion to 88 percent of the of cash, demand a forward-adult population by 2023. Nonetheless, looking and coordinated persistent challenges, including high transaction costs, cybersecurity threats, response. infrastructure gaps, and the continued

dominance of cash, demand a forward- across government agencies, financial looking and coordinated response. institutions, payment service providers, mobile network operators, civil society, and This National Payments System Vision and development partners. I am confident that, Strategy Framework for 2026 to 2030 (the 2030 with this collective commitment, Malawi will Framework) builds on these achievements to achieve a robust, seamless, and innovative chart a deliberate and ambitious course for payments ecosystem capable of propelling the next phase of reform. It articulates five inclusive economic growth. strategic objectives focused on strengthening regulatory oversight, modernising payment The Reserve Bank of Malawi reaffirms its infrastructure, mitigating cyber and fraud commitment to leading this transformation risks, fostering digital adoption, and with prudence, and a steadfast focus on embracing emerging financial technologies, the public interest. The 2030 Framework including central bank digital currency, open reflects our resolve to ensure that Malawi's finance, virtual assets, and green financing. payment systems are future-ready, resilient, Together, these objectives are designed to and anchored to the highest international deliver a payments ecosystem that is not standards. only aligned with global standards but is also deeply responsive to the needs of Malawi's evolving economy. Dr. George PartridgeThe successful implementation of this Governor, Reserve Bank of MalawiFramework will require sustained collaboration

EXECUTIVE SUMMARY

The National Payments System Vision and Strategy Framework for 2026 to 2030 (the 2030

1. Strengthen integration with regional and cross-border payment systems to enhance Framework) provides a structured and forward-looking roadmap for transforming Malawi's Executive Summary interoperability, deepen financial inclusion, and support Malawi's economic payments ecosystem. The Framework is designed to deliver a system that is secure,
   integration within the SADC, COMESA and other strategic regions. efficient, digitally advanced, and fully aligned with Malawi Vision 2063, which prioritises innovation, economic resilience, and financial inclusion. Implementation will be led by the RBM in close collaboration with the National Payments Council, Government, payment service providers, other regulatory authorities, and Building on the achievements of the previous strategy period, including the enactment of the development partners. The Framework prioritises stakeholder collaboration, prudent Payment Systems Act (2016), the rapid growth of mobile money, and Malawi's integration resource allocation, and robust performance monitoring to ensure that progress remains into regional payment networks, this Framework candidly acknowledges the challenges that aligned with the overall vision and responsive to an evolving payments landscape. remain, namely high transaction costs, fraud risks, infrastructure deficits, and low adoption of digital payment instruments, and proposes a targeted programme of reform to address Ultimately, this Framework sets Malawi on a deliberate trajectory towards a more innovative, them. inclusive, and resilient national payments system, one that not only meets the evolving needs of consumers and businesses but also actively contributes to sustainable economic The 2030 Framework is structured around five strategic objectives: growth and the attainment of Malawi Vision 2063.

2. Strengthen and modernise the regulatory framework to support innovation while
   enhancing security, consumer protection, and full compliance with international best practices, including the Principles for Financial Market Infrastructures (PFMI) and the Payment Card Industry Data Security Standard (PCI DSS). ii. Upgrade and enhance national payment infrastructure, encompassing the modernisation of the Malawi Interbank Transfer and Settlement System (MITASS), migration to the ISO 20022 messaging standard, deployment of the National e- Payments Gateway (NePG), and implementation of an electronic Know Your Customer (e-KYC) platform.

3. Promote digital financial services adoption and usage by phasing out cheque-based
   transactions, reducing the cost of digital payments, and accelerating the transition to electronic money instruments.

4. Explore and pilot emerging technologies and financial innovations, including open
   finance, central bank digital currencies (CBDCs), virtual assets, and green financing mechanisms.

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interoperability, deepen financial inclusion, and support Malawi's economic integration within the SADC, COMESA and other strategic regions.

1. Strengthen integration with regional and cross-border payment systems to enhance Implementation will be led by the RBM in close collaboration with the National Payments Council, Government, payment service providers, other regulatory authorities, and development partners. The Framework prioritises stakeholder collaboration, prudent resource allocation, and robust performance monitoring to ensure that progress remains aligned with the overall vision and responsive to an evolving payments landscape. Ultimately, this Framework sets Malawi on a deliberate trajectory towards a more innovative, inclusive, and resilient national payments system, one that not only meets the evolving needs of consumers and businesses but also actively contributes to sustainable economic growth and the attainment of Malawi Vision 2063.

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1.0 INTRODUCTION

The National Payments System (NPS) plays a foundational role in facilitating economic Through this Framework, the RBM aims to advance the reform of the country's payments activity, maintaining financial stability, and supporting national development objectives. The 1.0 Introduction infrastructure, promote DFS, and deepen the interoperability of payment systems. The RBM Reserve Bank of Malawi (RBM) derives its mandate to regulate and oversee payment, will work in close partnership with all stakeholders across the payments ecosystem to ensure clearing, and settlement systems from the Reserve Bank of Malawi Act, 2018, and the that the NPS remains aligned with domestic policy objectives, global standards, and Payment Systems Act, 2016 (PSA). This mandate is exercised to promote the safety, prevailing best practices. efficiency, and reliability of the NPS in a manner that is commensurate with the demands of a dynamic and increasingly digital economy. The NPS Vision and Strategy Framework for 2026 to 2030 (the 2030 Framework) builds upon the achievements recorded under the previous NPS strategy for the period 2013 to

1. Key milestones from that period include the enactment of the PSA and its subsidiary legislation, the implementation of a fully integrated Automated Transfer System (ATS) and National Switch to facilitate the interoperability of digital payment services, and the introduction and rapid proliferation of mobile money services. In addition, the RBM led the implementation of awareness initiatives to promote the adoption and usage of digital financial services (DFS) in collaboration with industry stakeholders through the National Taskforce on Electronic Payments (NTEP). These efforts have yielded significant improvements in both the accessibility and utilisation of DFS across the country. On the regional front, Malawi joined the SADC Real-Time Gross Settlement system (SADC RTGS) in 2014 and the COMESA Regional Payment and Settlement System (REPSS) in 2013, followed by the Pan-African Payment and Settlement System (PAPSS) in 2023. These memberships have meaningfully enhanced Malawi's capacity for regional and continental trade by enabling more efficient, secure, and cost-effective cross-border fund transfers. Nonetheless, a number of challenges persist, including infrastructure deficits, elevated transaction costs, continued reliance on cash and cheque instruments, cybersecurity threats, and relatively low adoption of digital payment channels. The 2030 Framework responds to these challenges by anchoring its design on sustainable innovation, cybersecurity resilience, strengthened stakeholder collaboration, and a robust and adaptive regulatory framework, all oriented towards advancing financial inclusion and supporting broad-based economic growth.

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infrastructure, promote DFS, and deepen the interoperability of payment systems. The RBM will work in close partnership with all stakeholders across the payments ecosystem to ensure that the NPS remains aligned with domestic policy objectives, global standards, and Through this Framework, the RBM aims to advance the reform of the country's payments prevailing best practices.

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2.0 VISION STATEMENT

3.0 The Payments System Landscape in Malawi

The vision for the National Payments System Strategy for 2026 to 2030 is to: 3.1 Legal Framework The RBM derives its mandate to regulate and oversee payment, clearing, and settlement

Continuously evolve as a forward-looking systems from the Reserve Bank of Malawi Act, 2018, and the Payment Systems Act, 2016

(PSA). The enactment of the PSA constituted a pivotal reform in the payments ecosystem, central bank by building an enabling providing clear statutory authority for the Bank's oversight of payment, clearing, and digital payments ecosystem that delivers settlement systems. This was complemented in 2017 by the issuance of the Payment transformative financial services, responds Systems (Interoperability of Retail Payment Systems) Directive, which mandated the

to evolving economic needs, supports Malawi interoperability of DFS through the National Switch. Vision 2063, and enhances financial inclusion for In 2019, the RBM issued the Payment Systems (e-Money) Regulations, which govern the all Malawians.operations of e-money issuers. In the same year, the Minister of Trade and Industry, in

liaison with the RBM and the Malawi Revenue Authority (MRA), issued the Business Licensing (Deployment and Usage of Electronic Payment Channels) Regulations, which require businesses to deploy at least one digital payment channel, thereby enhancing convenience for customers wishing to transact electronically. 3.2 Payment Infrastructure Malawi's payments landscape encompasses both wholesale and retail systems, broadly corresponding to systemically important and non-systemically important payment systems, respectively. Wholesale systems are classified as systemically important owing to the high- value, time-critical nature of the transactions they process and their essential role in maintaining financial stability. Retail systems, while typically handling lower-value transactions, play an equally vital role in driving financial inclusion and broadening economic participation. 3.2.1 Systemically Important Payment Systems Systemically important payment systems (SIPS) are those whose failure or disruption could pose material risks to the stability of the financial system. In Malawi, the primary systemically

2.0 Vision Statement important infrastructure is the Malawi Interbank Transfer and Settlement System (MITASS).

The National Switch also occupies an increasingly critical role in supporting interoperability and high-volume retail payments, connecting the broader payments ecosystem. "Continuously evolve as a forward-looking central bank by building an Reserve Bank of Malawi | Confidential 11 enabling digital payments ecosystem that delivers transformative financial services, responds to evolving economic needs, supports 3.0 THE PAYMENTS SYSTEM LANDSCAPE IN MALAWI Malawi Vision 2063, and enhances financial inclusion for all Malawians." 3.1 Legal Framework

3.0 The Payments System Landscape in Malawi The RBM derives its mandate to regulate and oversee payment, clearing, and settlement

systems from the Reserve Bank of Malawi Act, 2018, and the Payment Systems Act, 2016 (PSA). The enactment of the PSA constituted a pivotal reform in the payments ecosystem, providing clear statutory authority for the Bank's oversight of payment, clearing, and settlement systems. This was complemented in 2017 by the issuance of the Payment Systems (Interoperability of Retail Payment Systems) Directive, which mandated the interoperability of DFS through the National Switch. In 2019, the RBM issued the Payment Systems (e-Money) Regulations, which govern the operations of e-money issuers. In the same year, the Minister of Trade and Industry, in liaison with the RBM and the Malawi Revenue Authority (MRA), issued the Business Licensing (Deployment and Usage of Electronic Payment Channels) Regulations, which require businesses to deploy at least one digital payment channel, thereby enhancing convenience for customers wishing to transact electronically. 3.2 Payment Infrastructure Malawi's payments landscape encompasses both wholesale and retail systems, broadly corresponding to systemically important and non-systemically important payment systems, respectively. Wholesale systems are classified as systemically important owing to the high- value, time-critical nature of the transactions they process and their essential role in maintaining financial stability. Retail systems, while typically handling lower-value transactions, play an equally vital role in driving financial inclusion and broadening economic participation. 3.2.1 Systemically Important Payment Systems

Reserve Bank of Malawi | Confidential 10 Systemically important payment systems (SIPS) are those whose failure or disruption could

pose material risks to the stability of the financial system. In Malawi, the primary systemically important infrastructure is the Malawi Interbank Transfer and Settlement System (MITASS). The National Switch also occupies an increasingly critical role in supporting interoperability and high-volume retail payments, connecting the broader payments ecosystem.

