Mobile money transfer services: The next phase in the evolution of person-to-person payments

Abstract

Money transfer schemes have evolved to the next generation of electronic payments — the mobile channel. Money transfer services for both domestic and international remittances are shifting from traditional providers to wireless carriers who are able to compete for consumer market share on the basis of technological ubiquity and lower-cost services. This paper reviews developments in mobile money transfers, the emerging ecosystem, and its participants and business models. It also examines the implications of payment systems roaming across geographic borders with their respective legal and regulatory jurisdictions, as well as the emergence of mobile airtime as an alternative currency. The risk environment for mobile money is examined in the context of both developed and emerging countries and in light of the participation of banks and non-bank telecom firms.