Exploring the Relationship Between Mobile Money Regulation and Usage

This paper provides new evidence on the relationship between mobile money regulation and usage. It combines data from the Mobile Money Regulatory Index, a comprehensive assessment of mobile money regulations, and the Global Findex Database 2017. The analysis covers almost 50,000 individuals across 46 countries and finds compelling evidence that an enabling regulatory framework is strongly associated with higher mobile money usage. There are a number of components within a regulatory framework that are linked to the use of mobile money, including: allowing non-banks to provide mobile money; permitting international money transfers; a comprehensive consumer protection framework; giving mobile money providers flexibility to appoint individual agents; not imposing strict limits, taxes or price controls on mobile money transactions; allowing non-banks to have direct access to retail payment settlement infrastructure, and; allowing providers to earn and utilise interest on mobile money trust accounts. The results also suggest that an enabling regulatory framework has a stronger association with mobile money usage amongst women compared to men, and amongst the poorest segments of a country’s population.