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3.2.1.1 The Malawi Interbank Transfer and Settlement System (MITASS) MITASS is the backbone payments infrastructure of Malawi, owned and operated by the Reserve Bank of Malawi. Established in 2002 and subsequently upgraded to a fully integrated Automated Transfer System (ATS) in December 2014, MITASS comprises three economy. Launched in 2015, the National Switch facilitates interoperability among diverse core components: the Automated Clearing House (ACH), which processes cheques and payment service providers (PSPs), enabling seamless transactions across different electronic funds transfers (EFTs); the Real-Time Gross Settlement (RTGS) system; and the platforms, including ATM, Point-of-Sale (POS), and mobile payment channels. Central Securities Depository (CSD). The annual volume and value of transactions processed through the National Switch have MITASS has been instrumental in advancing transaction activity within the national payment increased substantially from 0.44 million transactions valued at K7.4 billion in 2015 to 72.75 ecosystem, with transaction volumes rising by 25,755 percent from 32,049 million in 2002 million transaction value at K13.9 trillion in 2025, respectively (Chart 2). This represents a to 8.28 billion in 2025. Over the same period, the value of transactions surged by 37,671 significant milestone and underscores the sustained growth in the adoption and usage of percent, increasing from MK503.0 billion to MK188.99 trillion (Chart 1) interoperable payment services. Chart 1: Trend in MITASS Utilisation Chart 2: Trend in Utilisation of the National Switch 200 9 180 8 160 7 140 6 120 5 100 4 80 3 Value (K'trillions) 60 2 40 1 20 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

3.2.2 Non-Systemically Important Payment Systems

16000 80 14000 70 Malawi's retail payments landscape is underpinned by a range of non-systemically important 12000 60 payment systems, including mobile money, POS terminals, mobile banking, and internet 3.2.1.2 The National Switch 10000 50 banking. These systems have experienced remarkable growth and have materially 8000 40 The National Switch is designated as a systemically important payment system, given its expanded access to financial services, particularly in rural and underserved communities. 6000 30Value (K'billions) critical role in facilitating electronic payments and settlements within the country's financial Mobile money has emerged as the foremost enabler of financial inclusion: according to the 4000 20 system. Its disruption could have far-reaching consequences across multiple sectors of the FinScope Consumer Survey 2023, overall financial inclusion rose from 45.0 percent in 2008 2000 10

to 88.0 percent in 2023, with mobile money accounting for 69.0 percent of the included

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

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payment service providers (PSPs), enabling seamless transactions across different platforms, including ATM, Point-of-Sale (POS), and mobile payment channels. economy. Launched in 2015, the National Switch facilitates interoperability among diverse The annual volume and value of transactions processed through the National Switch have increased substantially from 0.44 million transactions valued at K7.4 billion in 2015 to 72.75 million transaction value at K13.9 trillion in 2025, respectively (Chart 2). This represents a significant milestone and underscores the sustained growth in the adoption and usage of interoperable payment services. Chart 2: Trend in Utilisation of the National Switch

16000 80 14000 70 12000 60 10000 50 8000 40 306000Value (K'billions) 4000 20 2000 10 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

3.2.2 Non-Systemically Important Payment Systems Malawi's retail payments landscape is underpinned by a range of non-systemically important payment systems, including mobile money, POS terminals, mobile banking, and internet banking. These systems have experienced remarkable growth and have materially expanded access to financial services, particularly in rural and underserved communities. Mobile money has emerged as the foremost enabler of financial inclusion: according to the FinScope Consumer Survey 2023, overall financial inclusion rose from 45.0 percent in 2008 to 88.0 percent in 2023, with mobile money accounting for 69.0 percent of the included

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DFS transaction volumes grew significantly from 4.8 million in 2012 to 2.5 billion in 2025. Over the same period, the corresponding transaction values increased from MK65.6 billion to MK65.5 trillion (Chart 3). 3.3 Other Developments and Achievements Chart 3: Growth in Digital Financial Services Transactions In addition to infrastructure developments, the following key achievements have contributed 3.3 Other Developments and Achievements to the advancement of the NPS: 70 3000

60 2500In addition to infrastructure developments, the following key achievements have contributed a. National Taskforce on Electronic Payments (NTEP): Established in 2015 and 50 2000to the advancement of the NPS: chaired by the RBM, the NTEP coordinates activities to increase the adoption and 40 1500usage of electronic payments. Its membership encompasses the Ministry of Finance 30a. National Taskforce on Electronic Payments (NTEP): Established in 2015 and

(through the Accountant General's Office), the Ministry of Civic Education, Culture 100020chaired by the RBM, the NTEP coordinates activities to increase the adoption and and Community Development, the Bankers Association of Malawi, mobile money Value (K'trillions) 50010usage of electronic payments. Its membership encompasses the Ministry of Finance operators, the Financial Intelligence Authority (FIA), the Competition and Fair-Trading

0 0(through the Accountant General's Office), the Ministry of Civic Education, Culture

Commission (CFTC), the Malawi Communications Regulatory Authority (MACRA), 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 and Community Development, the Bankers Association of Malawi, mobile money

Value of DFS Transactions Volume of DFS Transactionsthe Institute of Chartered Accountants in Malawi, and the Insurance Association of operators, the Financial Intelligence Authority (FIA), the Competition and Fair-Trading

Malawi. Awareness and sensitisation campaigns conducted through NTEP have Commission (CFTC), the Malawi Communications Regulatory Authority (MACRA), demonstrably improved public knowledge and usage of DFS. the Institute of Chartered Accountants in Malawi, and the Insurance Association of Mobile money was the primary driver of this growth, with transaction volumes and values Malawi. Awareness and sensitisation campaigns conducted through NTEP have b. Biometric National Registration and Identification System (NRIS): Malawi's increasing from 698,419 and K1.4 billion in 2012 to 2.4 billion and K37.9 trillion in 2025, demonstrably improved public knowledge and usage of DFS. NRIS was successfully rolled out in 2017. As at August 2024, over 12.3 million respectively. As a result, mobile money accounted for 96.4 percent of Retail DFS transaction persons aged 16 and above had been registered under the system, receiving volumes and 57.8 percent of transaction values (Chart 4). b. Biometric National Registration and Identification System (NRIS): Malawi's biometric identification cards that satisfy minimum identity verification requirements Chart 4: Trend in Mobile Money Usage NRIS was successfully rolled out in 2017. As at August 2024, over 12.3 million for financial service onboarding. The NRIS infrastructure provides a critical foundation persons aged 16 and above had been registered under the system, receiving

40 3000for further accelerating financial inclusion through initiatives such as the electronic

biometric identification cards that satisfy minimum identity verification requirements 35Know Your Customer (e-KYC) platform and the Digital Identity Project, which aim to 2500for financial service onboarding. The NRIS infrastructure provides a critical foundation 30unify and enhance the efficiency of KYC processes across the financial sector. 2000for further accelerating financial inclusion through initiatives such as the electronic 25 Know Your Customer (e-KYC) platform and the Digital Identity Project, which aim to 20 15003.4 Challenges in the Payments System and the Reform Agenda unify and enhance the efficiency of KYC processes across the financial sector. 15 1000 Notwithstanding the notable progress achieved in financial inclusion and digital 10Value (K'trillions) 5003.4 Challenges in the Payments System and the Reform Agenda transformation, Malawi's payment systems continue to face significant challenges that 5

0 0constrain their modernisation and wider adoption. These challenges span infrastructure

Notwithstanding the notable progress achieved in financial inclusion and digital 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025limitations, environmental vulnerabilities, technological threats, and entrenched consumer transformation, Malawi's payment systems continue to face significant challenges that behaviour patterns. constrain their modernisation and wider adoption. These challenges span infrastructure limitations, environmental vulnerabilities, technological threats, and entrenched consumer (i) Infrastructure Challenges behaviour patterns.

1. Power Supply: Reliable electricity is a foundational prerequisite for digital payment
   (i) Infrastructure Challenges systems. In Malawi, inconsistent power supply, particularly in rural areas, frequently

2. Power Supply: Reliable electricity is a foundational prerequisite for digital payment Reserve Bank of Malawi | Confidential 15 Reserve Bank of Malawi | Confidential 14 systems. In Malawi, inconsistent power supply, particularly in rural areas, frequently

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In addition to infrastructure developments, the following key achievements have contributed 3.3 Other Developments and Achievements to the advancement of the NPS: In addition to infrastructure developments, the following key achievements have contributed a. National Taskforce on Electronic Payments (NTEP): Established in 2015 and 3.3 Other Developments and Achievements to the advancement of the NPS: chaired by the RBM, the NTEP coordinates activities to increase the adoption and usage of electronic payments. Its membership encompasses the Ministry of Finance

1. National Taskforce on Electronic Payments (NTEP): Established in 2015 and
   (through the Accountant General's Office), the Ministry of Civic Education, Culture chaired by the RBM, the NTEP coordinates activities to increase the adoption and and Community Development, the Bankers Association of Malawi, mobile money usage of electronic payments. Its membership encompasses the Ministry of Finance operators, the Financial Intelligence Authority (FIA), the Competition and Fair-Trading (through the Accountant General's Office), the Ministry of Civic Education, Culture Commission (CFTC), the Malawi Communications Regulatory Authority (MACRA), and Community Development, the Bankers Association of Malawi, mobile money the Institute of Chartered Accountants in Malawi, and the Insurance Association of operators, the Financial Intelligence Authority (FIA), the Competition and Fair-Trading Malawi. Awareness and sensitisation campaigns conducted through NTEP have Commission (CFTC), the Malawi Communications Regulatory Authority (MACRA), demonstrably improved public knowledge and usage of DFS. the Institute of Chartered Accountants in Malawi, and the Insurance Association of Malawi. Awareness and sensitisation campaigns conducted through NTEP have b. Biometric National Registration and Identification System (NRIS): Malawi's demonstrably improved public knowledge and usage of DFS. NRIS was successfully rolled out in 2017. As at August 2024, over 12.3 million persons aged 16 and above had been registered under the system, receiving

2. Biometric National Registration and Identification System (NRIS): Malawi's
   biometric identification cards that satisfy minimum identity verification requirements NRIS was successfully rolled out in 2017. As at August 2024, over 12.3 million for financial service onboarding. The NRIS infrastructure provides a critical foundation persons aged 16 and above had been registered under the system, receiving for further accelerating financial inclusion through initiatives such as the electronic biometric identification cards that satisfy minimum identity verification requirements Know Your Customer (e-KYC) platform and the Digital Identity Project, which aim to for financial service onboarding. The NRIS infrastructure provides a critical foundation unify and enhance the efficiency of KYC processes across the financial sector. for further accelerating financial inclusion through initiatives such as the electronic Know Your Customer (e-KYC) platform and the Digital Identity Project, which aim to 3.4 Challenges in the Payments System and the Reform Agenda unify and enhance the efficiency of KYC processes across the financial sector. Notwithstanding the notable progress achieved in financial inclusion and digital 3.4 Challenges in the Payments System and the Reform Agenda transformation, Malawi's payment systems continue to face significant challenges that constrain their modernisation and wider adoption. These challenges span infrastructure Notwithstanding the notable progress achieved in financial inclusion and digital limitations, environmental vulnerabilities, technological threats, and entrenched consumer transformation, Malawi's payment systems continue to face significant challenges that behaviour patterns. constrain their modernisation and wider adoption. These challenges span infrastructure limitations, environmental vulnerabilities, technological threats, and entrenched consumer (i) Infrastructure Challenges behaviour patterns. a. Power Supply: Reliable electricity is a foundational prerequisite for digital payment systems. In Malawi, inconsistent power supply, particularly in rural areas, frequently (i) Infrastructure Challenges

3. Power Supply: Reliable electricity is a foundational prerequisite for digital payment Reserve Bank of Malawi | Confidential 15
   systems. In Malawi, inconsistent power supply, particularly in rural areas, frequently disrupts payment platforms, causes system downtimes, and undermines user Reserve Bank of Malawi | Confidential 15 confidence in DFS.

