Two and a half billion people in the world live on less than $2 a day, and 90 percent have no access to savings accounts and other financial services. As a consequence, they tend to resort to risky, expensive, and inefficient ways to conclude financial transactions. Formal financial inclusion has a strong positive impact on development. Research suggests that poor households with access to formal financial services are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events.

With more than 80 percent of the world’s population now within mobile coverage, burgeoning efforts to enable people to send, receive, and store money using their mobile phones have the potential to greatly improve people’s lives and leapfrog more conventional banking models to safer, more affordable alternatives. Often called “mobile money,” these services reduce the risks and costs of financial transactions, help increase savings, and bring more people into the formal financial sector.

This timely publication investigates the current anti-money laundering/ combating the financing of terrorism (AML/CFT) regulatory environment for mobile money and provides guidance on the design of a framework for mobile money that adequately addresses ML/FT risks.