Mobile Money Transfer Services: The Next Phase in the Evolution in Person-to-Person Payments
This paper reviews developments in mobile money transfers and its emerging ecosystem, its participants and business models. It also examines the implications of payment systems roaming across geographic borders with their respective legal and regulatory jurisdictions, as well as the emergence of mobile airtime as an alternative currency.
The paper analyzes the risk environment for mobile money in the context of both developed and emerging countries in light of the participation of banks and nonbank telecom firms. It outlines a number of considerations that should remain at the forefront of industry discussions:
- New mobile landscape will require dialogue between the regulatory authorities and telecom firms for financial services;
- Cross-border mobile payments may require improved customer-data sharing on an international basis;
- U.S. mobile payments services providers should be required to establish programs to mitigate the risk of money laundering;
- Converged regulatory authorities should examine consumer protection risks for potential gaps in regulatory oversight.
The paper concludes that policy makers, regulators and industry stakeholders should aim at developing risk-based regulation that is proportionate with the need to encourage innovation and efficiency in retail payments.