4. Limited Internet Connectivity and Mobile Network Coverage: Low mobile phone
   penetration, inadequate mobile network coverage and poor internet connectivity, inclusion gains achieved through the concerted efforts of Government and regulatory especially in remote areas, limit the accessibility and reliability of digital payment bodies. services and deter adoption in underserved communities. (iv) Failed Transaction Incidences

5. Limited Enabling Infrastructure: The absence of a national e-payments
   infrastructure has impeded interoperability between payment platforms and Technical malfunctions and system outages remain a persistent concern in Malawi's digital government systems. Systems operated by Ministries, Departments, and Agencies payments ecosystem. These failures frequently result in failed transactions and delayed (MDAs) or utility companies do not, as yet, integrate seamlessly with broader refund processing, frustrating users and diminishing confidence in electronic payment payment networks, reducing efficiency and convenience. Additionally, the absence platforms. of a national e-KYC system has led to customer verification processes remaining (v) High Transaction Fees largely manual, resulting in delays and high onboarding costs. The cost of transacting digitally remains a barrier to broader adoption. Many users continue d. Other Infrastructure Constraints: The state of physical infrastructure, including to perceive digital payment channels as comparatively expensive relative to traditional road networks, complicates the deployment and maintenance of POS devices and instruments. Coupled with the high cost of mobile handsets and other digital devices, other payment-related equipment. In addition, the limited availability and high cost of affordability is a critical concern, particularly for low-income consumers. POS terminals and digital devices further restrict access to DFS in less urbanised areas. (vi) Dominance of Cash and Cheques (ii) Climate Change Cash remains the dominant mode of payment in Malawi, largely owing to its immediacy, familiarity, and the perception that it involves no transaction cost. Similarly, many individuals Malawi is increasingly susceptible to climate-related events such as cyclones and flooding. and institutions continue to use cheques for bulk or formal payments. This entrenched These events can severely disrupt telecommunications, electricity supply, and transport preference for traditional payment instruments slows the transition to a digital economy and systems, the key enablers of financial services. Access to essential payment services can impedes efforts to modernise the national payments ecosystem. be curtailed during such disasters, compounding the vulnerability of affected populations. Building climate resilience into the payments infrastructure is therefore a strategic Addressing these multifaceted challenges will require coordinated and sustained efforts imperative. from Government, regulators, financial institutions, telecommunications providers, and development partners to build a robust, inclusive, and resilient digital payments (iii) Cybercrime and Fraud infrastructure. As digital payment adoption accelerates, so too does exposure to cyber threats and fraudulent activities. Rising incidents of cybercrime, including mobile money fraud and identity theft, undermine consumer trust and discourage the use of DFS. These threats also pose material reputational and financial risks to PSPs and threaten to reverse the financial

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bodies. (iv) Failed Transaction Incidences inclusion gains achieved through the concerted efforts of Government and regulatory Technical malfunctions and system outages remain a persistent concern in Malawi's digital payments ecosystem. These failures frequently result in failed transactions and delayed refund processing, frustrating users and diminishing confidence in electronic payment platforms. (v) High Transaction Fees The cost of transacting digitally remains a barrier to broader adoption. Many users continue to perceive digital payment channels as comparatively expensive relative to traditional instruments. Coupled with the high cost of mobile handsets and other digital devices, affordability is a critical concern, particularly for low-income consumers. (vi) Dominance of Cash and Cheques Cash remains the dominant mode of payment in Malawi, largely owing to its immediacy, familiarity, and the perception that it involves no transaction cost. Similarly, many individuals and institutions continue to use cheques for bulk or formal payments. This entrenched preference for traditional payment instruments slows the transition to a digital economy and impedes efforts to modernise the national payments ecosystem. Addressing these multifaceted challenges will require coordinated and sustained efforts from Government, regulators, financial institutions, telecommunications providers, and development partners to build a robust, inclusive, and resilient digital payments infrastructure.

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4.0 STRATEGIC OBJECTIVES

To achieve the vision set out in this Framework, the RBM has identified five strategic objectives that collectively address the critical dimensions of a modern, inclusive, and vii. Outdated provisions governing the application of interest earned on trust accounts 4.0 Strategic Objectives resilient national payments system. Each objective is supported by a set of targeted held by PSPs. initiatives, implementation timelines, and measurable expected outcomes. This strategic objective therefore focuses on evaluating and updating the regulatory 4.1 Strategic Objective One: Strengthen and Modernise the Regulatory Framework framework to ensure it remains robust, proportionate, and aligned with international best 4.1.1 The Current Regulatory Framework practices, while effectively addressing emerging challenges in the payments landscape. Key instruments to be reviewed include the Payment Systems Act, the e-Money Regulations, The existing regulatory framework comprises the Payment Systems Act, 2016 (PSA), the and the Business Licensing (Deployment and Usage of Electronic Payment Channels) Payment Systems (Interoperability of Retail Payment Systems) Directive, 2017, the Regulations. The review will also give particular attention to the licensing framework, Payment Systems (e-Money) Regulations, 2019, and the Business Licensing (Deployment including the development of a Fit and Proper Test Directive and revisions to licensing and Usage of Electronic Payment Channels) Regulations, 2019. While this framework has requirements. Measures to strengthen consumer protection and minimise exploitation will been instrumental in providing a statutory basis for reforms, including expanding PSP entry be incorporated as a core component of this review. The review will also include establishing into the payments market, facilitating retail payment interoperability, and advancing financial the minimum scope and guidelines for the annual payment system audit, reporting inclusion, several gaps have been identified that require attention to further enhance the requirements for PSPs, and regulatory sandbox operations. safety, efficiency, and integrity of the NPS. These include: 4.1.1.1 Implementation Timelines and Expected Outcomes

1. A restrictive licensing and operational regime that constrains the entry of smaller
   players, including start-ups and fintech firms, into the payments market.

2. Insufficient enforcement powers for the RBM to effectively oversee and regulate the
   deployment and usage of electronic payment channels.

3. Limited provisions for protecting consumers from exploitation by PSPs.

4. The absence of adequate fit-and-proper guidelines for assessing the suitability and
   integrity of beneficial owners and controlling officers of PSPs.

5. The absence of a legal mandate for the National Payments Council (NPC), whose
   resolutions currently lack statutory backing.

6. Limited enforcement powers to ensure PSP compliance with applicable legal

7. Initiate a comprehensive review of the Payment Systems Act, its 2026-2027

8. Monitor and evaluate the impact of the revised regulatory framework, 2028-2030 subsidiary legislation, and the Business Licensing (Deployment and 2) Conduct structured stakeholder consultations on draft amendments 2026 -2027 3) Finalise and implement the revised legislation and regulations, 2027-2028
   making further adjustments as necessary to address emerging Usage of Electronic Payment Channels) Regulations to identify areas to the regulatory framework, including engagement with PSPs, ensuring all required approval and promulgation processes are Timelines developments. for improvement and alignment with global standards. FinTech's, consumer bodies, and other relevant authorities. completed.

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held by PSPs.

This strategic objective therefore focuses on evaluating and updating the regulatory vii. Outdated provisions governing the application of interest earned on trust accounts framework to ensure it remains robust, proportionate, and aligned with international best practices, while effectively addressing emerging challenges in the payments landscape. Key instruments to be reviewed include the Payment Systems Act, the e-Money Regulations, and the Business Licensing (Deployment and Usage of Electronic Payment Channels) Regulations. The review will also give particular attention to the licensing framework, including the development of a Fit and Proper Test Directive and revisions to licensing requirements. Measures to strengthen consumer protection and minimise exploitation will be incorporated as a core component of this review. The review will also include establishing the minimum scope and guidelines for the annual payment system audit, reporting requirements for PSPs, and regulatory sandbox operations. 4.1.1.1 Implementation Timelines and Expected Outcomes

1. Initiate a comprehensive review of the Payment Systems Act, its 2026-2027
   subsidiary legislation, and the Business Licensing (Deployment and Usage of Electronic Payment Channels) Regulations to identify areas for improvement and alignment with global standards.

2. Conduct structured stakeholder consultations on draft amendments 2026 -2027
   to the regulatory framework, including engagement with PSPs, FinTech's, consumer bodies, and other relevant authorities.

3. Finalise and implement the revised legislation and regulations, 2027-2028
   ensuring all required approval and promulgation processes are completed.

4. Monitor and evaluate the impact of the revised regulatory framework, 2028-2030
   making further adjustments as necessary to address emerging developments.

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1. Enhanced Security and Compliance: An updated regulatory framework will strengthen 4.1.2.1 Implementation Timelines and Expected Outcomes
   the security of the payments system, ensure compliance with international standards, reduce the risk of fraud, and enhance consumer trust.

2. Payment System and Financial Services Innovation: A modernised regulatory
   environment will support the development and adoption of innovative payment 4.1.2.1 Implementation Timelines and Expected Outcomes solutions, fostering a more dynamic and competitive financial sector.

3. Improved Financial Inclusion: Revised regulations will facilitate greater access to
   financial services for all Malawians, particularly those in underserved areas, by removing barriers to participation in the digital payments ecosystem.

