Fergie's Tech Blog

Mobile Payment Systems May Enable Terrorist Financial Transactions

Rachel Ehrenfeld and John Wood write for UPI Outside View:

Advanced mobile technology, cooperation between international mobile communications providers and international financial institutions and the lack of regulations make for a swift, cheap, mostly untraceable money transfer -- known as "m-payments" -- anywhere, anytime, by anyone with a mobile telephone.

Members of the GSM Association and MasterCard are developing an m-payment service to enable 200 million international migrant workers and the poor who lack bank accounts to transfer money domestically and internationally. According to the World Bank, 175 million migrants transferred at least $230 billion in international remittances in 2005. A recent U.N.-sponsored South African study found that m-banking can be up to one-third cheaper for customers than the current banking alternatives.

However, the spread of m-payments in less developed countries, which often lack functioning anti-money laundering and anti-terrorist financing regulatory frameworks, and where corruption is rife, will likely increase money laundering and terrorist financing.

posted by Fergie @ 5/01/2007 01:16:00 PM