We need new thinking for the regulation of mobile money because of the novelty of the service. Banking has existed for at least 800 years. Over that time policymakers have developed a deep understanding of risks from banking, tools that address those risks, and how such tools fit together in a regulatory framework. By contrast, mobile money emerged in 2004, creating a range of risks to users and surrounding economies that we are only just starting to understand, and requiring new regulatory tools.

New thinking is required now because of the rapidly growing size of mobile money sectors. Initially launched in 2004, there are now over one billion mobile money accounts in 95 developing countries, processing a combined $US2 billion in transactions every day.

This paper aims to stimulate new thinking by identifying the functions of mobile money and risks to users’ funds and surrounding economies that can emerge through failure of a mobile money firm (MM firm). The paper also explores four regulatory issues created through mobile money: appropriate governance tools for trusts instruments, legal instruments civil law countries can use in the place of trusts, potential systemic risk that can arise through collapse of a major MM firm, and crisis management tools that can address such a collapse.

This paper draws upon mobile money contractual and regulatory material from fourteen countries. These are Kenya, Tanzania, Uganda, Rwanda, Nigeria, Bangladesh, India, Pakistan, Indonesia, Tonga, Samoa, Vanuatu, Papua New Guinea and Fiji.