4. Increased Efficiency: Streamlined regulations will reduce administrative burdens and
   improve the efficiency of payment processes, benefiting both consumers, including merchants and retailers, and financial institutions. 4.1.2 PFMI Compliance Compliance with the PFMI - established jointly by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) - is a key pillar of the strategy to enhance the safety and efficiency of the NPS. The PFMIs provide internationally recognised standards for the design, operation, and oversight of financial market infrastructures. By progressively aligning Malawi's payment systems with these principles, the RBM aims to ensure that the NPS is resilient to financial shocks, operates with integrity and efficiency, and maintains the confidence of all market participants. This entails implementing measures related to risk management, governance structures, operational resilience, and transparency standards. 4.1.3 Payment Card Industry Data Security Standard (PCI DSS) To address the threat of card-based fraud and safeguard the integrity of payment

5. Financial Inclusion: Alignment with PFMI principles promotes a payments iii. Financial Inclusion: Alignment with PFMI principles promotes a payments iv. Improved Governance: Strong governance, a core pillar of the PFMI, will ensure that iv. Improved Governance: Strong governance, a core pillar of the PFMI, will ensure that i. Increased Efficiency: Adherence to the PFMI will enhance the operational efficiency of i. Increased Efficiency: Adherence to the PFMI will enhance the operational efficiency of 3) Conduct formal self-assessments of MITASS and the National Switch 2026-2027 3) Conduct formal self-assessments of MITASS and the National Switch 2026-2027 transactions, this Framework includes a programme for the progressive implementation of

6. Enhanced Security: Implementing PFMI-aligned risk management and cybersecurity ii. Enhanced Security: Implementing PFMI-aligned risk management and cybersecurity infrastructure that is accessible, affordable, and user-friendly for all segments of the infrastructure that is accessible, affordable, and user-friendly for all segments of the financial market infrastructures operate with clear accountability, sound decision-making financial market infrastructures operate with clear accountability, sound decision-making Malawi's payment infrastructure by streamlining processes, reducing transaction times, Malawi's payment infrastructure by streamlining processes, reducing transaction times, 1) Conduct PFMI capacity-building training for key staff within the RBM 1) Conduct PFMI capacity-building training for key staff within the RBM against the PFMIs and develop a detailed, time-bound compliance against the PFMIs and develop a detailed, time-bound compliance the Payment Card Industry Data Security Standard (PCI DSS). PCI DSS provides a
   Timelines Timelines frameworks will contribute to a more secure and resilient payments ecosystem. frameworks will contribute to a more secure and resilient payments ecosystem. structures, and effective regulatory oversight, promoting stability and public confidence. structures, and effective regulatory oversight, promoting stability and public confidence. and minimising operational bottlenecks. and minimising operational bottlenecks. 2) Develop a comprehensive PFMI compliance strategy and roadmap. 2) Develop a comprehensive PFMI compliance strategy and roadmap. and relevant market participants. and relevant market participants. plan. plan. comprehensive set of security requirements to protect cardholder data throughout the 4.1.3 Payment Card Industry Data Security Standard (PCI DSS) Reserve Bank of Malawi | Confidential 21 Reserve Bank of Malawi | Confidential 20 To address the threat of card-based fraud and safeguard the integrity of payment transactions, this Framework includes a programme for the progressive implementation of the Payment Card Industry Data Security Standard (PCI DSS). PCI DSS provides a comprehensive set of security requirements to protect cardholder data throughout the 4.1.2.1 Implementation Timelines and Expected Outcomes

7. Conduct PFMI capacity-building training for key staff within the RBM 2026 Reserve Bank of Malawi | Confidential 21
   and relevant market participants.

8. Conduct formal self-assessments of MITASS and the National Switch 2026-2027
   against the PFMIs and develop a detailed, time-bound compliance 4.1.2.1 Implementation Timelines and Expected Outcomes plan.

9. Increased Efficiency: Adherence to the PFMI will enhance the operational efficiency of
   Malawi's payment infrastructure by streamlining processes, reducing transaction times, and minimising operational bottlenecks.

10. Enhanced Security: Implementing PFMI-aligned risk management and cybersecurity
    frameworks will contribute to a more secure and resilient payments ecosystem.

11. Financial Inclusion: Alignment with PFMI principles promotes a payments
    infrastructure that is accessible, affordable, and user-friendly for all segments of the

12. Improved Governance: Strong governance, a core pillar of the PFMI, will ensure that
    financial market infrastructures operate with clear accountability, sound decision-making structures, and effective regulatory oversight, promoting stability and public confidence. 4.1.3 Payment Card Industry Data Security Standard (PCI DSS) To address the threat of card-based fraud and safeguard the integrity of payment transactions, this Framework includes a programme for the progressive implementation of the Payment Card Industry Data Security Standard (PCI DSS). PCI DSS provides a comprehensive set of security requirements to protect cardholder data throughout the

13. Financial Inclusion: Alignment with PFMI principles promotes a payments iv. Improved Governance: Strong governance, a core pillar of the PFMI, will ensure that i. Increased Efficiency: Adherence to the PFMI will enhance the operational efficiency of 3) Conduct formal self-assessments of MITASS and the National Switch 2026-2027

14. Enhanced Security: Implementing PFMI-aligned risk management and cybersecurity infrastructure that is accessible, affordable, and user-friendly for all segments of the financial market infrastructures operate with clear accountability, sound decision-making Malawi's payment infrastructure by streamlining processes, reducing transaction times, 1) Conduct PFMI capacity-building training for key staff within the RBM against the PFMIs and develop a detailed, time-bound compliance
    Timelines frameworks will contribute to a more secure and resilient payments ecosystem. structures, and effective regulatory oversight, promoting stability and public confidence. and minimising operational bottlenecks. 2) Develop a comprehensive PFMI compliance strategy and roadmap. 2) Develop a comprehensive PFMI compliance strategy and roadmap. and relevant market participants. plan. 4.1.3 Payment Card Industry Data Security Standard (PCI DSS) Reserve Bank of Malawi | Confidential 21 To address the threat of card-based fraud and safeguard the integrity of payment lifecycle of a transaction. By adopting PCI DSS, PSPs and card system operators in Malawi transactions, this Framework includes a programme for the progressive implementation of will be better equipped to protect sensitive cardholder information and reduce the risk of the Payment Card Industry Data Security Standard (PCI DSS). PCI DSS provides a data breaches, with their attendant financial and reputational consequences. The Standard comprehensive set of security requirements to protect cardholder data throughout the encompasses measures for the prevention, detection, and response to security incidents within payment systems. Reserve Bank of Malawi | Confidential 21 4.1.3.1 Implementation Timelines and Expected Outcomes

roadmap, including phased targets for PSPs. 4.1.4 Cybercrime and Digital Payment Fraud Mitigation

1. Initiate the assessment phase, engaging qualified security 2027-2030
   While Malawi's digital payments landscape has recorded significant growth, cybercrime and assessors to conduct training and thorough evaluations of current payment fraud remain persistent threats that undermine the integrity and trustworthiness of systems and processes. the ecosystem. This initiative focuses on enforcing robust cybercrime and fraud mitigation measures across the payments sector to ensure that the NPS remains safe, secure, and deserving of public confidence.

2. Enhanced Security: Adherence to PCI DSS standards will significantly strengthen the
   security posture of financial institutions, making it materially more difficult for 4.1.4.1 Implementation Timelines and Expected Outcomes cybercriminals to compromise payment systems and access sensitive data.

3. Reduced Fraud: Robust security controls will help prevent fraudulent activities,
   protecting consumers, merchants, and businesses from financial losses.

4. Increased Consumer Trust: A demonstrated commitment to security through PCI
   DSS compliance will enhance consumer confidence in the safety of electronic payments and encourage broader adoption of digital instruments.

5. Regulatory Compliance: PCI DSS implementation will assist financial institutions in
   meeting their regulatory obligations and avoiding penalties associated with non- compliance.

6. Competitive Advantage: Institutions that attain PCI DSS compliance can distinguish 4) Conduct sustained national awareness campaigns on fraud 2025-2030 1) Develop cybersecurity guidelines and fraud prevention frameworks 2025-2026 2) Work in close collaboration with MACRA to implement SIM Card 2025-2026
   themselves as providers of secure payment solutions, attracting a broader base of 3) Actively participate in and contribute to the Digital Fraud Prevention 2025-2030 1) Develop a PCI DSS compliance strategy and implementation 2026-2027 prevention, targeting consumers, businesses, and payment service to ensure that PSPs maintain adequate resilience against cyber Registration Regulations and operationalise the Central Equipment Timelines customers and business partners. Timelines Taskforce in collaboration with relevant stakeholders. providers. attacks and fraudulent schemes. Identity Register (CEIR).

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1. Competitive Advantage: Institutions that attain PCI DSS compliance can distinguish
   themselves as providers of secure payment solutions, attracting a broader base of customers and business partners. 4.1.4 Cybercrime and Digital Payment Fraud Mitigation While Malawi's digital payments landscape has recorded significant growth, cybercrime and payment fraud remain persistent threats that undermine the integrity and trustworthiness of the ecosystem. This initiative focuses on enforcing robust cybercrime and fraud mitigation measures across the payments sector to ensure that the NPS remains safe, secure, and deserving of public confidence. 4.1.4.1 Implementation Timelines and Expected Outcomes

2. 2025-2026
   to ensure that PSPs maintain adequate resilience against cyber attacks and fraudulent schemes.

3. Work in close collaboration with MACRA to implement SIM Card 2025-2026

Identity Register (CEIR).

1. 2025-2030

Taskforce in collaboration with relevant stakeholders.

1. Conduct sustained national awareness campaigns on fraud 2025-2030 providers.

Develop cybersecurity guidelines and fraud prevention frameworks Actively participate in and contribute to the Digital Fraud Prevention prevention, targeting consumers, businesses, and payment service Registration Regulations and operationalise the Central Equipment

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1. Enhanced Security: Cybersecurity guidelines will strengthen the security posture of
   4.2.1.1 Implementation Timelines and Expected Outcomes PSPs, making it significantly more difficult for malicious actors to compromise payment systems or access sensitive data.

2. Reduced Fraud: Robust preventive measures will protect consumers and businesses
   from financial losses attributable to fraudulent activities.

3. Increased Consumer Trust: A safer payments environment will encourage greater
   adoption of DFS and deepen consumer confidence in digital financial services.

4. An Informed User Community: Empowering consumers with knowledge of fraud risks
   and mitigation strategies will reduce vulnerability, strengthen trust, and support sustained adoption of digital payment instruments. 4.2 Strategic Objective Two: Upgrade and Enhance National Payment Infrastructure 4.2.1 MITASS Upgrade and ISO 20022 Migration The modernisation of MITASS and the migration to the ISO 20022 financial messaging standard are foundational components of this strategic objective. The MITASS upgrade will improve the efficiency, reliability, and resilience of interbank settlement operations, ensuring the continued integrity of Malawi's core payment infrastructure. Concurrently, the adoption of ISO 20022 will introduce a richer, more standardised messaging format for payments, facilitating enhanced interoperability and data exchange between financial institutions both domestically and internationally. ISO 20022 is recognised globally as the emerging standard for high-value payment systems and is essential for Malawi's effective integration into international payment networks.

