WITH mobile money increasingly popular in East Africa, a new report from the United Nations Conference on Trade and Development (UNCTAD) has called for region-wide rules to coordinate and harmonise regulations. “Governments in the region need to address issues relating to telecommunications and financial regulation to ensure that mobile money services bring the desired broad benefits, especially to the poor,” UNCTAD said.
The report focuses on the East African Community (EAC), a world leader in offering mobile money services and host to more than one quarter of all known such systems in Africa. Each month, more hundreds of millions of dollars are transferred in East Africa through the use of mobile phones, according to UNCTAD. The practice is burgeoning in developing regions where traditional banks and banking activities are in short supply, and most people lack access to financial services taken for granted in industrialised countries, the agency said, adding that mobile telephones offer a practical channel for obtaining these services, including sophisticated financial activities such as credit, savings, and insurance.
According to the GSM Association, which tracks mobile money deployments around the world, some 130 mobile money systems have been implemented since March 2012. Africa has taken the lead in mobile money implementation, with about 60 mobile money services already in place, more than a quarter of which are in the EAC. M-Pesa, operated by Safaricom of Kenya, is currently the most popular platform. It has 15 million active customers who transfer an estimated $658 million every month.
The rapid growth in mobile money services has added urgency to the need for an effective and robust legal and regulatory framework, UNCTAD said, noting that the successful growth of mobile money will require heightened coordination and cooperation across various regulatory and market sectors, such as telecommunications, banking and electronic commerce.
Building consumer confidence and trust in the systems is also essential, UNCTAD highlights in its report, with steps needed to address concerns related to consumer protection, registration and transaction limits, regulatory collaboration and the interconnection between telecommunication networks.