The Central Bank of Kuwait continues to leverage its strategic tools for a thorough analysis of electronic payment behaviors, marking a new step in supporting and strengthening digital economy operations. This is done through periodic reports for payment service providers, which assess the efficiency of digital systems and the level of customer adoption.
Moreover, by monitoring the volume and value of electronic payment transactions, analyzing them by economic sectors, and offering a detailed overview of electronic payment behaviors in each sector, the Central Bank aims to provide a comprehensive evaluation of sector performance and promote the growth of digital economy trends.
In this context, the Central Bank of Kuwait, as stated in an official letter reviewed by Al-Anba, has requested that all payment and cash service providers, along with operators of electronic payment systems, submit a set of periodic reports.
The most notable of these is a report detailing the number of electronic payment service operations, which includes the total number of payment transactions conducted during the specified period and the value of these transactions carried out by customers. This report aims to analyze the overall performance of electronic payment services and assess the extent of their usage among customers.
Technically, this report is designed to monitor the growth and expansion of electronic payment services, evaluate the efficiency of payment systems, and gauge customer acceptance. It also seeks to identify patterns in digital financial operations, providing insights into future trends. The data gathered in the report is instrumental in enhancing policies for regulating the electronic payment sector and in the development of payment infrastructure to meet the growing demand.
The Central Bank has required those addressed in its letter to submit a report detailing the number of customers, the number of electronic payment transactions, and their value, categorized according to the sectors linked to the payment transaction code. This should align with the updated list of descriptions and codes for electronic payment methods, applicable to both point-of-sale devices and the electronic payment gateway. The report will reflect the flow of financial transactions across various sectors, such as retail, services, and others.
This report aims to assess the level of digital economic activity across various sectors and provide a detailed analysis of electronic payment behaviors within each sector. By doing so, it helps regulatory authorities design financial policies to promote the use of electronic payments in sectors with lower adoption rates, while also supporting companies in refining their digital payment strategies.
The recipients of the Central Bank’s directive are now required to submit a report detailing customer transactions based on the electronic payment method used. This includes specifying the use of debit cards, credit cards, and digital wallets for each of the point-of-sale devices, electronic payment links, or the electronic payment gateway.
This report measures customer preferences for different payment methods and identifies behavioral patterns in the use of electronic payment systems. This information contributes to enhancing the most frequently used systems, improving the user experience, and providing service providers with valuable insights to better target and serve their customers.
The recipients of the Central Bank’s directive will be required to submit a report on the movement of customers using electronic payment services at point-of-sale devices. This report must include the number of devices and the total fees collected from renting these devices in dinars. The purpose of this report is to evaluate the efficiency of electronic payment service providers, assess their financial performance, and measure the extent of point-of-sale device deployment in the market.
The reports companies are required to submit to the Central Bank include a detailed account of the movement of clients of electronic money service providers, showing the value of stored electronic money and the value of electronic payment transactions carried out. The goal of this report is to monitor the volume of funds stored in electronic wallets, assess the use of electronic money in the market, ensure proper control over electronic money to mitigate associated risks, and promote the wider adoption of electronic money.
The Central Bank’s requirement for entities under its supervision to submit these activity reports is based on Article (39) of the Instructions for Regulating Electronic Payment of Money, issued on May 14, 2023. This article mandates that service providers supply all necessary data and information to the Central Bank for the purposes of supervision, control, and inspection, following the mechanism it determines.
It also grants the Central Bank the right to review all books, records, documents, and minutes of work, and prohibits any actions that could hinder the supervision, control, and inspection process. Full cooperation with these tasks is required, and entities must submit periodic reports, data, and information as specified by the Central Bank in its relevant instructions.
The Central Bank has requested that the required reports be submitted within 10 working days from the end of the period for which the report was prepared, in accordance with the specified time frame for each report.
Submission of semi-annual financial statements from service providers
The Central Bank has mandated that electronic payment service providers, electronic money service providers, and electronic payment system operators submit a copy of their semi-annual financial statements, reviewed by an auditor, as well as their annual financial statements, audited by an auditor.
Importantly, these reports must be provided within a maximum period of 45 days from the end of the period for which the financial statements were prepared. It is also required that these financial statements be prepared using the same principles applied to the final financial statements at the end of each year.