5. Increased Security: The upgraded infrastructure will incorporate advanced security iv. Futureproofing: Adoption of ISO 20022 ensures that Malawi's payment infrastructure 1) Conduct a comprehensive technical assessment of MITASS to identify 2025-2026 2) Develop and implement an ISO 20022 migration plan, including 2025-2027

6. Improved Reliability: The upgraded MITASS will deliver enhanced reliability and ii. Enhanced Interoperability: ISO 20022 adoption will facilitate richer and more reliable capabilities, reduce the risk of fraud and enhance the overall integrity of financial remains compatible with global standards and well-positioned to accommodate future 3) Deploy the upgraded MITASS system and complete full migration to 2026-2028 upgrade requirements, including hardware, software, and operational 4) Monitor and evaluate the performance of the upgraded MITASS and 2028-2030 industry-wide testing and a phased transition for all participating
   uptime, reduce the incidence of system outages and improve settlement performance. Timelines communication between domestic and international financial institutions. transactions. innovations in the financial sector. ISO 20022 across all relevant financial institutions. enhancements. financial institutions. ISO 20022 implementation, refining processes as required.

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4.2.1.1 Implementation Timelines and Expected Outcomes 1) Conduct a comprehensive technical assessment of MITASS to identify 2025-2026 upgrade requirements, including hardware, software, and operational enhancements.

1. Develop and implement an ISO 20022 migration plan, including 2025-2027 industry-wide testing and a phased transition for all participating financial institutions.

ISO 20022 across all relevant financial institutions.

1. Monitor and evaluate the performance of the upgraded MITASS and 2028-2030

ISO 20022 implementation, refining processes as required.

1. Improved Reliability: The upgraded MITASS will deliver enhanced reliability and
   uptime, reduce the incidence of system outages and improve settlement performance.

2. Enhanced Interoperability: ISO 20022 adoption will facilitate richer and more reliable
   communication between domestic and international financial institutions.

3. Increased Security: The upgraded infrastructure will incorporate advanced security
   capabilities, reduce the risk of fraud and enhance the overall integrity of financial transactions.

4. Futureproofing: Adoption of ISO 20022 ensures that Malawi's payment infrastructure
   remains compatible with global standards and well-positioned to accommodate future innovations in the financial sector.

5. Deploy the upgraded MITASS system and complete full migration to 2026-2028

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The introduction of a national electronic Know Your Customer (e-KYC) platform represents a strategic investment in the efficiency and integrity of customer onboarding across Malawi's 4.2.2 e-KYC Platform Implementation financial sector. The e-KYC platform will enable financial institutions to verify the identities of customers electronically, reducing reliance on physical documentation and significantly accelerating the onboarding process. In addition to efficiency gains, e-KYC will strengthen the consistency and reliability of identity verification across the sector, thereby mitigating risks associated with fraud, money laundering, and terrorist financing. The needs assessment for the e-KYC platform has been completed. Industry stakeholders have agreed that the platform will be hosted at the National Switch, and will leverage the National Registration Bureau's biometric national ID database, combined with KYC data from financial institutions, to create a unified and shared identity verification resource. The 2030 Framework will focus on the development, design, operationalisation and full deployment of this platform. 4.2.2.1 Implementation Timelines and Expected Outcomes

design of the e-KYC platform

1. Conduct pilot testing of the design with the National Switch and 4.2.3 National e-Payments Gateway (NePG) Development
   selected financial institutions to validate the platform's functionality and reliability. The development of the National e-Payments Gateway (NePG) is essential to modernising Malawi's payments infrastructure and accommodating the growing volume and diversity of

2. Roll out the e-KYC platform to all financial institutions, with digital transactions across the economy. The NePG will serve as a centralised platform
   accompanying training and technical support to ensure smooth facilitating seamless electronic payments across multiple sectors, supporting e-commerce, adoption. government-to-person (G2P), person-to-government (P2G), person-to-business (P2B), and business-to-person (B2P) transactions. It will also serve as a critical conduit for the disbursement of social cash transfers, providing a secure and efficient channel for delivering adjustments based on user feedback and evolving regulatory financial assistance to vulnerable segments of the population. requirements. Significant preparatory work on the NePG has already been completed. The 2030

3. Automated Data Collection: The platform will streamline the collection of customer i. Digital Identity Verification: PSPs will be able to verify customer identities Framework will accordingly focus on the procurement, integration, and full national 4) Monitor and evaluate platform performance, incorporating 2027-2030
   information, reducing manual entry errors and materially accelerating the onboarding iii. Real-Time Verification: Instant identity verification will enable faster access to electronically using biometric data, national ID cards, or other digital credentials, iv. Secure Data Storage: The platform will ensure that customer data is stored securely, deployment of the Gateway. 1) Through market players, commence technical development and process. financial services, reducing barriers to financial inclusion. reducing dependency on manual processes. with robust encryption and access controls to guard against unauthorised access. Timelines

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1. Digital Identity Verification: PSPs will be able to verify customer identities
   electronically using biometric data, national ID cards, or other digital credentials, reducing dependency on manual processes.

2. Automated Data Collection: The platform will streamline the collection of customer
   information, reducing manual entry errors and materially accelerating the onboarding process.

3. Real-Time Verification: Instant identity verification will enable faster access to
   financial services, reducing barriers to financial inclusion.

4. Secure Data Storage: The platform will ensure that customer data is stored securely,
   with robust encryption and access controls to guard against unauthorised access. 4.2.3 National e-Payments Gateway (NePG) Development The development of the National e-Payments Gateway (NePG) is essential to modernising Malawi's payments infrastructure and accommodating the growing volume and diversity of digital transactions across the economy. The NePG will serve as a centralised platform facilitating seamless electronic payments across multiple sectors, supporting e-commerce, government-to-person (G2P), person-to-government (P2G), person-to-business (P2B), and business-to-person (B2P) transactions. It will also serve as a critical conduit for the disbursement of social cash transfers, providing a secure and efficient channel for delivering financial assistance to vulnerable segments of the population. Significant preparatory work on the NePG has already been completed. The 2030 Framework will accordingly focus on the procurement, integration, and full national deployment of the Gateway.

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4.2.3.1 Implementation Timelines and Expected Outcomes 4.2.4 Financial Innovation Hub and Regulatory Sandbox 1) Finalise the procurement of necessary infrastructure and technology 2026 for the NePG. The establishment of a Financial Innovations Hub (the Hub) and Regulatory Sandbox represents a strategic commitment to fostering the development, testing, and responsible and platforms. adoption of financial innovations in a controlled, supportive environment. The Hub will serve as a dedicated platform for collaboration, research, and the co-development of innovative

1. Conduct pilot testing with selected stakeholders - including
   financial solutions, bringing together fintech companies, financial institutions, the RBM, government agencies, businesses, and financial institutions - to regulators, and other stakeholders to explore emerging ideas and technologies. validate the Gateway's functionality, reliability, and security. The Regulatory Sandbox will complement this by providing a structured, supervised 4) Roll out the NePG nationwide, with comprehensive training and 2026 - 2028 environment in which innovators can test products and services under the direct oversight support to ensure smooth adoption by all users. of the RBM, prior to full market launch. In designing this framework, the RBM draws an important distinction between two sandbox models that serve fundamentally different necessary adjustments and enhancements based on user feedback purposes. The first is a Regulatory Sandbox in the strict sense, an environment in which and evolving requirements. regulatory requirements are deliberately suspended or waived to allow an innovator to test whether their product is genuinely needed in the market and whether it functions as claimed. The primary question this model seeks to answer is not whether the innovation is commercially viable, but whether it exposes a regulatory gap or challenge that may require

2. Comprehensive Payment Solutions: The NePG will support a broad spectrum of
   legislative reform. Where the innovation reveals such a gap and performs as intended, the payment types, including e-commerce transactions, government payments, and social applicable law may be reviewed; where it does not, the existing regulatory framework cash transfers, under a single, integrated platform. continues to apply in full. The second is a Developmental Sandbox, which allows an operator to enter the market and function under minimum regulatory requirements, with the ii. Interoperability: The NePG will facilitate seamless integration with existing financial expectation of graduating to full licensing upon demonstrated compliance and viability. This systems and platforms, enabling smooth and reliable transactions across diverse model is oriented towards market development and reducing barriers to entry for new service providers. participants, functioning as an incubation tool rather than a legal stress-test.

3. Real-Time Processing: The Gateway will enable instant payment processing, Both models serve legitimate and complementary purposes within the RBM's broader
   improving efficiency and the user experience across all transaction types. strategy. However, conflating them risks poor governance and unclear outcomes for applicants and regulators alike. The RBM is therefore committed to determining upfront iv. Accessibility: The NePG will feature a user-friendly interface accessible to all users, which model applies in any given case and communicating this clearly to all participants, including those in rural and underserved areas, thereby advancing financial inclusion. ensuring that the objectives, obligations, and expected outcomes of each sandbox engagement are well understood from the outset.

4. Monitor and evaluate the performance of the NePG, making 2027-2030

5. Commence integration of the NePG with existing financial systems 2026-2027

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The establishment of a Financial Innovations Hub (the Hub) and Regulatory Sandbox represents a strategic commitment to fostering the development, testing, and responsible 4.2.4 Financial Innovation Hub and Regulatory Sandbox adoption of financial innovations in a controlled, supportive environment. The Hub will serve as a dedicated platform for collaboration, research, and the co-development of innovative financial solutions, bringing together fintech companies, financial institutions, the RBM, regulators, and other stakeholders to explore emerging ideas and technologies. The Regulatory Sandbox will complement this by providing a structured, supervised environment in which innovators can test products and services under the direct oversight of the RBM, prior to full market launch. In designing this framework, the RBM draws an important distinction between two sandbox models that serve fundamentally different purposes. The first is a Regulatory Sandbox in the strict sense, an environment in which regulatory requirements are deliberately suspended or waived to allow an innovator to test whether their product is genuinely needed in the market and whether it functions as claimed. The primary question this model seeks to answer is not whether the innovation is commercially viable, but whether it exposes a regulatory gap or challenge that may require legislative reform. Where the innovation reveals such a gap and performs as intended, the applicable law may be reviewed; where it does not, the existing regulatory framework continues to apply in full. The second is a Developmental Sandbox, which allows an operator to enter the market and function under minimum regulatory requirements, with the expectation of graduating to full licensing upon demonstrated compliance and viability. This model is oriented towards market development and reducing barriers to entry for new participants, functioning as an incubation tool rather than a legal stress-test. Both models serve legitimate and complementary purposes within the RBM's broader strategy. However, conflating them risks poor governance and unclear outcomes for applicants and regulators alike. The RBM is therefore committed to determining upfront which model applies in any given case and communicating this clearly to all participants, ensuring that the objectives, obligations, and expected outcomes of each sandbox engagement are well understood from the outset.

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4.2.4.1 Implementation Timelines and Expected Outcomes

4.2.5 Interoperable Cash-In and Cash-Out Services

1. Establish bank project committees to undertake research and 2025 - 2026 Interoperable cash-in and cash-out services represent a critical enabler of financial access develop an operational framework for the creation of the Financial within the 2030 Framework. This initiative seeks to allow consumers to deposit (cash-in) and

Innovation Hub. withdraw (cash-out) funds at any participating financial institution, agent, or merchant, irrespective of the provider with whom their account is held. This will also extend to

1. Set up a dedicated division within the RBM to lead the activities of 2025 - 2026 transactions conducted through any provider's infrastructure, such as POS terminals,
   the Hub in liaison with the project committees. thereby significantly broadening the reach and utility of digital financial services. While expanding cash-out points is essential for improving access and financial inclusion, it 3) Formally launch the Innovations Hub. 2026 -2027 must be balanced against the risk of increased cash circulation. The RBM will accordingly introduce appropriate cash-out limits in designated areas to manage liquidity risks and 4) Roll out the operations of the Hub. 2026 - 2030 maintain the integrity of the cash supply. By achieving interoperability in cash-in and cash- out services while managing cash flows responsibly, Malawi can advance a more inclusive, accessible, and efficient payments ecosystem.

