BIS paper on regulating mobile banking providers

A Bank for International Settlements paper published in May says regulation on mobile money services should promote experimentation and be tailored according to the particular type of mobile banking service offered.

Peter Dittus and Michael Klein, the paper's authors, conduct a case study of M-PESA, a mobile money service launched in Kenya in 2007, to analyse the transactions involved and regulation imposed on the service provider. Dittus and Klein note that despite the rapid expansion in mobile money ventures with 140 providers operating globally, the success and sustainability of most schemes remains uncertain.

The authors say that for the schemes to be successful, regulation should be designed according to the specific type of service they offer. They argue regulation that is calibrated to the type of service offered, and is tightened if and when such schemes become bigger, reduces with the potential impact of financial instability.

Click here to read the paper