Using Trusts to Protect Mobile Money Customers

Some 1.8 billion people today have a mobile phone and no bank account. Mobile money is the provision of financial service through mobile phones. It offers the substantial potential benefits of financial inclusion to poor people in poor nations. This article explores how trust law can be used to address the key risks these mobile money customers face: bankruptcy of the e-money provider, illiquidity and fraud. Prudential regulation is largely inapplicable because most providers are telecommunications companies not banks. Trusts law is a highly efficacious way to address this regulatory lacuna.