Mobile Money: The Opportunity for India

This paper was submitted to the Reserve Bank of India (RBI) Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households to provide evidence of the benefits and the business case for mobile money for mobile network operators (MNOs). It states that banks in India face significant challenges in reaching unbanked and low-income populations and that in many markets, MNOs are already the entry point for customers to make payments and transfers, to store money safely, and to access other financial services that banks and other financial institutions like insurance companies offer. It therefore proposes a set of regulatory reforms that would clear the way for viable and sustainable mobile money deployments and would drive financial inclusion among other benefits. The paper also discusses the following key tenets of enabling mobile money regulation:

• Allowing a business model that safeguards customer money stored in the system and preserves financial stability;
• Proportional (risk-based) anti-money laundering and combating the financing of terrorism (AML/CFT) regulations and promoting tiered know-your-customer (KYC) procedures;
• Putting cost-effective regulatory solutions in place to set up and manage distribution networks and accelerate customer adoption.