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Jordanian Central Bank Outlines Regulatory Framework for Electronic Payment Systems

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Amman, Jordan - The Jordanian Central Bank (CBJ) has outlined its regulatory framework for electronic payment systems, aimed at ensuring the safety and efficiency of these critical financial infrastructure components.

Oversight and Supervision Policy

The CBJ’s oversight and supervision policy on the national payments system aims to regulate, oversee, and supervise entities carrying out activities related to electronic payment and money transfer services. These entities are required to obtain a license from the CBJ and comply with relevant legislation at all times.

Identifying Potential Risks

According to the CBJ, achieving the highest level of safety and protection for these systems is crucial, particularly in light of the rapid pace of technological innovation in the payments industry. The regulator has identified three major potential risks to payment systems:

  • Operational Risk: risk of loss or damage due to inadequate procedures or human error
  • Systemic Risk: risk of widespread disruption to the payment system
  • Credit Risk: risk of default or non-payment by customers

“To mitigate these risks, we will monitor and assess risk management frameworks and practices of electronic payment and money transfer services,” said a CBJ spokesperson. “We will also encourage innovation and regulate financial technology that reduces the cost of providing these services and enhances interoperability.”

Role of the Central Bank

The CBJ has emphasized its role as the main regulator of retail payment systems, instruments, and means, responsible for setting out enabling legislation and encouraging service providers to continuously develop these systems.

Managing Payments Technology and Innovation

In terms of managing payments technology and innovation, the CBJ recognizes the importance of ensuring seamless, instant, safe, and cost-effective payments. The regulator is committed to achieving this through its oversight and supervision functions, which include:

  • Monitoring and Assessing Risk Management Frameworks: regularly assessing the risk management frameworks and practices of electronic payment and money transfer services
  • Encouraging Innovation: promoting innovation in the payments industry while ensuring safety and efficiency
  • Regulating Financial Technology: regulating financial technology that reduces the cost of providing these services and enhances interoperability

Conclusion

The CBJ’s regulatory framework for electronic payment systems aims to strike a balance between promoting innovation and ensuring the safety and efficiency of these critical financial infrastructure components. By doing so, the regulator hopes to promote confidence in the payments system and contribute to the overall stability of the Jordanian economy.

Key Takeaways:

  • The Jordanian Central Bank has outlined its regulatory framework for electronic payment systems.
  • The CBJ aims to regulate, oversee, and supervise entities carrying out activities related to electronic payment and money transfer services.
  • The regulator has identified three major potential risks to payment systems: operational risk, systemic risk, and credit risk.
  • The CBJ will monitor and assess risk management frameworks and practices of electronic payment and money transfer services.
  • The regulator will encourage innovation and regulate financial technology that reduces the cost of providing these services and enhances interoperability.

Sources:

  • Jordanian Central Bank (CBJ) regulatory framework for electronic payment systems
  • CBJ spokesperson interview