As US Department of State report expresses concern in regards to mobile money providers fearing they are vulnerable to money laundering activities. This fear has grown since international money transfer capabilities were integrated into programs such as M-Pesa (operating in 10 countries), or Safaricom’s M-Shwari in Kenya.
The State Department reports that remittances to Kenya from the US reached $1.55 billion in 2015 and $862 million between January and September 2016. US authorities fear that not enough monitoring is undertaken to detect and report suspicious activities despite Safaricom’s claim that they work hard to attain the highest standards. In fact, Safaricom is obliged to regularly supply reports in line with the Proceeds of Crime and Money Laundering Act of 2012. The telecommunication company’s partners are also required to abide by these standards.
Informal money transfers, however, are cause of greater concern. Mostly used in Kenya and Somalia, these are known as hawalas. They are difficult to track and don’t require senders or receivers to identify themselves. Also, they have no daily transfer limits, unlike M-Pesa which is limited to $1,400 a day.
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