It is praised as one the most successful stories on carrying out financial transactions. It has also emerged as an effective tool to fight poverty, transforming lives of thousands of Rwandans-mainly rural farmers who lack access to formal banking services.
The recent upgrade to the mobile commerce platform now enables subscribers to pay for their electricity and water bills as well as access their bank accounts using mobile phones.
The service is increasingly becoming popular in Rwanda. But it is also increasingly becoming exposed to fraud related risks. This is contrary to two years ago when money transfer was the only service on the platform.
The rising fraud rate mainly in mobile money transfer services is starting to worry subscribers, operators and the regulators of the platform.
Official figures show that MTN Rwanda, the country's largest telecom operator by market share, has handled transactions worth Rwf65 billion through its mobile money service since 2010. It has 470,000 subscribers registered on the MTN Mobile money service. TIGO, the second largest operator has 9127 subscribers on its TIGO Cash with 1,917 transactions daily.
Telecom regulator, Rwanda Utilities Regulatory Authority (RURA), says that mobile money fraud in the country has increased.
RURA says most people are losing their money to fraudsters, calling for strict measures to contain the situation, which would ruin mobile banking amidst the drive to transform the country into a cashless economy.
According to RURA, common fraud cases occur when a conman steals a pin number of a client and uses it to transfer money to their phones. The conman then throws away the card after getting the money. Others swap sim cards of the targeted client and use it to give instructions to banks to authorise payment of checks.
Others use swapped numbers to call friends of the culprit and ask them to send money on their mobile account.
"If another person or an agent gets to know your number they can connive with conmen to transfer your money, that's why am always worried," says Giovanni Higiro, a subscriber.
In a bid to tackle the problem, telecom operators warn subscribers not to reply anonymous messages instructing them (clients) to carry out transactions on their mobile money accounts or tricking them to have won money and need to pay a down payment to get their prize.
"Such SMS are aimed to cheat clients. We ask our clients not to reply any of the messages," said Norman Munyampundu, a Senior Manager for Customer Relations at MTN.
Albert Kinuma, MTN Rwanda's Head of Mobile Banking said; "Our mobile money is growing fast and we are trying to educate our customers to always keep their PIN numbers safely and stop revealing them, this will help to reduce on the current fraud cases."
Efforts to get a comment from TIGO were futile as Tongai Maramba, TIGO cash Manger refused to comment on the matter, saying that the parent company, MILLICOM, is listed on the stock exchange in Luxemburg and that TIGO is not independent enough to give out information without consent from the headquarters.
RURA hopes that its planned Subscriber Identification Module (SIM) Card registration project will make mobile commerce safer.
The project first came to the limelight in 2010. It also seeks to address other mobile phone crimes such as abusive calls and provocative messages which many mobile users have been subjected to.
But this project might take longer given the urgency of the problems at hand.
Accordingly, to effect the card registration process, there must be a law ensuring that all mobile users are compelled to register their SIM cards and also provide legal backing to operators against litigation in case they switch off floating numbers. This, therefore, will require the regulator to write a report that will be a basis for enacting the law.
According to RURA, this process has just begun.
"We are in the process of starting SIM card registration so that when a crime is done it is easier to know who has committed it. If you lose the card and is used by a criminal it will be easier to tell you are not the one who has committed it," Beata Mukangabo, Head of corporate, Legal and Industry Affairs Department at RURA said, adding that the regulator will soon start sensitising people to register their SIM cards.
Under SIM card registration, the subscriber will be asked to provide details on their identification cards which will be stored alongside the card details by the operator.
In case of a complaint, the SIM card is traced back using the stored information of the subscriber.