Mobile Money, Mobile Regulation: What the "Savings Challenge" Means for Mobile Communications and Banking

University Of California-Irvine, Irvine CA

Investigators

Abstract

Mobile Money, Mobile Regulation: What the "Savings Challenge" Means for Mobile Communications and Banking Abstract In Kenya, over 6 million people subscribe to a service called M-PESA to send money to their friends and relatives cheaply and securely over their mobile phones. In the Philippines, people can remit money to family members on remote islands through a similar service called Globe GCASH, now used by 2 million people. Around the world, mobile phone-enabled money services like these are taking off. Given the rapidity of its emergence, "mobile money" is often being deployed in advance of regulatory guidelines. When telecommunications companies get into the business of money transfer and banking, there is the potential for a clash of cultures as well as risks to consumers, banks and the financial system itself. Who holds the deposits, and what do they do with them while they sit in people's accounts? If you lose your phone, do your savings go with it? This project relies on interviews with regulatory and industry participants; archival data collection and analysis; and ethnography in industry and regulatory sites to understand the debates and knowledge transfers around emerging regulations for mobile money. It asks where regulatory innovations come from; how regulators triangulate among industry and nonprofit actors; whether regulatory knowledge transfers between developing world countries have become more important than from the developed to the developing world; and whether the regulation of mobile money can be seen as an instance of regulatory convergence or capture. The research will enhance understanding of regulatory change under conditions of rapid technological and economic transformation. It has the potential to influence regulatory frameworks for mobile money. It will also contribute to refocusing development strategies from microfinance to microsavings. If various regulatory barriers can be overcome in a prudent manner that attends to risk, security and consumer protection, then mobile money for savings has the potential to transform the lives of the very poor, for whom the entry barriers and costs of savings are too high.