Roles of Regulator in Mobile Money Deployment Mobile Money (MM) is hailed for accelerating financial inclusion and its potential in a greater multitude of unbanked global citizens into the formal financial systems. It falls within the domain of Telecommunications and Financial Regulators/ Central banks. Mobile Money (MM) has emerged as a remedy for financial exclusion risk in developing countries. It’s important to state that Central Banks in emerging economies have a vast and vested interest in the success of mobile payment services. In fact Mobile payment services can contribute directly to the economic growth of the country. 1.Regulating MM presents simultaneous challenges and profound benefits. Regulatory and policy objectives have to be balanced with sensitive competitive market dynamics, innovation and market adoption. 2.The importance of policy and regulatory frameworks in mobile banking development has inspired empirical research reports enabling regulatory solution. 3.MM should meet typical financial objectives such as liquidity to meet the backup liquid reserves equaling total amount of issued e-money 4.MM electronic funds are not entitled to earn interest. Interest offers a huge incentive for luring people onto the service, but, financial regulators seem reluctant to grant this incentive; interest bearing deposits are considered an activity of banks. 5.Regulators also express concern over the effect of MM on monetary policy. The capacity of MM is dependent on non-anonymity. Developing countries commonly have insufficient identification systems; impeding sign up and access to formal financial and MM services. 6.MM risk assessments indicate low risk due to their low transaction limits, monitoring systems for every transaction, ID requirements for transactions and mobile network based locators. These offer alternative avenues to mitigate money laundering . 7.MM needs a comforting image to encourage uptake and perpetual use by customers. Regulators enhance consumer protection by setting out parameters for operators on transparent prices of MM products. 8.The third party network adopted by MM in East Africa has been essential to its sprawl and success. It extends the reach to remote areas and closer to people. This is one of the ways MM was able to surpass incumbent banks, compelling them to fast track the adoption of an agency banking model. The agent network is a key area of competitive advantage for competing MM operators. ADD MORE ROLES
Posted on: Wed, 03 Sep 2014 06:38:28 +0000
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