Mobile money is a technology that allows people to receive, store and spend money using a mobile phone. It is sometimes referred to as a ‘mobile wallet’.

The interplay between the growing mobile phone usage, fast internet connections and Africa’s unbanked and underserved has led to a boom in mobile banking and mobile money services across the continent’s emerging markets. Mobile Money Services have become so important that the development of novel methods to enable individuals to access formal financial services and become
part of the formal financial system, is considered a key prerequisite for driving economic growth and financial inclusion.

The success of mobile money lies in the fact that it leverages the ubiquity of mobile phones and the extensive coverage of mobile operators. Mobile money upsets and complements traditional banking services.

Key Regulations and Regulatory Approaches

In July 2021, The Central Bank of Nigeria (“CBN”) published a Circular titled “Framework and Guidelines on Mobile Money Services in Nigeria” (“the Circular”) to govern the operation of mobile money services and specify the basic functionalities expected of any mobile payment service and solution in Nigeria.1 The Circular is divided into two: the Regulatory Framework for Mobile Money
Services in Nigeria (“the Framework”) and “the Guidelines for Mobile Money Services in Nigeria” (“the Guidelines”).

On the one hand, the Framework identified two models for the implementation of mobile money services, namely:

  • Bank Led Model: This involves a bank or a consortium of banks, whether or not in conjunction with other approved organisations, seeking to deliver banking services by leveraging on the mobile payment systems. The bank (or consortium of banks) shall be the lead initiator.
  • Non-Bank Led Model: This model involves a corporate entity that is licensed by the CBN to deliver mobile money services to customers.. The lead initiator shall be a corporate entity other than a deposit money bank, a national primary mortgage bank, a national microfinance bank or a subsidiary of a telecommunication company.

The objectives of the Framework include, among others, to provide an enabling environment for the adoption of mobile money services with a view to reducing cash dominance in the Nigerian economy; to ensure a structured and orderly development of mobile money services in Nigeria, with a clear definition of various participants; to specify the minimum technical and business requirements for these participants and promote the safety and effectiveness of mobile money services in Nigeria.