2. Accelerated Innovation: By providing a conducive environment for experimentation 4.2.5.1 Implementation Timelines and Expected Outcomes
   and co-development, the Hub will accelerate the development and adoption of innovative financial solutions.

3. Improved Regulatory Framework: Insights and learnings from the Sandbox will
   equip the RBM to refine and adapt the regulatory framework to better accommodate emerging technologies.

4. Enhanced Competitiveness: The initiative will strengthen the competitiveness of
   the Malawian financial sector by cultivating a culture of innovation and continuous improvement.

5. Greater Financial Inclusion: Solutions developed within the Hub that address the
   needs of underserved populations will contribute to broader financial inclusion and economic empowerment.

6. Maintain and continuously enhance the cash-in and cash-out 2027-2030

7. Engage all relevant stakeholders and establish a working group to 2025 - 2026 3) Upgrade payment infrastructure across participating institutions 2027-2028 5) Evaluate pilot outcomes, incorporate feedback, and refine the 2027-2028 2) Develop and adopt common technical standards for interoperable 2026-2028 4) Conduct controlled pilot tests with selected financial institutions 2027-2028 interoperability solution, addressing emerging issues and ensuring
   Timelines and agents to support interoperable transactions. system prior to full rollout. oversee and coordinate implementation. cash-in and cash-out transactions. and agents. 4.2.5 Interoperable Cash-In and Cash-Out Services sustained service quality. Interoperable cash-in and cash-out services represent a critical enabler of financial access Reserve Bank of Malawi | Confidential 31

Reserve Bank of Malawi | Confidential 30 within the 2030 Framework. This initiative seeks to allow consumers to deposit (cash-in) and

withdraw (cash-out) funds at any participating financial institution, agent, or merchant, irrespective of the provider with whom their account is held. This will also extend to Interoperable cash-in and cash-out services represent a critical enabler of financial access transactions conducted through any provider's infrastructure, such as POS terminals, within the 2030 Framework. This initiative seeks to allow consumers to deposit (cash-in) and thereby significantly broadening the reach and utility of digital financial services. 4.2.5 Interoperable Cash-In and Cash-Out Services withdraw (cash-out) funds at any participating financial institution, agent, or merchant, While expanding cash-out points is essential for improving access and financial inclusion, it irrespective of the provider with whom their account is held. This will also extend to must be balanced against the risk of increased cash circulation. The RBM will accordingly transactions conducted through any provider's infrastructure, such as POS terminals, introduce appropriate cash-out limits in designated areas to manage liquidity risks and thereby significantly broadening the reach and utility of digital financial services. maintain the integrity of the cash supply. By achieving interoperability in cash-in and cash- While expanding cash-out points is essential for improving access and financial inclusion, it out services while managing cash flows responsibly, Malawi can advance a more inclusive, must be balanced against the risk of increased cash circulation. The RBM will accordingly accessible, and efficient payments ecosystem. introduce appropriate cash-out limits in designated areas to manage liquidity risks and

4.2.5.1 Implementation Timelines and Expected Outcomes maintain the integrity of the cash supply. By achieving interoperability in cash-in and cash- out services while managing cash flows responsibly, Malawi can advance a more inclusive,

Timelines accessible, and efficient payments ecosystem.

1. Engage all relevant stakeholders and establish a working group to 2025 - 2026 4.2.5.1 Implementation Timelines and Expected Outcomes
   oversee and coordinate implementation.

2. Develop and adopt common technical standards for interoperable 2026-2028
   cash-in and cash-out transactions. 1) Engage all relevant stakeholders and establish a working group to 2025 - 2026 oversee and coordinate implementation. 3) Upgrade payment infrastructure across participating institutions 2027-2028 and agents to support interoperable transactions. cash-in and cash-out transactions. 4) Conduct controlled pilot tests with selected financial institutions 2027-2028 and agents. 3) Upgrade payment infrastructure across participating institutions 2027-2028 and agents to support interoperable transactions. 5) Evaluate pilot outcomes, incorporate feedback, and refine the 2027-2028 system prior to full rollout. and agents. 6) Maintain and continuously enhance the cash-in and cash-out 2027-2030 interoperability solution, addressing emerging issues and ensuring 5) Evaluate pilot outcomes, incorporate feedback, and refine the 2027-2028 sustained service quality. system prior to full rollout.

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interoperability solution, addressing emerging issues and ensuring sustained service quality.

1. Maintain and continuously enhance the cash-in and cash-out 2027-2030
2. Develop and adopt common technical standards for interoperable 2026-2028 4) Conduct controlled pilot tests with selected financial institutions 2027-2028 4.2.5 Interoperable Cash-In and Cash-Out Services

Interoperable cash-in and cash-out services represent a critical enabler of financial access Reserve Bank of Malawi | Confidential 31 within the 2030 Framework. This initiative seeks to allow consumers to deposit (cash-in) and withdraw (cash-out) funds at any participating financial institution, agent, or merchant, irrespective of the provider with whom their account is held. This will also extend to transactions conducted through any provider's infrastructure, such as POS terminals,

1. Improved Access to Financial Services: Consumers will benefit from significantly thereby significantly broadening the reach and utility of digital financial services. expanded access to deposit and withdrawal services, supporting financial inclusion.

While expanding cash-out points is essential for improving access and financial inclusion, it

1. Enhanced Convenience: Consumers will be able to conduct cash-in and cash-out must be balanced against the risk of increased cash circulation. The RBM will accordingly transactions at the most conveniently located points, reducing travel time and introduce appropriate cash-out limits in designated areas to manage liquidity risks and

associated costs. maintain the integrity of the cash supply. By achieving interoperability in cash-in and cash- out services while managing cash flows responsibly, Malawi can advance a more inclusive,

1. Cost Savings: Reduced duplication of infrastructure and improved sharing of accessible, and efficient payments ecosystem. resources among financial institutions and agents will generate cost savings and 4.2.5.1 Implementation Timelines and Expected Outcomes enhance service delivery. Timelines 4.3 Strategic Objective Three: Promote Digital Financial Services Adoption and 1) Engage all relevant stakeholders and establish a working group to 2025 - 2026

Usage oversee and coordinate implementation.

4.3.1 Phasing Out of Cheques 2) Develop and adopt common technical standards for interoperable 2026-2028 cash-in and cash-out transactions.

Consistent with the declining trend in cheque usage observed in Malawi and in line with regional and global practice, this initiative seeks to reduce and ultimately eliminate reliance 3) Upgrade payment infrastructure across participating institutions 2027-2028

on paper-based payment instruments. Cheques are slow, costly to process, and susceptible and agents to support interoperable transactions.

to fraud, making them ill-suited to the demands of a modern digital economy. A structured,

1. Conduct controlled pilot tests with selected financial institutions 2027-2028 phased transition will be implemented, providing adequate time for businesses, government
   and agents. entities, and individuals to transition to efficient electronic alternatives.

2. Evaluate pilot outcomes, incorporate feedback, and refine the 2027-2028 4.3.1.1 Implementation Timelines and Expected Outcomes
   system prior to full rollout.

3. Maintain and continuously enhance the cash-in and cash-out 2027-2030
   interoperability solution, addressing emerging issues and ensuring sustained service quality.

clear milestones, communication plans, and transitional support for affected stakeholders.

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1. Accelerated Digital Adoption: The phase-out will drive greater uptake of digital 5) Implement policy interventions to disincentivise cheque usage, 2026-2027 1) Develop a comprehensive cheque phase-out strategy, including 2025 -2026 2) Initiate targeted awareness campaigns to educate the public, 2025 - 2026 4) Engage banks and PSPs to upgrade their systems and capacities to 2025-2026
2. Reduced Fraud: The elimination of cheque instruments will remove an avenue for i. Cost Reduction: Eliminating cheque processing will reduce operational costs for solutions and other digital payment instruments, deepening the digital payments iv. Improved Efficiency: Real-time and electronic payment alternatives will accelerate including revised pricing structures and regulatory requirements for 6) Progressively restrict cheque acceptance in specific payment 2027-2028 7) Complete the formal phase-out of cheques as a standard payment 2029-2030 businesses, and government entities on the benefits of electronic support high-volume EFT and real-time payments as alternatives to payment fraud, contributing to a more secure financial environment. banks, businesses, and the RBM. transaction settlement, benefiting businesses, consumers, and Government alike. Timelines electronic payment adoption. 3) Review the Bills of Exchange Act 2025 - 2026 categories (e.g. government payments) in advance of full phase-out. payment alternatives and the phase-out timeline. cheques. instrument.

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1. Initiate targeted awareness campaigns to educate the public, 2025 - 2026
   businesses, and government entities on the benefits of electronic payment alternatives and the phase-out timeline.

2. Review the Bills of Exchange Act 2025 - 2026

3. 2025-2026
   support high-volume EFT and real-time payments as alternatives to cheques.

4. Implement policy interventions to disincentivise cheque usage, 2026-2027
   including revised pricing structures and regulatory requirements for electronic payment adoption.

categories (e.g. government payments) in advance of full phase-out.

1. Complete the formal phase-out of cheques as a standard payment 2029-2030
   instrument.

2. Cost Reduction: Eliminating cheque processing will reduce operational costs for
   banks, businesses, and the RBM.

3. Accelerated Digital Adoption: The phase-out will drive greater uptake of digital
   solutions and other digital payment instruments, deepening the digital payments

4. Reduced Fraud: The elimination of cheque instruments will remove an avenue for
   payment fraud, contributing to a more secure financial environment.

5. Improved Efficiency: Real-time and electronic payment alternatives will accelerate
   transaction settlement, benefiting businesses, consumers, and Government alike.

