PK Senyo, Senior Lecturer in Information Systems, University of Southampton.
Mobile Money – A technology that enables financial transactions mobile phone Without a bank account – driving Financial inclusion, Especially in developing countries. It gives more people the opportunity to use financial products and services.
In Ghana, there is a policy to encourage the use of mobile money and reduce cash flow. And mobile money has proved popular due to this The advantages. People can transfer or pay money, wherever they are, in a simple, fast, convenient and economical way. Mobile money has improved transaction efficiency and introduced some changes in traditional banking in the country. By 2017, Ghana was over 11 million Active Mobile Money Accounts.
But the incidence of mobile money fraud has increased in recent times. The figures The Cybercrime Unit of the Ghana Police Service showed more than 300 reported cases in 2019.
As a result, MTN, The The biggest Mobile Money Operator in Ghana, has introduced New policy . The customer needs a proof of identity (ID) before withdrawing cash. Valid forms of proof are a driving license, voter ID, passport, social security and National Insurance Trust ID, National Health Insurance Card or Ghana Card (National ID). All mobile money agents must select the ID type and enter the ID card number submitted by the customer before completing the transaction.
There are two problems with this: it excludes people from financial services and it encourages the use of cash. There are better ways to address fraud.
According to the National Identification Authority of Ghana, only about 15.5 million Out of a population of 30 million, it has been registered with a formal ID. The new policy potentially excludes these individuals from using mobile money.
The research It shows that people without formal ID are poor, living in remote villages, where mobile money is their access to financial services. They rely on mobile money agents for remittances.
In Ghana, mobile money is being made Favorite channel For financial transactions and this new policy means that people need to carry IDs every time. It is difficult Receiving and Changing IDs In Ghana due to bureaucratic procedures. This policy may therefore create inconvenience, which may discourage customers from using mobile money.
I’ve done The research What affects the behavior related to financial technologies. One of my findings is that people are more open to using mobile money when they expect the effort to do so to be smaller. On this basis, I believe that they will not use mobile money if there are constraints like providing IDs consistently. Facing this effort, they can return to the use of cash – thereby increasing Ghana’s financial inclusion progress. This new rule has good intentions about presenting IDs, but can cause unwanted effects.
The new policy also encourages mobile money to be converted into cash, which works against the government’s agenda of discouraging cash. The government encourages electronic payments to widen the tax net and fight corruption and robbery. Mobile money policies should support this agenda rather than underestimate it.
Providing ID before withdrawal will not solve mobile money fraud. Fraudsters can easily use fake IDs for transactions Limited integration Of all national databases. Also, IDs are not properly linked to residential addresses in Ghana, so it would be difficult to detect criminals even when mobile money fraud is detected.
Rather, the focus should be on the use of emerging technologies. Artificial Intelligence and Machine Learning To develop algorithms that can automatically detect, flag, and temporarily prevent potential fraud for further investigation.
Similarly, there is an option for two-factor authentication. This allows people to use an authentication application or text message to validate the transaction before it is authorized. This gives people another level of protection besides personal identification numbers to fight fraud.
Another measure available to fight fraud is to abolish inter-mobile money transfer fees. This will encourage e-funds to remain in circulation, making it easier to detect fraudulent funds and uncover fraud networks. Fraudulent funds are not withdrawn.
Ghana also has a Universal QR Code Payment technology to encourage cashless transactions. Need to work with MTN Ghana Interbank Payment and Settlement System, Merchants, petty traders, drivers and others to roll out technology across the country. This will enable more people to use mobile money to pay for daily activities.
Finally, more can be done to improve people’s awareness of how mobile money fraud works and can be prevented. And criminals should be acted upon.
Using this policy of “No ID, No Cashout” will only derail the financial inclusion benefits and the cashless agenda of Ghana. Mobile money operators should use advanced technologies to advance fraudulent transactions rather than relying on manual interventions.
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