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Organized Crime Groups Expolit Africa’s Mobile Money Industry

A new INTERPOL report has found the billion dollar mobile money industry in Africa is being exploited by organized crime groups – a trend only set to increase as the service is rolled out across the continent.

The Mobile Money and Organized Crime in Africa report presents an overview of the criminal exploitation of mobile money services, including fraud, money laundering, extortion, human trafficking and people smuggling, the illegal wildlife trade and terrorism.

The African continent is the “world leader” in the mobile money industry, accounting for nearly half of all registered mobile money accounts globally.

The prominent role that mobile money plays in African societies and economies, and the rapid pace at which its infrastructure has been developed, has enabled criminals to “exploit weaknesses in regulations and identification systems” and commit mobile money-enabled crimes.

The report notes that mobile money itself has proven to be a positive force for financial inclusion and economic development in many African countries, and that a more cash-based informal economy can sometimes present even graver challenges to law enforcement.

However, a lack of robust identity checks to verify users combined with a need for greater law enforcement resources and training on mobile money-enabled crimes have created a financial system distinctly vulnerable to criminal infiltration.

Types of ID required to register for a mobile money account are not standardized across Africa and acceptable documents range from national identity cards to company IDs, tax certificates and driver’s licenses.

While such a broad spectrum of acceptable IDs benefit the growth of mobile money services, it also increases their vulnerability to fraud, money laundering and other crimes.

In parallel, despite progress in conviction rates for mobile money-enabled crimes, the technical expertise and equipment required to complete investigations can prove difficult to integrate into the court process.

With mobile money poised for even greater growth in Africa, unless the vulnerabilities are addressed, these services pose a significant threat to consumers and national security.

By 2025, smartphone user rates in Sub-Saharan Africa alone are projected to rise from roughly 39 per cent today to 66 per cent. Higher smartphone adoption, combined with a wider array of mobile money services on offer, will likely increase the number of transactions performed through smartphone apps.

“The evidence shows that criminals are already exploiting mobile money services in Africa. The anonymity that these services too often allow and the technical nature of the industry also present a challenge to law enforcement in investigating and prosecuting these crimes,” said Cyril Gout, INTERPOL Acting Director of Operational Support and Analysis. “This report emphasizes the need to act is now. By addressing the vulnerabilities highlighted by Project ENACT, we can ensure that the mobile money industry continues to grow throughout Africa without being compromised by those who seek to undermine it.”

Through Project ENACT, INTERPOL assists police in Africa to adopt proactive strategies to combat organized crime threats, facilitate information exchange and enhance investigative skills.

It is the first initiative of its kind to cover the entire African continent in analyzing the scale of organized crime and its impact on security, governance and development. This analysis serves to inform decision-makers and strengthen law enforcement cooperation at regional and continental levels.

Project ENACT is funded by the European Union and implemented by INTERPOL and the Institute for Security Studies, in partnership with the Global Initiative Against Transnational Organized Crime.

Download the full report at INTERPOL

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