Protecting Mobile Money Customer Funds in Civil Law Jurisdictions (original) (raw)
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The provision of financial services through mobile phones is a powerful tool to foster financial inclusion, and thus economic growth, in developing countries. However, it raises important regulatory issues. Given the vulnerability of most potential customers of these services, the protection of customer funds is important. In common law countries, trust accounts are an effective response to these concerns. In civil law jurisdictions however, in the absence of trusts, protection of customer funds is more difficult. This paper identifies the theoretical and practical problems that regulators in civil law jurisdictions might face when trying to protect customer funds and explores how fiduciary contracts, mandate contracts and direct regulation might be used to achieve this goal. It offers a series of practical recommendations for policymakers in developing countries that provide a range of regulatory options that combine private law and regulation.
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The emergence of mobile money and other new forms of payment has changed the sovereign foundations of money. Starting as a DFID funded project in Kenya, mobile money has now spread to many countries including Malaŵi. This thesis looks at the regulatory issues that mobile money poses, and the risks that this alternative form of payment poses to the financial system. The thesis argues that the traditional regulatory architecture of supervising the financial services is ill-suited to supervise mobile money. There are essentially two models of mobile money: telco-led and bank-led. The first is an innovation by telecommunication operators and utilises the small messaging service. There is no requirement to own a bank account. The bank-led model is linked to a bank account. The regulatory approaches to these two models are different. Unlike the telco-led, the bank-led model is under prudential regulation. This has manifested itself in the way the services have developed. The telco-led mod...
POLICIES, REGULATIONS AND PROCEDURES AND THEIR EFFECTS ON MOBILE MONEY SYSTEMS IN UGANDA
The introduction of mobile money systems in emerging economies has enabled the would-be unbanked population to gain access to financial services. The number of mobile money users and value of transactions is on the increase. This rapid growth of mobile money services and value transactions in emerging economies is attributed to the light-touch regulatory framework which allows minimal limitations on who should operate mobile money system and few restrictions on who can function as an agent. These increases both in services and transactions indicate that mobile money systems hold a lot of valuable customer financial information that needs to be jealously protected against information breaches and abuse by the various stakeholders in the mobile money ecosystem. Taking an interpretive qualitative approach, Activity Theory (AT) has been used to analyse the mobile money management activities focusing on information security policies, regulations and procedures. In order to comprehend the aspects revealed by the Activity Theory analysis that raise information security management concerns in mobile money operations, Mobile Network Operator (MNO) management issues, in terms of the security of mobile money operations, are detailed. Our findings look at the reasons given by various stakeholders for information security management gaps in mobile money operations in emerging economies. Our findings disclose the roles of MNO staff, who are not information security experts, in the development and compliance monitoring of policies, regulations and procedures related to the safety of financial information in mobile money systems.
Law, mobile money drivers and mobile money innovations in developing countries
Forthcoming: Technological Forecasting and Social Change, 2021
This study investigates how the rule of law (i.e. law) modulates demand- and supply-side drivers of mobile money to influence mobile money innovations (i.e. mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money) in developing countries. The following findings from Tobit regressions are established. First, from the demand-side linkages, law modulates: (i) bank accounts and automated teller machine (ATM) penetration for negative interactive relationships with mobile money innovations and (ii) bank sector concentration for a positive interactive relationship with mobile money accounts. Second, from supply-side linkages, law interacts with: (i) mobile subscriptions for a negative relationship with the mobile phone used to send money; (ii) mobile connectivity coverage for a negative nexus on the mobile phone used to receive money and (iii) mobile connectivity performance for a negative influence on the mobile phone used to send/receive money. Policy implications are discussed in the light of enhancing the rule of law as well as improving mobile phone subscription, connectivity and performance dynamics.