Protecting mobile money customer funds in civil law jurisdictions Articles uri icon

publication date

  • June 2016

start page

  • 705

end page

  • 739

issue

  • 3

volume

  • 65

international standard serial number (ISSN)

  • 0020-5893

electronic international standard serial number (EISSN)

  • 1471-6895

abstract

  • The provision of financial services through mobile phones is a powerful tool to foster financial inclusion, and thus economic growth, in developing countries. However, it raises important regulatory issues. Given the vulnerability of most potential customers of these services, the protection of customer funds is important. In common law countries, trust accounts are an effective response to these concerns. In civil law jurisdictions however, in the absence of trusts, protection of customer funds is more difficult. This paper identifies the theoretical and practical problems that regulators in civil law jurisdictions might face when trying to protect customer funds and explores how fiduciary contracts, mandate contracts and direct regulation might be used to achieve this goal. It offers a series of practical recommendations for policymakers in developing countries that provide a range of regulatory options that combine private law and regulation.

keywords

  • Digital financial services
    fiduciary
    funds protection
    mandate
    mobile money
    trusts
    limits