·

Mobile money a high risk for fraud in Africa

Mobile money leads to outsourcing development of key financial systems without looking at the inherent risks responsible for increased internal fraud cases, top mobile money service providers say.

Speaking at the East Africa Com conference held in Nairobi Tuesday, Hawas Garba Matta, Airtel Africa’s Group Revenue Assurance & Fraud Manager, said mobile money is taking money from experienced and well-paid economists and trusting it into the hands of inexperienced, low-paid techies and customer service assistants.

According to Matta, mobile money has also exposed customers to the dangers from fraudsters who have since come up with innovative ways of cheating them to access their money.

Recent cases has seen fraudsters spoofing SMS to appear as originating from the mobile providers, banks or other financial institutions to cheat mobile money subscribers of their funds. In July last year, statistics from Safaricom show that 65 percent phone-related fraud cases originate from prisons.

The possible solution to this, Matta says, is enforcing Know Your Customer (KYC) and Anti-money Laundering measures including taking down customer details including passport photos, copy of identification documents like National ID, passport, or driver’s license on registration to ensure easy tracking and identification of fraudsters in case reports are submitted.

Over 500 million mobile phone subscribers, according to the report Mobile Africa Report 2011, are estimated to be active in Africa with Safaricom boasting ofover 14.7 million active users actively using its mobile money platform, M-Pesa.

This translates to over 36.75 percent of Kenya’s population holding M-Pesa accounts — without considering mobile money users on the other networks. The funds transferred by M-Pesa are equal to 25 percent of the country’s GDP showing mobile money’s extensive growth hence requiring measure to curb the rising fraud cases.

With the African mobile banking market set to grow to $22 billion by 2015, as projected by Juniper Research, regulatory bodies, governments and service providers should equally step up their monitoring activities, as well as educating their customers on ways to avoid becoming defrauded.

East Africa Com hosted at Nairobi’s Safari Park Hotel on April 17 and 18. The forum brought together specialists in the area of mobile money were brought together in an open forum, and what came out is that, as much as mobile banking is good in the long run, it has opened channels where fraud cases are increasing at alarming rates.

Since the Introduction of mobile money transfer in Africa — particularly by Safaricom’s M-Pesa — Africa has witnessed a paradigm shift in methods of financial transactions.

Posted in: Uncategorized

Latest headlines

Latest by Category

Tweets about "humanipo"