Friday
August 25
2017

Viewpoint: Why I believe the US State Department is wrong about mobile money in Africa

The US Department of State recently released a report that identified mobile money services as particularly susceptible to money laundering in Africa. It cites services like M-PESA and M-Shwari as “services [that] remain vulnerable to money laundering activities”.

According to the World Bank, the total money transfers by African migrants to their region or country of origin surged by 3.4% to $35.2 billion in 2015. And mobile money services represent a growing proportion of these remittances both domestically and internationally.

Despite being over ten years old and driving financial inclusion for tens of millions of unbanked people across the continent, mobile money is still a nascent industry. Given recent research demonstrating mobile money’s strong impact on poverty reduction, this type of statement could negatively impact the growth of such services and the reputation of the sector as a whole. Security and regulatory scares can kill confidence and stifle growth.

It’s critical that mobile money providers adhere to strict anti-money laundering (AML) regulations and government bodies highlight issues in the interest of their citizens and the wider market.

Photo courtesy of Simon Berry.

Source: Banking Technology (link opens in a new window)

Categories
Technology
Tags
Africa, digital payments, financial technology, fintech, M-Pesa, mobile finance, mobile money