Rasheda Sultana

Mobile Banking: Overview of Regulatory Framework in Emerging Markets

Posted by AnneryanHeatwole on Mar 12, 2010
Mobile Banking: Overview of Regulatory Framework in Emerging Markets data sheet 3905 Views
Rasheda Sultana
Publication Date: 
Dec 2009
Publication Type: 
Report/White paper

Across developing countries, millions of people rely on informal economic activity and local level networks to earn their living. Most of these populations are from bottom of pyramid and they don’t have access to basic financial services/banks as access to them is costly and very limited. However, the outstanding growth of mobile sector worldwide has created a unique opportunity to provide social and financial services over the mobile network. With over 4 billion mobile cellular subscriptions worldwide, mobile network has the ability to immediately offer mobile banking to 61% of the world population. A study states the biggest share of mobile payment users will be in the Asia/Pacific region by 2012 (Gartner, 2008). In the context of being the most promising ICT market and the largest inbound remittance receiver, this region is expected to be the hub of m-banking transactions. 

The paper starts with an overview of existing models of m-banking and then examines the m-banking regulations in some South Asian countries and of the countries where (e.g. the Philippines, Kenya, South Africa) m-baking/payment systems are already in practice or a success. The concerns of financial regulators and policy measures taken so far are discussed.

The key questions this paper aims to answer:

⇒ What are the practiced models of m-banking/payment systems? 

⇒ What concerns are generally raised by financial regulators?  

⇒ Which m-banking/payment models have drafted or enacted in South Asia?  

⇒ Which m-banking/payment models have are enacted in the countries where it is a success?

⇒ What constitutes a proportionate regulatory approach?  

The answers to the above questions helps to identify a way forward which can expedite adoption of m-banking/ payments service in South Asia successfully and quickly.