How Can Regulators Protect Funds Held by Mobile Money Providers?

The success of mobile money services such as M-PESA has raised the question of how to regulate nonbanks—most notably mobile network operators, which are often well-placed to reach customers with affordable financial services due to their existing customer base, marketing capabilities, network of agents, physical distribution infrastructure, and experience with high-volume, low-value transactions. Yet regulators are often reluctant to permit operators to directly contract with customers for the provision of financial services. Chief among regulator concerns is how to protect customer funds.

These issues are examined in a new Focus Note by Michael Tarazi and Paul Breloff: Regulatory Approaches to Protecting Customer Funds for Nonbank E-Money Issuers.


-Jim Rosenberg

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