NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

The GSMA’s Code of Conduct for Mobile Money Providers, publicly launched in November, is putting customer experience at the center of mobile financial services by establishing common business principles to develop a sound industry. The Code came about as an effort to standardize compliance and risk mitigation mechanisms for service providers. The Code’s eight principles directly addresses critical compliance areas like money laundering and terrorist financing as well as key customer concerns, including:

· Safeguarding customer funds: Providers commit to taking steps to ensure that customer funds will be safe, including setting aside funds in a custodial account, ring-fencing funds to protect against attachment by creditors, mitigating the risk of insolvency of the bank or other entity in which customer funds are invested, and conducting transactions in real time whenever feasible.

· Training and monitoring those who interact with customers: Providers commit to screening, training and monitoring agents, staff and other parties who interact with customers to ensure that they offer safe and reliable services. Providers also accept responsibility for actions taken on their behalf by their agents under the provider-agent contract.

· Offering reliable services: Providers commit to ensuring reliable service provision through effective management oversight, network and system capacity testing, the establishment of reliable processes for clearing and settlement, and the development of effective business continuity and contingency plans.

· Ensuring the security of mobile money services: Providers commit to taking robust steps to ensure the security of the mobile network and channel, including developing appropriate security policies and processes, building a secure network, system and applications, and monitoring systems and networks to detect potential security violations.

· Providing for proper disclosure and customer education: Providers commit to effectively disclosing information about fees and terms and conditions, and to educating customers on how to use mobile money services safely.

· Effectively addressing customer complaints: Providers commit to developing effective mechanisms for addressing customer complaints, including the development of complaint policies and procedures, the availability of customer service support, and access to external recourse mechanisms if internal resolution fails.

· Protecting customer data: Providers commit to complying with good practices and relevant regulations governing customer data privacy. They will effectively inform customers of providers’ data privacy practices and customers’ rights with respect to their personal information, affording customers meaningful choice and control over their personal information, and limiting the personal information that is collected, retained, used or shared.

So far, the CEOs of mobile operator groups Airtel, Avea, Axiata, Etisalat, Millicom, MTN, Ooredoo, Orange, Telenor, Vodafone and Zain have endorsed the Code of Conduct. These operator groups represent 82 mobile money deployments in 51 countries. So their commitment to the Code’s principles will have a profound impact on tens to hundreds of millions of mobile money users, strengthening the entire digital financial ecosystem.

Beyond adherence to these principles, mobile money providers that have endorsed the Code will work with the GSMA and with selected technical experts to develop implementation tools and a technical assistance program. These will assist both the groups and the country-level providers to build all the necessary policies, processes and practices and to monitor their effectiveness, first through a self-assessment process and later through a robust certification regime.

By establishing minimum requirements that all providers must meet with respect to their customers, the Code of Conduct will ensure that customers are treated fairly and that customer funds are safe. These measures, applied consistently by all providers, will ensure high quality of services and contribute to customer confidence in mobile money services and in the broader digital ecosystem. We welcome feedback from all concerned stakeholders to help ensure that key customer concerns are properly addressed as we proceed with this initiative.

View the Code of Conduct for Mobile Money Providers

Jeremiah Grossman is Mobile Money Regulatory Manager at GSMA.