Interpol reported on 6th July 2020 that the billion-dollar mobile money industry in Africa has become the target of organized crime. The report shares statistics which suggest the trend is only set to increase as the service is rolled out across the continent.
Since its emergence in Africa in 2007, the mobile money business, with M-Pesa as its most prominent example, has grown faster in the continent than anywhere else in the world. The surge in smartphones has made the world of digital payments open to large parts of the population. Interpol notes in its latest report that mobile money is increasingly being used by criminals when completing transactions for a variety of illegal activities.
“The fast-growing sector has been linked to human trafficking, money laundering and the global drug trade, among other crimes.”
Interpol’s findings reveal a lack of consistency in suppliers’ rules, regulations and authentication during the account set-up. As a result, criminals find it easy to establish fake digital identities by exploiting “weaknesses in regulations and identification systems”.
Within Africa’s mobile payment network, it is believed that peer-to-peer transfers are the most common use of mobile payment services, accounting for 91.4% of the 21 billion total mobile payment transactions processed in 2019. Of these transactions, the report finds 120 million people received international remittances “worth USD 60 billion in 2015”, suggesting cross-border mobile money remittances are the fastest-growing segment. As Interpol report:
"This has resulted in transnational criminal syndicates exploiting mobile money services to enable low risk money laundering and purchases of illicit commodities with an international dimension, whilst benefitting from the anonymity offered by poorly applied regulatory standards."
Despite popular belief that criminal activity is easier to monitor through online transactions, Interpol clearly states that the activities are “further enabled by a lack of experience and resources in law enforcement.” This report is yet another testimony to the fact that criminals increasingly use digital and mobile money schemes to conduct their business. The correlation between cash and crime has been disproven long ago; today it is weaker than ever.
Criminals and criminal organizations will most probably continue to utilize mobile money services following the recent increase in their popularity and the prominent role such services now play in society across Africa. This prominent role in society has enabled criminals to exploit weaknesses in regulations and identification systems, further enabled by a lack of experience and resources in law enforcement. (Pg. 5)
Mobile money crime facilitating factors include: the weakness of individual identification systems; the lack of consumer awareness, the lack of resources and training of law enforcement concerning the collection and use of technical evidence in the criminal justice system. These factors have resulted in difficulties in prosecuting offenders and tackling established organized crime groups. (Pg. 6)