International Monetary Fund: Is mobile money a part of money?

In recent years, the rapid popularization of mobile money has spawned new data demands, and the impact of mobile money on broad money has also attracted more and more attention. A working paper published by the IMF “Is Mobile Money Part of Money?” “Understanding its development trends and statistical processing” aims to solicit more views on the development prospects of mobile money and its statistical processing.

In recent years, the rapid popularity of mobile money has spawned new data needs, and the impact of mobile money on broad money has attracted more and more attention. This article uses the mobile money data of the Financial Access Survey (FAS) to summarize the development of mobile money, and examines the statistical treatment of mobile money under the framework of the IMF’s Monetary and Financial Statistics (MFS). In most cases, monetary and financial statistics guidelines are accurate because many jurisdictions have adopted regulations that ensure that mobile money is available in the banking system, and then in the calculation of broad money. However, if mobile network operators (MNOs) act as special financial intermediaries outside the scope of banking supervision and are allowed to invest their client funds in sovereign securities and other licensed assets, mobile currency liabilities may still remain in the banking system and monetary statistics Outside. In this case, information on mobile money liabilities needs to be collected directly from mobile money operators in order to account for mobile money as part of broad money.


The rapid development of economic digitization in the financial sector is changing the way people obtain and use financial services, and new digital financial products and platforms are rapidly emerging. These changes have prompted analysts, policymakers, and statisticians to seek new data sources and explore various methods to systematically classify, measure, and record financial technology-related activities in order to assess their trends to help further policy analysis (Cornelli Et al., 2020; Adrian and Mancini-Griffoli, 2019; Claessens et al., 2018).

Mobile money is an early leader in this type of financial technology innovation. It is a financial service that uses a mobile money account, usually provided by a mobile network operator (MNO) or other entity companies that cooperate with the MNO. Different from mobile banking, mobile banking uses applications on mobile devices to perform banking services. Using mobile money services does not require a bank account, just a mobile phone.

Mobile money has had a profound impact on the financial sector of low- and middle-income economies, providing safe and convenient financial transactions for people without bank accounts, and promoting financial inclusion (IMF, 2019a; Espinosa-Vega et al. , 2020). Although Africa is often considered the center of mobile money, in other parts of the world, including Asia and Latin America, the use of mobile money has also grown substantially. As of 2019, more than 1 billion mobile money accounts have been registered, and nearly 2 billion U.S. dollars of transactions occur through these accounts every day (GSMA, 2020a).

The rapid popularization of mobile money has created a new demand for data, which comes from tracking the development trend of mobile money to meet the needs of policy making. Cross-country comparable data on mobile currencies can be useful information for decision makers to formulate and design targeted financial inclusion policies, as well as to evaluate and measure their impact in a broader macroeconomic context. The spread of new crown pneumonia has created greater demand for mobile money, because it is possible to promote financial transactions with minimal physical contact to support economic activities (Bazarbash et al., 2020).

The increasing popularity of mobile money also raises the following questions: whether and how mobile money is considered part of the economy’s currency, and what data may be needed to ensure that mobile money is correctly obtained when calculating the total currency of broad money and other currencies. These questions are crucial for understanding the basic data used for empirical and policy analysis, especially considering that monetary aggregates are one of the key variables for policy makers to monitor the macro economy. Clarifying the handling of mobile money in monetary statistics, especially using the IMF’s Monetary and Financial Statistics Manual and Compilation Guide (MFSMCG) as a methodological framework, can provide useful insights in this regard.

In this context, this article analyzes the latest developments in mobile money, including its usage trends, business models and regulatory requirements. Then, from a statistical point of view, the impact of these developments on the measurement of broad money and other monetary aggregates is studied. In this process, it is conducive to enriching the relevant literature on the measurement of digitization in macroeconomic statistics.

In some countries, the scope of mobile money services has also begun to expand, including new services and services that need to be optimized, such as credit and interest-bearing savings. Analysis of transaction-level data on Kenya’s mobile money accounts confirms this trend and reveals the degree of penetration of these new services among mobile money users.

The method guidance provided by the Monetary Fund Management Committee on the handling of mobile money is that relatively clear mobile money liabilities, that is, the outstanding balances in mobile money accounts, need to be included in monetary statistics as part of broad money. However, in practice, how mobile money affects the measurement of the total amount of money depends on the business model and/or regulatory framework of mobile money. In most cases, the application of this guide is very simple, because many jurisdictions have adopted regulations to ensure that mobile money is included in the calculation of currency aggregates. However, in some cases, such as when regulations allow mobile currency liabilities to be invested in sovereign securities or other licensed assets, more steps and additional data collection are required to make the mobile currency part of the compilation of currency statistics. instruction. In this case, the compiler of currency statistics needs to review most of the country’s situation and make necessary adjustments when calculating broad money.

