What is Mobile Money and How is it Governed?

We have all been hearing about mobile money, but do we know what it is really about or how it is governed? By the end of this article, you will understand what mobile money is, the bodies responsible for regulating mobile money, the participants of mobile money, its benefits and the laws by which it is governed in Nigeria.

What is Mobile Money?

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.

Why Push for Mobile Money?

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 do not 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.

Mobile Money Participants

Participants of Mobile Money system are grouped into 6 (six):

  • Regulators
  • Mobile Money Operators
  • Infrastructure Providers
  • Other Service Providers
  • Consumers
  • Mobile Money Agents

Who Regulates Mobile Money?

  1. The Central Bank of Nigeria
  2. The Nigerian Communications Commission

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. Guidelines on Mobile Money Services in Nigeria.

Mobile Money Operators

  1. Banks
  2. Corporate Organizations

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.

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.

Infrastructure Providers

These are organizations providing infrastructure that enable switching, processing and settlement facilities for mobile money services. Settlement here refers to Inter-Scheme Settlement.

There are 2 (two) Infrastructure Providers;

  1. Telecommunications: Telecommunication companies play the important role of providing the infrastructure to drive the exchange of messages for mobile payments.
  2. Inter -Scheme Settlement: The role of Inter-Scheme Settlement Provider shall be to provide net positions of transactions across schemes to the inter-bank settlement system to affect the finality of payment for services consummated across two different Schemes by various participants.

Other Service Providers

The CBN recognizes that, with the evolution of the mobile money system , spin-off services would be identified by MMOs (Mobile Money Operators) which can be outsourced to entities with specialized skills and resources to support such services in a more efficient and effective manner. The service providers may employ the infrastructures of the MMOs to provide services to the end users.


These are end users of mobile money services.

Mobile Money Agents

The activities of Mobile Money Agents shall be guided by the provisions of the Guidelines on Agent Banking and Agent Banking Relationship in Nigeria.

Benefits of Mobile Money

Since the introduction of Mobile Money system in Nigeria, it is easy to see how well it has benefited the general public at large. Below are a few of those benefits;

  • Fast: It allows for quick transfers and payment of bills.
  • Convenient: It can be done from the comfort of your home or in desperate situations where there are no banks available or in busy market places.
  • Multi-faceted: It can be used to transfer funds, receive, store, pay bills, buy credit and so much more.
  • Secure: It is protected by laws then enable it to be and remain secure.


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. Most mobile money services are offered by local mobile telecoms operators who have received a license to operate electronic payments services by the CBN.

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!

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