Mobile Financial Services in Emerging Countries: Technology, Adoption, and Regulatory Issues

Mobile Financial Services in Emerging Countries: Technology, Adoption, and Regulatory Issues

Joseph Kwame Adjei (Ghana Institute of Management and Public Administration, Ghana) and Solomon Odei-Appiah (Ghana Institute of Management and Public Administration, Ghana)
DOI: 10.4018/978-1-5225-4029-8.ch006

Abstract

This chapter describes a recent World Bank report which indicated a sizable percentage of households in developing countries do not have access to formal accounts with financial institutions. The situation has created a major barrier in the quest for a world without poverty due to the exclusion of segments of society from the formal financial system. The phenomenon has resulted in the exclusion of many from traditional financial services, thus the use of other means to conduct informal financial transactions. In Ghana, many households rely on domestic informal forms of remittance to relatives and payments. Such informal mediums of remitting money to and from relatives in Ghana (e.g. via “Bus Driver”) received wide patronage irrespective of the associated risks until mobile financial services were introduced. This chapter discussed Mobile Financial Services (MFS) from the perspective of emerging economy and treats the following topics; technology, adoption and the regulatory issues in MFS.
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Mobile Financial Services Ecosystem

Tobbin (2010) made the observation that the ecosystem of mobile financial services comprises mobile network operators (MNOs), merchants and agents, financial institutions, mobile application and services, service vendors, consumers and regulators. The MNOs supply the core infrastructure and capabilities to the ecosystem. Such services include; core infrastructure, mobile device applications and distribution channel for the sale of prepaid credits and subscriptions (Tobbin, 2011). The MNOs’ ability to reach customers from all income levels and provide them with customer services including agents; earns them the qualification of being a major key player in the ecosystem (Jenkins, 2008). The nature of their involvement means MNOs must adopt strategies that restrain them from dominating the ecosystem.

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