The rest of the paper is as follows:

The second section summarizes the latest trends in the acquisition, adoption and use of mobile money using the FAS database, which contains annual data on mobile money at the national level.

The third section examines the business model of mobile money and the key to mobile money supervision-understanding the important factors of handling mobile money in macroeconomic statistics and its impact on money measurement.

The fourth section discusses the MFSMCG framework’s instructions on how to record mobile money, and clarifies its impact on currency calculations under different business models and regulatory arrangements.

The fifth section draws a conclusion.

Typical facts of mobile money

Mobile money has become the first choice for obtaining financial services, especially in countries with low bank penetration and imperfect infrastructure. It has played an important role in improving financial inclusion. Mobile money is characterized by its easy availability. This section starts with the definition of mobile money, and outlines the global mobile money access, use and development trends.

What is mobile money

Mobile money is a mobile payment service, usually provided by MNOs or other real economies that cooperate with MNOs using mobile money accounts. In order to obtain permission to use mobile money, customers usually need to register with a mobile money service provider’s mobile money agent (usually a small local retail store) and obtain a personal virtual account associated with their mobile phone number, which can be accessed through a SIM card . No bank account is required to use these services-these services can be accessed only through a basic mobile phone. Mobile money customers can deposit funds into a mobile money account by handing cash to a mobile money agent. At the same time, they can receive the same amount of “mobile money” through their mobile phones. They can use this electronically stored mobile currency to pay bills, transfer money to peers, etc.

Mobile money development trend

The analysis in this section uses mobile currency data from the FAS of the International Monetary Fund. The system is a unique supplier database that contains annual country-level data on three key aspects of mobile currency—acquisition, adoption, and use. FAS mobile currency data provides a transnational perspective on mobile currency trends and developments. Specifically, the data points to the following three topics on acquisition, adoption, and use:

First, in some low- and middle-income countries, mobile money is currently more accessible than traditional banking services. Mobile money is a service brought to customers by a mobile money agent network, and banks in developing economies usually rely on physical branches and ATMs. In the past ten years or so, banks have also provided “correspondent banking services” to expand the scope of banking services. Despite such innovations by banks, in many low- and middle-income countries, the number of mobile money agents is still higher than the combined number of ATMs, commercial bank branches, and non-branch retail agents (Figure 1).

International Monetary Fund: Is mobile money a part of money?

Figure 1 Comparison of different channels used to obtain financial services in different economies

Second, there is no doubt that mobile money has become a popular way to obtain financial services, because in some low- and middle-income countries, registered mobile money accounts exceed bank accounts (Figure 2). This trend is more pronounced in low-income countries. In middle-income countries, mobile money seems to complement the traditional financial services provided by commercial banks.

International Monetary Fund: Is mobile money a part of money?

Figure 2 Comparison of the registration volume of mobile money accounts and commercial bank accounts in different economies

Third, the use of mobile money measured by transaction value and transaction volume has increased significantly over time. This trend is especially prominent among early mobile money users. Consistent with the ever-increasing access and use indicators, the FAS mobile money use indicator shows that many economies have grown rapidly over the past decade (Figure 3).

International Monetary Fund: Is mobile money a part of money?

Figure 3 Changes in mobile currency transaction volume and transaction value

FAS data also shows that mobile money users have begun to maintain high balances in their mobile money accounts. The outstanding balance of an active mobile money account can be considered similar to a bank deposit—amount that has been converted from cash to mobile money but has not yet been used to transfer money or pay bills. Figure 4 shows the outstanding balance of active mobile money accounts as a percentage of GDP. The outstanding balance has risen over time, which indicates that mobile money accounts may be used more and more as a way of storing money, rather than just as a payment platform.

As the development of mobile money matures, mobile money providers can provide new and optimized services including credit and insurance on a larger scale by cooperating with traditional financial service providers such as insurance companies, banks and microfinance institutions. (GSMA, 2018). This trend has been reflected in some early mobile money users such as Kenya and Tanzania, where mobile money account holders can apply for loans or small loans through their mobile money service providers.

Mobile currency ecosystem

To study the problem of mobile money measurement, it is very important to understand the mobile money ecosystem, including its business model and regulatory environment-the key factors that determine how mobile money is handled in monetary statistics.

A distinctive feature of mobile money is that non-financial institutions such as telecommunications companies provide basic financial services to customers. Most of these customers are excluded from traditional financial services or underserved. However, in some countries, banks have begun to cooperate with third parties such as mobile network operators to provide financial services to people without bank accounts through mobile devices. This has led to the development of mobile money services under the “bank-led model”.

Although both MNO-led and bank-led mobile money services provide similar user experiences, the service delivery mechanisms under these two modes are somewhat different in structure. In addition, these two models may be subject to different regulations, which is of great significance for how to deal with mobile money when calculating the total amount of money.

