![Page 1: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/1.jpg)
How We Can Protect Customers’ Funds in Mobile Money Systems
Jonathan Greenacre (Oxford University)
Professor Ross Buckley (UNSW)
Dr David Ramos Muñoz (Universidad Carlos III de Madrid)
Javier Solana (Oxford University)
World Summit on Information SocietyGeneva, 29 April 2015
![Page 2: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/2.jpg)
2
Outline of Presentation1. The issue: risks to customers’ funds and mechanisms to reduce them
2. Common law countries: we can use trusts to provide these mechanisms (theory and practice)
3. Civil law countries: we need to use other legal instruments to provide these mechanisms (theory)
4: Additional resources
5. Discussion of regulators’ challenges when protecting customers’ funds
![Page 3: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/3.jpg)
3
1. Risks to customers’ funds and mechanisms to reduce them
Customer
![Page 4: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/4.jpg)
4
1. Risks to customers’ funds and mechanisms to reduce them
ProviderCustomer
E-Money
Regular money
![Page 5: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/5.jpg)
5
1. Risks to customers’ funds and mechanisms to reduce them
ProviderCustomer
Risk and Mechanism
E-Money
Regular money
![Page 6: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/6.jpg)
6
1. Risks to customers’ funds and mechanisms to reduce them
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
![Page 7: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/7.jpg)
7
1. Risks to customers’ funds and mechanisms to reduce them
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
![Page 8: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/8.jpg)
8
1. Risks to customers’ funds and mechanisms to reduce them
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
![Page 9: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/9.jpg)
9
2. Common law countries: we can use trusts (theory and practice)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Common law countries
![Page 10: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/10.jpg)
10
2. Common law countries: we can use trusts (theory and practice)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Common law countries
Establish a trustEstablish a trust
![Page 11: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/11.jpg)
11
2. Common law countries: we can use trusts (theory and practice)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Common law countries
Establish a trustEstablish a trust
Trust deed operates as a ‘rule book’Trust deed operates as a ‘rule book’
![Page 12: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/12.jpg)
12
2. Common law countries: we can use trusts (theory and practice)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Common law countries
Establish a trustEstablish a trust
Trust deed operates as a ‘rule book’Trust deed operates as a ‘rule book’
An ‘active regulator’An ‘active regulator’
![Page 13: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/13.jpg)
13
3. Civil law law countries: we need to use other mechanisms (theory)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
![Page 14: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/14.jpg)
14
3. Civil law law countries: we need to use other mechanisms (theory)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Civil law countries
![Page 15: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/15.jpg)
15
3. Civil law law countries: we need to use other mechanisms (theory)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Civil law countries
FiduciaFiducia
![Page 16: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/16.jpg)
16
3. Civil law law countries: we need to use other mechanisms (theory)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Civil law countries
FiduciaFiducia
Mandate contractMandate contract
![Page 17: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/17.jpg)
17
3. Civil law law countries: we need to use other mechanisms (theory)
ProviderCustomer
Insolvency risk(eg pay
creditors)
Insolvency risk(eg pay
creditors)
Liquidity risk (eg Provider
builds a phone tower)
Liquidity risk (eg Provider
builds a phone tower)
Operational risk
(eg employee theft)
Operational risk
(eg employee theft)
Risk and Mechanism
E-Money
Regular money
Fund isolation
Fund isolation
Fund safeguarding
Fund safeguarding
Auditing and monitoring
Auditing and monitoring
Civil law countries
FiduciaFiducia
Mandate contractMandate contract
Direct regulation (legislation, insurance)
Direct regulation (legislation, insurance)
![Page 18: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/18.jpg)
Protecting Customers’ Funds Michael Tarazi and Paul Breloff, Nonbank E-Money Issuers: Regulatory Approaches to Protecting Consumer Funds (CGAP, 2010)Kate Lauer and Michael Tarazi, Supervising Nonbank Mobile Money Issuers (CGAP, 2012)
Common law countries Jonathan Greenacre and Ross Buckley, ‘Using Trusts to Protect Mobile Money Customers’ (Singapore Journal of legal Studies, 2014)Jonathan Greenacre and Ross Buckley, Trust Law Protections for E-Money (PFIP/AFI, 2013)
Civil law countries David Ramos, Javier Solana, Jonathan Greenacre, Ross Buckley, The Regulation of Mobile-Money in Civil Law Jurisdictions: Protection of Customers’ Funds (currently being drafted)
18
4. Additional Resources
![Page 19: How We Can Protect Customers’ Funds in Mobile Money Systems Jonathan Greenacre (Oxford University) Professor Ross Buckley (UNSW) Dr David Ramos Muñoz (Universidad](https://reader036.vdocuments.mx/reader036/viewer/2022062714/56649d345503460f94a0a370/html5/thumbnails/19.jpg)
Jonathan [email protected]
Ross [email protected]
David [email protected]
Javier [email protected]
19
5. Discussion: Challenges regulators face when trying to protect
customers’ funds