Advanced mobile technology, cooperation between international mobile communications providers and international financial institutions, and the lack of regulations make for a swift, cheap, mostly untraceable money transfer – known as “m-payments” – anywhere, anytime, by anyone with a mobile telephone.
However, the spread of m-payments in less developed countries, which often lack functioning anti-money laundering and anti-terrorist financing regulatory frameworks, and where corruption is rife, will likely increase money laundering and terrorist financing.
The abuse of the m-payments is easy when the stored value card is used. It does not require a bank account, credit card, or two forms of government-approved identification to activate and use. It just requires cash. Most cards set limits on the amount held on the card, but most can be reloaded, allowing the transfer of thousands of dollars. Indeed, this anonymous and mobile m-payment service is the best vehicle for criminals and terrorists for transferring or receiving money.
Here’s how m-payments can work: You buy a stored value card for a certain amount of dollars and a prepaid, disposable mobile phone. Next, you register with the m-payment service provider using a free anonymous e-mail account, your prepaid mobile-phone number, and the money on the stored value card. Using your mobile phone, you log on to the m-payment service provider and give the number of the mobile phone to which you wish to transfer the funds from your stored value card. The m-payment service provider sends a message to the receiver’s phone number asking where to transfer the money. The recipient can request the transfer to his stored value card and withdraw the funds from any ATM. Both sender and recipient can then throw away their mobile phones and use new phones and new stored value cards for another transfer, without any fear of detection.
Since both terrorism and m-payments are global, the m-payment service provider, as all those monitoring terror financing, should have immediate real-time access to an integrated, closely monitored list of all individuals, organizations, businesses, and countries suspected of links to terrorists.