Mobile money and currency total

Based on the data collected in the MFSMCG framework and SRFs, this section examines the statistical processing of mobile money in currency statistics and how mobile money affects currency measurement.

Handling of mobile money in currency statistics

According to MFSMCG, currency has the following attributes: medium of exchange, unit of account, and store of value. The most common and widely used measure of total currency is “broad money.” MFSMCG describes broad money as the sum of all liquid financial instruments held by households, businesses, etc., which are widely accepted as a medium of exchange in the economy. Currency in circulation and transferable deposits-the most liquid financial instruments-meet the definition of broad money. Non-transferable deposits, such as savings deposits, spot deposits, and short-term maturity time deposits are also included in broad money. It can be summarized as that broad money includes the current liabilities of the central bank and the banking system to other sectors (except the central government).

A key question in this article is whether mobile money is part of broad money. The handling of mobile money in currency statistics is handled under the broad category of electronic money. Examples of electronic money include prepaid cards, mobile wallets or web-based electronic money, and mobile money. In small financial services companies, electronic money is classified as deposits rather than currency. Since electronic money, including mobile money, can be used to pay directly to third parties, it can be regarded as a transferable deposit. Since transferable deposits are usually included in broad money, mobile money is included in broad money.

Although the guide clearly states that mobile money liabilities can be regarded as transferable deposits and included in broad money, this may not be a way to collect mobile money data for the purpose of monetary statistics. The processing of mobile money in the currency data compilation depends on the mobile money business model and/or regulatory framework adopted by the country. Please refer to the original text for details.

The impact of mobile money on the composition of broad money

Generally speaking, mobile money may change the composition of broad money, but it will not affect its overall scale or quantity. As the use of mobile money becomes more widespread, the currency in circulation may decrease, while deposits in the banking system will increase. In most cases, the mobile money service provider’s mobile money balance will be used as bank transferable deposits Part of it is included in currency statistics.

However, in most countries, the mobile money balance is still very small compared to its transferable deposits and currency scale. This trend is very prominent in all countries. But as mobile money becomes more and more popular, its influence on the calculation of the total amount of money will become more obvious. Therefore, the statistical editor must ensure that mobile money is taken into account when calculating the total amount of money. In this regard, it is necessary to distinguish between customer fund deposits in banks (from mobile money) and other types of bank deposits included in broad money in the future. More generally, in view of the impact of mobile money on various policy aspects, from its impact on financial inclusion to the total amount of money, it is very important to continue to monitor the trend and development of mobile money.

in conclusion

This article analyzes the latest development of mobile money from a statistical perspective, and examines its measurement and data collection issues. Specifically, this article uses the available data to examine typical facts about mobile money, and draws on the method framework provided by MFSCG to clarify the handling of mobile money in currency statistics.

FAS data provides an effective way of how mobile money can help people with no or insufficient bank accounts in developing economies access financial services. Data shows that compared with traditional banking, mobile money is more financially available, because in these economies, there are more mobile money agents than ATMs and bank branches combined. This accessibility can also be seen in the number of mobile money accounts-in many low- and middle-income economies, there are more mobile money accounts registered than traditional bank accounts. There is a similar trend in the use of mobile money, as evidenced by the increase in transaction volume and transaction volume.

Regarding the measurement issues related to mobile money, this article clarifies the handling of mobile money in monetary statistics and its influence on the calculation of the total amount of money, and answers the question of whether mobile money is counted as part of broad money. Answering this question requires understanding the mobile currency value chain, the business model behind it, and the laws and regulations that protect customer funds. The mobile money business model can be MNO-led or bank-led, depending on the type of entity responsible for issuing mobile money. The type of business model determines the regulations to be applied, and these regulations directly affect the handling of mobile money in currency statistics.

MFSMCG’s method of handling mobile money clearly states that mobile money liabilities need to be included in monetary statistics as part of broad money. However, the measurement of how mobile money affects the total amount of money depends on the mobile money business model and/or regulatory framework. For the mobile network operator-led model, as long as the regulation requires mobile currency liabilities to be deposited in a regulated financial institution in the form of deposits, the mobile currency will be reflected in the broad currency. If regulations allow mobile currency liabilities to be invested in sovereign securities or other permitted assets, more relevant steps may need to be taken, including collecting more information from mobile network operators. For the bank-led model, since mobile currency balances are recorded as part of the bank’s balance sheet, they are directly used to calculate broad money.

Although this article focuses on mobile money, there are data requirements and potential measurement issues for other fintech products and services that have not yet been fully explored. Recently, policymakers have also paid more and more attention to the potential digital forms of currencies, such as stable currencies and central bank digital currencies. Understanding the statistical processing of these products in currency statistics is essential to monitor their development and support policy analysis, and is an important subject that requires further research.

Author | Kazuko Shirono, Bidisha Das, Yingjie Fan, Esha Chhabra and Hector Carcel Villanova


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