Protecting Mobile Money Customer Funds in Civil Law Jurisdictions
Global Economic Governance Programme Working Paper 2015/102
46 Pages Posted: 11 Jan 2016 Last revised: 25 Feb 2016
Date Written: December 21, 2015
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 law is 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 policy-makers in developing countries that provide a range of regulatory options that combine private law and regulation.
Keywords: finance, mobile phones, economic growth, regulation, funds protection, contracts, civil law jurisdictions
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