Engage banks and PSPs to upgrade their systems and capacities to

1. Progressively restrict cheque acceptance in specific payment 2027-2028

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High transaction costs remain a significant barrier to the widespread adoption of digital financial services, particularly among low-income consumers. This initiative seeks to 4.3.2 Lowering the Cost of Digital Financial Services and Solutions develop and implement targeted measures to reduce the cost of digital transactions, with the aim of making DFS affordable and accessible to all segments of the population, including the unbanked and underserved. The RBM, working with the NPC and other relevant stakeholders, will examine pricing structures across different payment channels, assess the impact of existing levies and charges, and develop policy interventions, including potential pricing regulations, interoperability mandates, and infrastructure cost-sharing arrangements, to drive meaningful cost reduction. 4.3.2.1 Implementation Timelines and Expected Outcomes

Timelines

1. Conduct a comprehensive study on DFS transaction cost structures across all payment channels, including mobile money, internet 4.4 Strategic Objective Four: Explore and Pilot Emerging Technologies and banking, and ATM services. Innovations 4.4.1 Open Finance 2026-2027 2) Engage PSPs, MMOs, and other relevant stakeholders to develop a framework for voluntary or regulated cost reductions. Open finance represents an evolution of the open banking concept, enabling the secure sharing of financial data and services across a broader range of financial products - including insurance, pensions, investments, and lending, with the informed consent of the 2027-2028 3) Implement pricing intervention measures, which may include levy customer. By facilitating access to financial data by accredited third-party providers, open reductions, tariff ceilings, or cost-sharing arrangements between finance has the potential to unlock innovative new products and services, intensify infrastructure providers. competition, enhance transparency, and ultimately improve outcomes for consumers and businesses. 2027-2030 4) Monitor the impact of implemented measures on DFS uptake and The RBM recognises that the introduction of open finance in Malawi must be underpinned transaction volumes, with periodic reviews to assess effectiveness. by a robust data governance framework, clear consumer consent mechanisms, and appropriate cybersecurity safeguards. The 2030 Framework will therefore pursue a phased ii. Increased DFS Adoption: Affordable digital payment options will incentivise and consultative approach to developing the enabling regulatory and technical architecture i. Greater Financial Inclusion: Lower transaction costs will bring digital payments within consumers and businesses to transition from cash and cheques to electronic iii. Economic Growth: Reduced transaction costs will facilitate greater economic activity, Timelines for open finance, drawing on the experience of jurisdictions that have implemented similar the reach of lower-income consumers, broadening financial inclusion. instruments. benefiting businesses of all sizes and supporting growth across the economy.

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Timelines

1. Greater Financial Inclusion: Lower transaction costs will bring digital payments within
   the reach of lower-income consumers, broadening financial inclusion.

2. Increased DFS Adoption: Affordable digital payment options will incentivise
   consumers and businesses to transition from cash and cheques to electronic instruments.

3. Economic Growth: Reduced transaction costs will facilitate greater economic activity,
   benefiting businesses of all sizes and supporting growth across the economy. 4.4 Strategic Objective Four: Explore and Pilot Emerging Technologies and Innovations 4.4.1 Open Finance Open finance represents an evolution of the open banking concept, enabling the secure sharing of financial data and services across a broader range of financial products - including insurance, pensions, investments, and lending, with the informed consent of the customer. By facilitating access to financial data by accredited third-party providers, open finance has the potential to unlock innovative new products and services, intensify competition, enhance transparency, and ultimately improve outcomes for consumers and businesses. The RBM recognises that the introduction of open finance in Malawi must be underpinned by a robust data governance framework, clear consumer consent mechanisms, and appropriate cybersecurity safeguards. The 2030 Framework will therefore pursue a phased and consultative approach to developing the enabling regulatory and technical architecture for open finance, drawing on the experience of jurisdictions that have implemented similar

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4.4.1.1 Implementation Timelines and Expected Outcomes

1. Commission a study on international open finance frameworks and 2027-2028
   their applicability to Malawi's context, including regulatory, technical, and market readiness considerations.

2. Establish an Open Finance Working Group comprising the RBM, 2027-2028
   financial institutions, fintech firms, telecommunications operators, consumer bodies, and relevant government agencies. 4.4.2 Central Bank Digital Currency (CBDC) Implementation A Central Bank Digital Currency (CBDC) is a digital form of sovereign currency, issued and Governance Standards for stakeholder consultation. backed by the central bank. CBDCs have attracted significant global interest as a potential

3. Conduct stakeholder consultations and refine the framework, 2028-2029 instrument to enhance financial inclusion, improve the efficiency of domestic and cross-
   incorporating feedback from industry and the public. border payments, reduce the cost of cash management, and provide a secure and stable digital payment instrument. Globally, a growing number of central banks are at various 5) Pilot the Open Finance Framework with selected financial 2028-2029 stages of research, piloting, or deployment of CBDCs. institutions and accredited third-party providers. The RBM is committed to conducting a thorough, evidence-based assessment of the 6) Evaluate the outcomes of the pilot and implement refinements in 2029-2030 potential benefits, risks, and design considerations associated with a Malawi CBDC. This preparation for a broader rollout. will involve creating a Proof of Concept to assess the feasibility of developing a CBDC. 4.4.2.1 Implementation Timelines and Expected Outcomes

4. Enhanced Financial Products and Services: Open finance will stimulate the
   development of innovative, customer-centric financial products that better meet the diverse needs of Malawian consumers and businesses.

5. Increased Competition and Reduced Costs: Greater competition among service
   providers enabled by open finance will drive down costs and improve the quality and accessibility of financial services.

6. Improved Financial Inclusion: By enabling more tailored and accessible financial
   products, open finance has the potential to serve segments of the population currently excluded from formal financial services.

7. Commission in-depth research on global CBDC developments, 2025-2026

8. Strengthened Data Governance: The development of a comprehensive data 2) Conduct structured consultations with financial institutions, payment 2026-2027 models, and design considerations, with a particular focus on the
   governance framework will protect consumer data rights and build public confidence in experience of African central banks and comparable developing 3) Develop a draft Open Finance Regulatory Framework and Data 2028-2029 service providers, government agencies, consumer groups, and 3) Develop and publish a CBDC Proof of Concept, setting out the RBM's 2026-2027 Timelines the digital financial system. Timelines economies. development partners on CBDC feasibility and design. assessment and proposed next steps.

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1. Strengthened Data Governance: The development of a comprehensive data governance framework will protect consumer data rights and build public confidence in the digital financial system. 4.4.2 Central Bank Digital Currency (CBDC) Implementation A Central Bank Digital Currency (CBDC) is a digital form of sovereign currency, issued and backed by the central bank. CBDCs have attracted significant global interest as a potential instrument to enhance financial inclusion, improve the efficiency of domestic and cross- border payments, reduce the cost of cash management, and provide a secure and stable digital payment instrument. Globally, a growing number of central banks are at various stages of research, piloting, or deployment of CBDCs. The RBM is committed to conducting a thorough, evidence-based assessment of the potential benefits, risks, and design considerations associated with a Malawi CBDC. This will involve creating a Proof of Concept to assess the feasibility of developing a CBDC. 4.4.2.1 Implementation Timelines and Expected Outcomes

models, and design considerations, with a particular focus on the experience of African central banks and comparable developing economies.

service providers, government agencies, consumer groups, and development partners on CBDC feasibility and design.

1. Develop and publish a CBDC Proof of Concept, setting out the RBM's 2026-2027
   assessment and proposed next steps.

2. Commission in-depth research on global CBDC developments, 2025-2026

3. Conduct structured consultations with financial institutions, payment 2026-2027

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1. Subject to the outcome of the Proof of Concept, develop technical and 2027-2030
   regulatory frameworks for a potential CBDC pilot. Yet despite this demonstrable interaction, Malawi currently lacks a defined regulatory framework to govern virtual assets and the service providers that facilitate their use. This absence creates legal uncertainty and exposes consumers, financial institutions, and the broader financial system to significant risks, including fraud, money laundering, and terrorist i. Informed Policy Decision-Making: A Proof of Concept will provide a sound evidence financing. It also constrains Malawi's ability to implement effective AML/CFT/CPF controls base for determining the appropriate role, if any, of a CBDC in Malawi's payments in a sector whose domestic footprint is already established and growing. To address this gap, the RBM will establish a proportionate, risk-based regulatory framework ii. Data-Driven Insights: Findings will enable the RBM and relevant stakeholders to to govern the responsible adoption and oversight of virtual assets and VASPs in Malawi. make well-informed decisions regarding CBDC design and adoption. The framework will be aligned with the standards and recommendations of the Financial Action Task Force (FATF) and other relevant international bodies, ensuring that Malawi iii. Improved Financial Inclusion Potential: Assessing the ability of a CBDC to reach meets its global compliance obligations while creating the enabling conditions for virtual underserved populations will inform strategies to bridge the financial inclusion gap. assets to contribute meaningfully and safely to the national payment ecosystem. 4.4.3.1 Implementation Timelines and Expected Outcomes 4.4.3 Virtual Assets and Virtual Asset Service Providers (VASPs) Virtual assets, including cryptocurrencies and stablecoins, are no longer peripheral innovations. They are increasingly embedded in global payment and financial systems, reshaping how value is stored, transferred, and settled across borders. Their potential to enhance payment efficiency, broaden financial inclusion, and reduce the cost of cross- border transactions makes them directly relevant to the 2030 Framework. Critically, this is not merely a future consideration for Malawi. The Sectoral Risk Assessment of the VA and VASP sector, conducted in June 2025, confirmed that virtual assets are already interacting with the domestic payment and banking system. This finding establishes that virtual asset activity in Malawi is not confined to isolated or informal channels, it is touching the regulated financial system in ways that have direct implications for payment system integrity, consumer protection, and financial stability. It is therefore essential that the 2030 Framework explicitly recognises virtual assets as an emerging payment instrument that must be understood, monitored, and appropriately governed, rather than treated as an activity outside the payment system's purview.

2. Continuously monitor market developments and the evolution of 2026-2030

3. Undertake a targeted review of international best practices for 2025-2026 3) Draft and consult on virtual asset regulations and a 2026-2028 international standards, and refine the regulatory framework 2) Engage stakeholders to inform the development of the regulatory 2026-2027
   comprehensive legal framework. virtual asset regulation. accordingly. approach. Timelines

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framework to govern virtual assets and the service providers that facilitate their use. This absence creates legal uncertainty and exposes consumers, financial institutions, and the broader financial system to significant risks, including fraud, money laundering, and terrorist Yet despite this demonstrable interaction, Malawi currently lacks a defined regulatory financing. It also constrains Malawi's ability to implement effective AML/CFT/CPF controls in a sector whose domestic footprint is already established and growing. To address this gap, the RBM will establish a proportionate, risk-based regulatory framework to govern the responsible adoption and oversight of virtual assets and VASPs in Malawi. The framework will be aligned with the standards and recommendations of the Financial Action Task Force (FATF) and other relevant international bodies, ensuring that Malawi meets its global compliance obligations while creating the enabling conditions for virtual assets to contribute meaningfully and safely to the national payment ecosystem. 4.4.3.1 Implementation Timelines and Expected Outcomes

1. Undertake a targeted review of international best practices for 2025-2026
   virtual asset regulation.

2. Engage stakeholders to inform the development of the regulatory 2026-2027
   approach.

3. Draft and consult on virtual asset regulations and a 2026-2028
   comprehensive legal framework.

4. Continuously monitor market developments and the evolution of 2026-2030
   international standards, and refine the regulatory framework accordingly.

