The growth of mobile moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More in Africa has been one of the great success stories in digital payments over the past decade. According to the GSMA 2019 State of the Industry Report on Mobile Money, around half of the world’s one billion mobile money accounts are located in Africa. In 2019, sub-Saharan Africa accounted for 469 million registered mobile money accounts generating $456.3 billion in transactions. This represents over $2,500 in transactions for each of the 181 million active accounts. Too good to be true?

A new InterpolName of the International Criminal Police Organisation. It dates back to 1923. Its activity extends to all crimes of common law and especially those related to drug and gold trafficking, counterfeiting of money and capturing criminals harbouring in a foreign country. Police forces from most countries in the world take part in this organisation. More report has found the mobile money industry in Africa is being exploited by organised crime groups – a trend only set to increase as the service is rolled out across the continent.

The ‘Mobile money and organized crime in Africa’  report presents an overview of the criminal exploitation of mobile money services, including fraud, money launderingThe operation of attempting to disguise a set of fraudulently or criminally obtained funds as legal, in operations undeclared to tax authorities, and therefore not subjected to taxation. Money laundering activities are strongly pursued by authorities and in most countries, there are strict rules for credit institutions to cooperate in the fight against money laundering operations, to declare and report any transactions that could be considered suspicious. More, extortion, human trafficking and people smuggling, the illegal wildlife trade and terrorism.

The prominent role that mobile money plays in African societies and economies, and the rapid pace at which its infrastructure has been developed, has enabled criminals to “exploit weaknesses in regulations and identification systems” and commit mobile money-enabled crimes.

A report by law firm DLA Piper states that “The mobile money system generally sits outside a country’s financial reporting system, making it almost impossible for authorities to monitor mobile money transactions. In Kenya, this has seen M-Pesa used to launder money, to bribe corrupt police officers, and as a paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More vehicle in kidnapping and extortion.”

Lack of robust identity checks

The report notes that a lack of robust identity checks to verify users combined with a need for greater law enforcement resources and training on mobile money-enabled crimes have created a financial system distinctly vulnerable to criminal infiltration.

Types of ID required to registerSee See-through register. More for a mobile money account are not standardized across Africa and acceptable documents range from national identity cards to company IDs, tax certificates and drivers licenses. While such a broad spectrum of acceptable IDs benefit the growth of mobile money services, it also increases their vulnerability to fraud, money laundering and other crimes.

A significant threat to national security

In parallel, despite progress in conviction rates for mobile money-enabled crimes, the technical expertise and equipment required to complete investigations can prove difficult to integrate into the court process. With mobile money poised for even greater growth in Africa, unless the vulnerabilities are addressed, these services pose a significant threat to consumers and national security.

By 2025, smartphone user rates in Sub-Saharan Africa alone are projected to rise from roughly 39 per centFraction of a currency representing the hundredth of the unit of account. More today to 66 per cent. Higher smartphone adoption, combined with a wider array of mobile money services on offer, will likely increase the number of transactions performed through smartphone apps.

“The evidence shows that criminals are already exploiting mobile money services in Africa. The anonymity that these services too often allow and the technical nature of the industry also present a challenge to law enforcement in investigating and prosecuting these crimes,” said Cyril Gout, INTERPOL Acting Director of Operational Support and Analysis. In 2017, a US State Department report expressed concern that African mobile money services were vulnerable to money laundering activities. In June 2020, mobile money platforms were banned in Zimbabwe and were accused of accelerating the fall in the value of the Zimdollar.

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