The question of consumer protection is a very important topic to consider in the new mobile money world. Consumers in this case are often not well educated, have a big percentage of their assets at risks and do not always know how to escalate problems to resolution. Most regulators are seeing this as one of their key objectives to ensure that consumers are protected.The recently published CGAP article (Read here), lists seven risks that should be considered when regulations are established, these are:Protecting client funds held as electronically stored value.Ensuring safety and reliability of services.Reducing opportunities for agent fraud and other harmful conduct.Ensuring clear and effective disclosure.Protecting clients’ personal information.Ensuring clients have knowledge of and access to effective redress and complaint procedures.Keeping providers liable for agents’ compliance with regulation.The article goes into some mitigation strategies for each of these seven deadly sins -describing procedures, oversight and training approaches. In reading this structured analysis of the problem, it became clear to me that tackling mobile money without a bank is folly. Holding funds in trust and utilising other mechanisms are just fraught with risks. That is why more and more regulators (and rightly so) insists on banks holding the funds and being the final port of call for disputes.

Read more: http://mbanking.blogspot.com/2011/01/consumer-protection-implications-for.html