4 ms·

I suspect you can get away with things like these in Kenya because the state is weak and cannot enforce regulation in the banking sphere, i.e. demand banking li

by listic 17y ago

I suspect you can get away with things like these in Kenya because the state is weak and cannot enforce regulation in the banking sphere, i.e. demand banking licenses and proper accounting from phone companies. Allowing for easy money transfer between cell phones leaves less control for the state and opens up opportunities for financing illegal activities and money laundering. From egoistical or anarchistic point of view it would be cool, but one can clearly see why it isn't allowed in many other countries. In Russia banking system also sucks (though not so badly) and usage of banking services by the general population is low. So is quite widespread to pay small amounts, like for paid web services, with SMS, or to repay small personal debts by topping person's cell phone (prepaid system is prevalent). But phone to phone transfers are not allowed. And if you wish to receive payment for your online game via SMS, operators take commission of 30% to 50%. Is it that bad in other countries as well?

pelle 17y ago
Overly strict regulators are actually one of the main reasons that banks in developing countries can be such a PITA. Most of these countries in Africa with mobile payment providers have spent a lot of time with banking regulators getting these systems approved and they have received a lot of praise by people in the payment industry for doing so. You idea that easy money transfer allows less control for the state seems to me to be misplaced. This fear of the money laundering is a huge problem in the US and Europe and is stifling innovation. Most people in Africa work in the informal sector, so yes by OECD standards just sending money they illegally made selling Yam at the market back home would in theory be money laundering. However there is pretty good anecdotal evidence that M-Pesa in Kenya is really helping develop the economy from the bottom up.

by listic 17y ago

pelle 17y ago

Overly strict regulators are actually one of the main reasons that banks in developing countries can be such a PITA. Most of these countries in Africa with mobile payment providers have spent a lot of time with banking regulators getting these systems approved and they have received a lot of praise by people in the payment industry for doing so. You idea that easy money transfer allows less control for the state seems to me to be misplaced. This fear of the money laundering is a huge problem in the US and Europe and is stifling innovation. Most people in Africa work in the informal sector, so yes by OECD standards just sending money they illegally made selling Yam at the market back home would in theory be money laundering. However there is pretty good anecdotal evidence that M-Pesa in Kenya is really helping develop the economy from the bottom up.