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reduce uncertainty and create a predictable operating environment for legitimate market elevates their visibility, creates a structured basis for monitoring and reporting on social participants. outcomes, and signals to payment system participants that social responsibility is an integral part of their operating obligations. will help prevent the use of virtual assets for financial crime. The governance dimension reinforces the standards of transparency, accountability, and integrity expected of payment system participants and oversight bodies alike, and complements the broader regulatory reform agenda across the NPS. digital finance, attracting reputable market participants and investment. The RBM is committed to embedding ESG considerations into its payment system oversight framework over the strategy period to 2030. This will include reviewing the legal and asset transactions and reinforce Malawi's standing in international financial integrity regulatory framework through an ESG lens, developing guidance for payment system assessments. participants on ESG responsibilities, and engaging with international partners and standard- setting bodies to ensure Malawi's approach reflects evolving global best practice. 4.4.4 ESG and the National Payment System 4.4.4.1 Implementation Timelines and Expected Outcomes Environmental, Social, and Governance considerations are increasingly shaping how financial systems are designed, regulated, and evaluated globally. For Malawi, integrating ESG principles into the National Payment System is not merely a matter of alignment with international trends but a reflection of the country's own development priorities and the RBM's commitment to a payment system that is responsible, inclusive, and resilient. The environmental dimension is particularly pressing given Malawi's acute vulnerability to climate change. The physical and economic impacts of floods, droughts, and erratic rainfall pose systemic risks to financial stability that the payment system cannot insulate itself from. Building environmental responsibility into payment system oversight, including considering the climate resilience of critical payment infrastructure, is therefore a prudent regulatory concern. The social dimension speaks directly to the NPS's core mandate of promoting a safe, efficient, inclusive, and affordable payment system. Ensuring that payment services are accessible to all segments of the population, that transaction costs do not exclude low- income users, and that consumers are adequately protected are not new obligations; they are existing NPS commitments. Framing them explicitly within the ESG framework, however, ii. Increased Adoption of Eco-Friendly Digital Payment Solutions: Promoting green

1. Reduced Environmental Footprint of Payment Operations: Integrating ESG iv. Global Alignment: Compliance with FATF standards will facilitate cross-border virtual i. Regulatory Clarity: Clear legal definitions and guidelines for virtual asset activities will 2) Review the legal and regulatory framework, provide insights into 2025 - 2030 finance through the regulatory framework will align payment innovations with Malawi's considerations into payment systems will contribute to lower carbon emissions and ii. Risk Mitigation: Robust AML/CFT/CPF measures and consumer protection provisions iii. Market Innovation: A well-regulated framework will foster responsible innovation in 1) Collaborating with relevant departments and stakeholders to 2025 - 2030 ESG principles, and outline strategies to mitigate climate change climate resilience strategies and position the payments sector as a driver of the Timelines Timelines reduced resource consumption across the payments value chain. enhance understanding of ESG principles. 3) Ensure alignment with global ESG standards and best practices 2025 - 2030 risks. country's low-carbon economic transition.

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outcomes, and signals to payment system participants that social responsibility is an integral part of their operating obligations. elevates their visibility, creates a structured basis for monitoring and reporting on social The governance dimension reinforces the standards of transparency, accountability, and integrity expected of payment system participants and oversight bodies alike, and complements the broader regulatory reform agenda across the NPS. The RBM is committed to embedding ESG considerations into its payment system oversight framework over the strategy period to 2030. This will include reviewing the legal and regulatory framework through an ESG lens, developing guidance for payment system participants on ESG responsibilities, and engaging with international partners and standard- setting bodies to ensure Malawi's approach reflects evolving global best practice. 4.4.4.1 Implementation Timelines and Expected Outcomes

enhance understanding of ESG principles.

1. Review the legal and regulatory framework, provide insights into 2025 - 2030

ESG principles, and outline strategies to mitigate climate change risks.

1. Reduced Environmental Footprint of Payment Operations: Integrating ESG
   considerations into payment systems will contribute to lower carbon emissions and reduced resource consumption across the payments value chain.

2. Increased Adoption of Eco-Friendly Digital Payment Solutions: Promoting green
   finance through the regulatory framework will align payment innovations with Malawi's climate resilience strategies and position the payments sector as a driver of the country's low-carbon economic transition.

3. Collaborating with relevant departments and stakeholders to 2025 - 2030

4. Ensure alignment with global ESG standards and best practices 2025 - 2030

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Payment Systems 4.5.1 Current Engagement and Opportunities 4.5 Strategic Objective Five: Strengthen Integration with Regional and Cross-Border Malawi's participation in regional payment systems, including the Pan-African Payment and Settlement System (PAPSS), the SADC Real-Time Gross Settlement system (SADC RTGS), the COMESA Regional Payment and Settlement System (REPSS), and the COMESA Digital Regional Payment Platform (DRPP), is vital for enhancing cross-border trade, improving transaction efficiency, and deepening regional financial integration. Despite Malawi's existing connectivity to these systems, material gaps persist in the areas of interoperability, regulatory harmonisation, and active stakeholder engagement. Strengthening Malawi's participation and integration requires deliberate collaboration with regional counterparts, alignment of the domestic regulatory framework with regional standards, and targeted infrastructure enhancements to bridge current connectivity gaps. 4.5.1.1 Implementation Timelines and Expected Outcomes

1. Conduct industry consultations with the National Switch, banks, mobile 2025-2030
   money operators, and other PSPs to assess institutional readiness for integration with cross-border payment channels and to identify specific integration challenges.

2. Collaborate with regional partners, including SADC, COMESA, and 2025-2030
   PAPSS, to harmonise Malawi's regulatory framework with applicable regional guidelines and standards. 3) Monitor system adoption rates, cross-border transaction flows, and 2025-2030 efficiency gains on an ongoing basis, and report findings to relevant governance bodies.

3. Regulatory Alignment: Harmonised rules and standards will facilitate smoother iii. Greater Financial Inclusion: Expanded access to regional financial services will iv. Economic Growth: Strengthened cross-border trade facilitation will support broader
   international payment flows and reduce compliance friction for PSPs operating across benefit businesses and consumers across Malawi, including those in border and rural economic expansion and enhance Malawi's integration into regional and continental i. Improved Cross-Border Efficiency: Deeper regional integration will deliver faster, more borders. communities. value chains. Timelines cost-effective cross-border transactions, supporting trade and economic activity.

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1. Improved Cross-Border Efficiency: Deeper regional integration will deliver faster, more
   cost-effective cross-border transactions, supporting trade and economic activity.

2. Regulatory Alignment: Harmonised rules and standards will facilitate smoother
   international payment flows and reduce compliance friction for PSPs operating across borders.

3. Greater Financial Inclusion: Expanded access to regional financial services will
   benefit businesses and consumers across Malawi, including those in border and rural communities.

4. Economic Growth: Strengthened cross-border trade facilitation will support broader
   economic expansion and enhance Malawi's integration into regional and continental value chains.

Timelines

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5.0 IMPLEMENTATION AND MONITORING APPROACH

5.1 Stakeholder Collaboration 5.0 Implementation and Monitoring Approach defined outcomes, and identify challenges or deviations requiring attention. Implementation ACRONYMSThe 2030 Framework has been developed through a consultative process, with substantive will be reviewed at least annually, and findings will be reported to the NPC, relevant engagement from the RBM, the NPC, the Government through the Ministry of Finance and government authorities, and other key stakeholders. Economic Affairs, payment service providers, other regulatory authorities, including FIA and Key performance indicators (KPIs) will be established for each strategic objective and MACRA and development partners. The Consumers Association of Malawi (CAMA) was associated initiative, providing a quantitative basis for assessing progress and informing also engaged to ensure that the Framework reflects the needs and perspectives of ordinary mid-course corrections. The NPC will play a central role in the governance of the M&E consumers. process, convening regular review meetings to assess progress and provide strategic Successful implementation of the 2030 Framework will require the sustained collaborative direction. effort of all stakeholders across the payments ecosystem. The RBM will convene regular Where circumstances change materially, whether due to shifts in the domestic or global multi-stakeholder forums to review progress, address implementation challenges, and payments landscape, advances in technology, or changes in the regulatory environment, ensure that the Framework remains responsive to developments in the payments the Framework will be reviewed and updated accordingly, ensuring that it remains a living landscape. Stakeholders are encouraged to integrate the objectives of this Framework into and relevant guide to the reform of Malawi's national payments system. their own institutional strategies and operational plans. 5.2 Resource Allocation and Prioritisation The effective implementation of the 2030 Framework will require the adequate allocation of both human and financial resources across the payments ecosystem. The RBM calls on all participating institutions to integrate this Framework into their strategic plans and allocate the necessary resources to support its implementation. In determining priorities, preference will be given to initiatives with the highest potential to advance the NPS's overall vision, financial inclusion, and systemic resilience. The RBM will additionally seek to leverage support from international development partners, regional bodies, and technical assistance providers where appropriate, and will maintain a forward-looking perspective on resource mobilisation to ensure that the ambitions of the 2030 Framework are adequately supported. 5.3 Monitoring, Evaluation, and Reporting The RBM will implement a structured monitoring and evaluation (M&E) framework to track the implementation of activities under each strategic objective, assess progress against

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will be reviewed at least annually, and findings will be reported to the NPC, relevant government authorities, and other key stakeholders. defined outcomes, and identify challenges or deviations requiring attention. Implementation Key performance indicators (KPIs) will be established for each strategic objective and associated initiative, providing a quantitative basis for assessing progress and informing mid-course corrections. The NPC will play a central role in the governance of the M&E process, convening regular review meetings to assess progress and provide strategic direction. Where circumstances change materially, whether due to shifts in the domestic or global payments landscape, advances in technology, or changes in the regulatory environment, the Framework will be reviewed and updated accordingly, ensuring that it remains a living and relevant guide to the reform of Malawi's national payments system.

ACRONYMS

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6.0 CONCLUSION

The Malawi National Payments System Vision and Strategy Framework for 2026 to 2030 establishes a comprehensive, ambitious roadmap for transforming the country's payments 6.0 Conclusion landscape. Grounded in a clear vision for a digital, inclusive, and resilient NPS, the Framework articulates five strategic objectives that collectively address the most pressing challenges and opportunities facing Malawi's payments ecosystem over the period ahead. By prioritising the modernisation of the regulatory framework, upgrading core payment infrastructure, promoting the adoption of digital financial services, exploring emerging financial technologies, and deepening regional integration, the 2030 Framework charts a deliberate and forward-looking course for Malawi's payments sector. In doing so, it supports the broader national ambition of achieving a digital economy, as envisioned in Malawi Vision 2063, and advances the RBM's mandate to ensure the safety, efficiency, and integrity of the NPS. The successful execution of this strategy will require unwavering commitment and genuine collaboration across all stakeholders, including the NPC, Government, financial institutions, payment service providers, regulatory authorities, development partners, and the consumers whom the NPS ultimately serves. The Reserve Bank of Malawi is confident that, with this collective resolve, Malawi will emerge from the 2026-2030 period with a national payments system that is not only modern and competitive, but also genuinely inclusive, resilient, and worthy of the trust placed in it by all Malawians. The Reserve Bank of Malawi remains steadfast in its commitment to leading this transformation with prudence, transparency, and integrity.

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