Control of fraud on mobile money services in Ghana: an exploratory study
| Date | 07 May 2019 |
| DOI | https://doi.org/10.1108/JMLC-03-2018-0023 |
| Pages | 300-317 |
| Published date | 07 May 2019 |
| Author | Isaac Akomea-Frimpong,Charles Andoh,Agnes Akomea-Frimpong,Yvonne Dwomoh-Okudzeto |
Control of fraud on mobile money
services in Ghana: an
exploratory study
Isaac Akomea-Frimpong,Charles Andoh and
Agnes Akomea-Frimpong
Department of Finance, University of Ghana, Accre, Ghana, and
Yvonne Dwomoh-Okudzeto
Department of Economics and Law, University of Macerata, Macerata, Italy
Abstract
Purpose –Fraud is a globaleconomic menace which threatensthe survival of individuals,firms, industries
and economies,and the mobile money service is no exception.This paper aims to explore the main causesof
fraud in the mobilemoney services in Ghana andthe measures to combat the menaceby the key stakeholders
connected to the mobile money services. The paper is motivated by recent reports of numerous fraudulent
transactions on the mobile money platform, and the need to clamp down these nefarious transactions with
effectiveand practical measuresto sustain the service.
Design/methodology/approach –A thorough review of existing studies on fraud risk relating to
mobile money serviceswas done revealing a paucity of literature on the subject.Primary data were gathered
using an interview guideto explore the magnitude of the problem based on the views of employees of mobile
money operators, mobile money agents,banking supervisors from Bank of Ghana, employees of partnering
banks, employeesof National Communications Authorityand mobile money subscribers.
Findings –The study revealedthat fraud in mobile money servicesis caused by weak internal controls and
systems, lack of sophisticated informationtechnology tools to detect the menace, inadequate education and
training and the poor remunerationof employees. These factors disrupt the growth, and the smooth-running
of the services. To curb this menace,a detailed legal code and internal fraud policy should be developed and
used by mobile money operatorsand partner banks. Adequate training for mobile money agents shouldbe
encouraged coupled with publicawareness campaigns to educate stakeholders especially themobile money
subscriberson the tricks of the fraudsters.
Research limitations/implications –With the chosen research methodology and limitedsample size,
the findings may not reflect the views of all the stakeholders connected to the mobile money services.
Therefore, futurestudies on this subject are entreated to use researchmethods which embrace larger samples
to get more detailsabout this menace.
Practical implications –The study will assist in tackling the mobilemoney fraud to sustain the service
in the foreseeablefuture.
Originality/value –This paper contributes to scanty literature on fraud relating to the mobile money
servicesby drawinglessons from a middle-income country.
Keywords Control, Ghana, Service, Money, Mobile, Fraud, Services, Supervision
Paper type Research paper
1. Introduction
Mobile money servicehas become extremely popular in emerging marketsaround the world
(Chauhan, 2015;Osei-Assibey, 2015;Markovich and Snyder, 2017). In countries like India,
Uganda, Argentina, Tanzania, Zambia, Nigeria, Ghana and Kenya, where the number of
unbanked is very high, mobile moneyis the most convenient and easy-to-use alternative for
JMLC
22,2
300
Journalof Money Laundering
Control
Vol.22 No. 2, 2019
pp. 300-317
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-03-2018-0023
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
financial transactions, instead of traditional banks. In Kenya, 43 per cent of the country’s
gross domestic product flowed through M-Pesa (its mobile money platform) in 2013, 45
per cent in 2015 and 49 per cent in 2016(Deloitte, 2015;Markovich and Snyder, 2017).
In Ghana, the total cellular/mobile voice subscribers as at March 2015 stood at
31,154,420. Mobile Telecommunications Network (MTN) leads with a subscriber base of
14,207,778, representing 46 per cent, followed by Vodafone with a subscriber base of 7,159,566,
representing 23 per cent, and Tigo with a subscriber base of 4,315,719, representing 14 per cent
(National Communications Authority, 2015). Airtel, GLO and Expresso recorded 12, 5 and 1 per
cent market share, respectively. Four out of these operators are into mobile money transfer
service: MTN mobile money, Vodafone Cash, TIGO Cash and Airtel Money.
PricewaterhouseCoopers (2011) stated that over 80 per cent of the adult population in
Ghana do not have account in the recognized financialinstitutions. The number of Ghana’s
population keeps on increasing with increasing number of mobile phone users, but as the
figure quoted above indicates, manyGhanaians are not part of the formal banking systems.
The mobile money operations is seen as the channel through which many unbanked in
Ghana can join the formal bankingsystems (Akomea-Frimpong, 2017).
The mobile money service was first introduced in Ghana by the telecom companyMTN
in 2009, and it was followed by Tigo and Airtel in 2011, and today, all the mobile money
operators are involved in this service (Fintech Africa, 2017). The estimated value of the
mobile money transactions in 2014 was GHC11bnwith 2.3 million active users; it shot up to
GHC31 million in 2015 with 10.4 million active users, and as at July 2016, the estimated
value is GHC37.07bn, representing118 per cent growth over the previous year’sfigures with
active users of 17.2 million (Akomea-Frimpong, 2017). Airtel, MTN, TIGO and Vodafone are
the mobile phone operators that are driving this service in Ghana (Roberts, 2016). This
momentum looks set to continue, with the mobile money market estimated to be worth of
$129.29bn by 2021 all over the world (Deloitte,2015).
But the success story of this service has come with a threat to the operators because
unscrupulous persons continueto use the mobile money service as a conduit to scam others
(Chatain et al.,2011). The sustainability of the service is being threatened by these
fraudsters, who when left unchecked can bring abrupt end to the operations. In 2015, the
number of mobile money fraud cases stood at 53 per cent of the entire mobile money
transactions in Uganda, 42 per cent in Tanzania, 12 per cent in Kenya and 23 per cent in
Ghana (Busuulwa, 2016;Laryea, 2016), affirming that Ghana is a prime target for mobile
money scammers.
The relatively high mobilemoney fraud rates recorded are hard to trace, and devicesand
legislations availableon the mobile money operations are lax to apprehend the perpetrators.
This is a salient economic problem but a careful review of literature indicates that little on
fraudulent transactions on the mobile money services has been captured in the literature.
This can be attributed to inappropriate fraud indicators to detect, measure and prevent
the menace. Also, few research studies on the mobile moneyoperations have made mention
of the menace (Osei-Assibey, 2015;Mas and Radcliffe, 2011) with no or little mention of the
measures to combat the menace.
Some of the victims of mobile money scammerslost monies ranging from GHC200 ($45)
to GHC3,500 ($800)[1] per transaction. According to victims, the scammers call to inform
them that they mistakenly sentmoney into mobile money wallet and so they should resend
it back to them. This is later on determined as untrue and calculated scheme to steal their
money (Provencal, 2017). According to Ghana Chamber of Telecommunications, mobile
money services in Ghana such as MTN Mobile Money, Tigo Cash, Airtel Money and
Vodafone Cash have recorded 388 money fraud cases in 2016 as against 278 in 2015[2].
Control of
fraud
301
To continue reading
Request your trial