IDEAS home Printed from https://ideas.repec.org/p/net/wpaper/1716.html
   My bibliography  Save this paper

Fraud on Mobile Financial Markets: Evidence from A Pilot Audit Study

Author

Listed:
  • Francis Annan

    (Columbia University, School of International and Public Affairs, 420 West 118th Street, New York, NY 10027, USA)

Abstract

Potential fraud can limit the promise of innovative mobile financial markets like Mobile Money, yet little is known about its existence, especially among the poor. In a randomized control trial across 6 low-income communities in Ghana, I evaluate the extent of fraud—overcharged transactions—on Mobile Money and explore the mechanisms underlying the results. Trained auditors visited vendor points, seeking to make actual Mobile Money transactions: either send or receive cash. Approximately 22% of transactions go fraudulent. Additional experiments indicate that fraud is higher for large amount transactions. Consumers who are financially sophisticated are less likely to suffer fraud, but market competition appears to have no effect on this.

Suggested Citation

  • Francis Annan, 2017. "Fraud on Mobile Financial Markets: Evidence from A Pilot Audit Study," Working Papers 17-16, NET Institute.
    • Handle: RePEc:net:wpaper:1716
    as

    Download full text from publisher

    File URL: http://www.netinst.org/Annan_17-16.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Demirgüç-Kunt, A. & Beck, T.H.L. & Honohan, P., 2008. "Finance for all? : Policies and pitfalls in expanding access," Other publications TiSEM aec73d3a-d6eb-457f-9182-3, Tilburg University, School of Economics and Management.
    2. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    3. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    4. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe & Van Oudheusden,Peter, 2015. "The Global Findex Database 2014 : measuring financial inclusion around the world," Policy Research Working Paper Series 7255, The World Bank.
    5. Sendhil Mullainathan & Markus Noeth & Antoinette Schoar, 2012. "The Market for Financial Advice: An Audit Study," NBER Working Papers 17929, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lay, Sok Heng, 2018. "Mobile Phones and Financial Access: Evidence from the Finscope Surveys of Selected Asian Countries," MPRA Paper 87216, University Library of Munich, Germany, revised 30 May 2018.
    2. N'dri, Lasme Mathieu & Kakinaka, Makoto, 2020. "Financial inclusion, mobile money, and individual welfare: The case of Burkina Faso," Telecommunications Policy, Elsevier, vol. 44(3).
    3. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," World Development, Elsevier, vol. 111(C), pages 84-96.
    4. Joshua Blumenstock & Michael Callen & Tarek Ghani, 2018. "Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan," American Economic Review, American Economic Association, vol. 108(10), pages 2868-2901, October.
    5. Abidin Alhassan & Leon Li & Krishna Reddy & Geeta Duppati, 2021. "The relationship between political instability and financial inclusion: Evidence from Middle East and North Africa," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 353-374, January.
    6. Utz Weitzel & Michael Kirchler, 2022. "The Banker's Oath And Financial Advice," Working Papers 2022-13, Faculty of Economics and Statistics, Universität Innsbruck.
    7. S M Rakibul ANWAR & Tanzina Tabassum TANZO & Riduanul MOSTAFA, 2017. "Financial Inclusion- A Comparative Study On South Asia," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 7(4), pages 18-33, December.
    8. Emmanuel Kwablah Apiors & Aya Suzuki, 2018. "Mobile Money, Individuals’ Payments, Remittances, and Investments: Evidence from the Ashanti Region, Ghana," Sustainability, MDPI, vol. 10(5), pages 1-26, May.
    9. Weitzel, Utz & Kirchler, Michael, 2023. "The Banker’s oath and financial advice," Journal of Banking & Finance, Elsevier, vol. 148(C).
    10. Helmut Bester & Matthias Dahm, 2018. "Credence Goods, Costly Diagnosis and Subjective Evaluation," Economic Journal, Royal Economic Society, vol. 128(611), pages 1367-1394, June.
    11. Cull, Robert & Gine, Xavier & Harten, Sven & Heitmann, Soren & Rusu, Anca Bogdana, 2018. "Agent banking in a highly under-developed financial sector: Evidence from Democratic Republic of Congo," World Development, Elsevier, vol. 107(C), pages 54-74.
    12. Callen, Michael & Blumenstock, Joshua & Ghani, Tarek, 2016. "Mobile-izing Savings with Automatic Contributions: Experimental Evidence on Present Bias and Default Effects in Afghanistan," CEPR Discussion Papers 11400, C.E.P.R. Discussion Papers.
    13. Ghosh, Saibal, 2016. "Does mobile telephony spur growth? Evidence from Indian states," Telecommunications Policy, Elsevier, vol. 40(10), pages 1020-1031.
    14. Balafoutas, Loukas & Kerschbamer, Rudolf, 2020. "Credence goods in the literature: What the past fifteen years have taught us about fraud, incentives, and the role of institutions," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    15. Somville, Vincent & Vandewalle, Lore, 2023. "Access to banking, savings and consumption smoothing in rural India," Journal of Public Economics, Elsevier, vol. 223(C).
    16. Beck, Thorsten & Pamuk, Haki & Ramrattan, Ravindra & Uras, Burak R., 2018. "Payment instruments, finance and development," Journal of Development Economics, Elsevier, vol. 133(C), pages 162-186.
    17. Utz Weitzel & Michael Kirchler, 2021. "The Banker's Oath And Financial Advice," Tinbergen Institute Discussion Papers 21-032/IV, Tinbergen Institute.
    18. Hamidou Jawara, 2020. "Access to savings and household welfare evidence from a household survey in The Gambia," African Development Review, African Development Bank, vol. 32(2), pages 138-149, June.
    19. Serge Ky & Clovis Rugemintwari & Alain Sauviat, 2019. "Friends or foes? Mobile money interaction with formal and informal finance," Working Papers hal-02000982, HAL.
    20. Apeti, Ablam Estel, 2023. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," World Development, Elsevier, vol. 161(C).

    More about this item

    Keywords

    mobile money; financial fraud; audit study;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:net:wpaper:1716. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nicholas Economides (email available below). General contact details of provider: http://www.NETinst.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.