With technical assistance from the USAID Economic Recovery and Livelihoods Program, the Central Bank of Yemen has adopted new regulations that will enable all Yemenis to utilize cashless transactions and mobile banking by the end 2023. The new regulations increase the accessibility of banking services throughout Yemen, enhance consumer protection, encourage innovation, and ensure the stability of the country’s payment systems. Transitioning toward a cashless society improves financial literacy, strengthens financial security, and stimulates economic growth.
The transformation of Yemen's financial landscape through modernized regulations for mobile financial services and financial consumer protection represents a turning point towards empowerment, inclusion, and economic prosperity,” said Dr. Kamal Abdulraqeeb, Head of the Central Bank of Yemen’s Payment System Department.
The Central Bank of Yemen has adopted new regulations that will enable cashless transactions and mobile banking to take place in the country by the end of 2023. The Central Bank developed the regulations with technical assistance from the USAID Economic Recovery and Livelihoods Program (ERLP).
The new regulations support the development of non-discriminatory financial services, giving all segments of society an equal opportunity to access and benefit from them. These services will open the country’s financial system to millions of Yemenis via their cell phones. Up to now, most of the country’s 32 million people have had very limited access to Yemen’s 19 banks due to their lack of geographical coverage. Once this system is in place, anyone with a cell phone, including those with no current access to Yemen’s financial system, can download an e-Wallet mobile app and safely and immediately start using electronic money to make transactions. These include money transfers, payments for goods and services, international transactions, and e-Commerce.
While digital payment methods have previously been available in Yemen, they have existed without specific regulations. The new regulations provide a solid and secure framework that enhances consumer protection, encourages innovation, and ensures the stability of the entire payment system to allow for wider adoption. Yemen’s businesses, such as supermarkets, gas stations, pharmacies, and butcheries, will be able to offer these services. This will work to stimulate economic growth and promote the government’s financial system.
Under these new regulations, salary payments to public sector workers, even those in remote areas, can be easily made by cell phone, saving workers a trip to their nearest bank or money exchange. Utilizing these services for payroll and disbursements will strengthen the government’s financial systems and enhance transparency and accountability. The new regulations will also enable banks to expand their digital services and facilitate transactions between bank accounts. With USAID ERLP support, Yemen’s Al-Qutaibi Islamic Bank launched the first integrated digital mobile app in Yemen to allow their clients to electronically pay for bills and loans, send remittances, and apply for loans.
Transitioning towards a cashless society reduces dependency on physical currency, mitigating risks such as theft and loss, and promotes a safe and more secure financial environment. Moreover, these regulations emphasize the importance of financial literacy and consumer awareness. These financial services will be available to all Yemenis by the end of the year.
USAID/ERLP
