Timor-Leste cabinet approves draft decree requiring businesses to accept electronic payments

Implications for lenders

If the decree is published, more business sales may pass through electronic channels, which can give lenders transaction records to support credit assessment of small merchants within the six months compliance window and after. Lenders can also prepare to collect repayments through the same electronic channels, while noting that exempt street traders and remote-area borrowers may still rely on cash.

Implications

Facts

On 28 October 2026 Timor-Leste's Council of Ministers approved a draft Decree-Law on the Legal Framework for the Use of Electronic Payment Instruments in the Conduct of Economic Activities, according to the state news agency TATOLI. It was presented by the Vice Prime Minister and Coordinating Minister of Economic Affairs and the Governor of the Banco Central de Timor-Leste (BCTL).

The draft requires economic operators to provide electronic payment instruments and accept electronic payments. It applies to economic operators nationwide, to payment service providers authorised by BCTL, and to the public administration and other public bodies. Street traders are exempt, as are activities in remote areas that lack the technical, technological or infrastructure conditions to use electronic payments.

The decree-law would enter into force on the first day of the month after its publication, and covered operators would have six months to comply. ¹ The stated aims are greater efficiency, security, transparency and traceability of transactions and the development of the national payment system. The reports do not mention penalties, transaction thresholds or which payment instruments qualify.

Analysis

The decision follows BCTL's launch of the TuQR national QR payment system and the Ti-FAST platform in September 2026, which gave merchants a national system for accepting electronic payments. A legal obligation shifts the question from availability to adoption by businesses.

The remote-area exemption matters for reach. Rural poverty was 44.5% against 18.4% in urban areas in the 2024 living standards survey, ^{2 3} and about 86% of poor people live in rural areas. ⁴ If exemptions are drawn widely, the obligation would mainly cover Dili and other towns, where poverty is lower, and leave much of the rural cash economy as it is.

Counterpoints and uncertainties

The decree is a draft approved by the cabinet and has not been published; its final text, penalties and qualifying instruments are not yet known. Broad use of the remote-area exemption, limited connectivity or merchant resistance to fees could slow adoption. The six months window may prove short for small operators.