Now we’ve all been hearing about mobile money, but what is it really about?
What Is Mobile Money and What Laws Govern It?
Mobile money is an electronic wallet service which is available in many countries and allows users to store and manage money in an account linked to a mobile phone, similar to a bank account. Mobile money users can send money to other people, pay bills, and purchase many things, including mobile airtime. The safe and easy electronic payments make it a popular alternative to bank accounts in a lot of countries. It can be used on both smartphones and basic feature phones.
The push towards mobile money by the regulatory bodies is meant to act as a way to get financial inclusion for the unbanked. More than 90 million Nigerans are unbanked, meaning a substantial part of the population don’t use financial institutions of formal methods to save and borrow money. The movement, if implemented right will also act as a push in the Government’s fight for a cashless society as it allows for the execution of cashless transactions with without a hitch.
The mobile money system in Nigeria refers to the various components required to deliver mobile money to the banking and non-banking community. The providers of these services and solutions shall be required to operate within the defined regulatory framework specified by the CBN. The CBN is responsible for defining and monitoring the mobile money systems in Nigeria.
Mobile money is typically run by Mobile money operators.
The Mobile Money Operators are the Lead initiators for the mobile scheme and are responsible for ensuring that the various solutions and services within an approved mobile payment scheme meets the entire requirements as defined by the regulators.
The Regulators of the mobile money business are; the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC). Most mobile money services are offered by local mobile telecoms operators who have received a license to operate electronic payments services by the CBN.
Mobile Money Operators are required to connect to the National Central Switch (NCS) for the purpose of ensuring interoperability of all schemes in the system. A scheme operator can either be a bank or a licensed corporate organisation.
This is all a new frontier in Nigeria and thus we expect to see more laws being made as well as new guidelines on it from CBN as it becomes a widely accepted payment modal.
As mobile money is a similar concept to a bank account, funds held in a mobile money account are protected by local financial regulations.
Mobile money providers and partners are required to check the identity of their users; making it much harder for fraudsters and criminals to use these services illegally.
Mobile money services also store a record of every transaction and account balance, so even if the phone or SIM card is lost or stolen, the user’s money is kept safe. Additionally, every transaction requires identification in the form of a secret PIN.
So rest assured that your money is safe!