Kalypton CEO Lars Davies quoted in Mondato report entitled Reg­u­la­tions in MFS: Con­straints or Neces­sary Protections

In a recent news­letter to its sub­scribers, Mond­ato, the lead­ing US-​based con­sultancy and advis­ory ser­vice in mobile fin­an­cial ser­vices (MFS) explored the ques­tion whether reg­u­la­tions were under­mining the poten­tial of mobile money solu­tions to accel­erate eco­nomic devel­op­ment in many countries.

With his extens­ive exper­i­ence of reg­u­la­tion of digital pay­ment solu­tions, Mr. Dav­ies argued that intel­li­gent reg­u­la­tion was all too neces­sary and that reg­u­lated entit­ies need to par­ti­cipate to unlock the full poten­tial of MFS as follows:

Accord­ing to Lars Dav­ies, e-​money reg­u­latory spe­cialist and CEO of e-​payment tech­no­logy pro­vider Kalypton, in a recent inter­view, “Oper­ating out­side of the formal fin­an­cial sys­tem, non-​bank act­ors are unable to offer a full range of fin­an­cial ser­vices, in con­trast to formal fin­an­cial insti­tu­tions.” While mobile operator-​led plat­forms can provide the “rails” to offer altern­ative fin­an­cial ser­vices, such as insur­ance or sav­ings products, reg­u­latory frame­works in many con­texts limit the extent that this can be accom­plished without part­nering with licensed banks.

Mr Dav­ies went on to argue that while the con­tri­bu­tion of MNOs needed to be acknow­ledged, part­ner­ships were the best way to unlock the full poten­tial of MFS while meet­ing those intel­li­gent reg­u­latory requirements:

Dav­ies of Kalypton agrees that MNOs have played a key role in kick start­ing the devel­op­ment of m-​money because they have the advant­age of extens­ive reach within rural and under­b­anked com­munities. How­ever, he notes that the poten­tial impact of m-​money has thus far been lim­ited, given MNO inab­ility to offer robust fin­an­cial ser­vices, sug­gesting that by work­ing together within a pruden­tial, bank-​led envir­on­ment, m-​money schemes would be able to achieve much more.

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