M-Pesa, Wave, MTN MoMo, and their peers have supercharged financial inclusion across Africa, while quietly creating a new generation of typologies that some banking partners abroad are dangerously slow to recognise.
In 2025, Africa’s mobile money ecosystem processed an estimated $1.4 trillion [i]in transaction value, representing roughly two-thirds of global mobile money flows. At the same time, the continent receives in excess of $56 billion[ii] annually in cross-border remittances, according to World Bank aligned datasets. These are not footnotes; they represent a fundamental shift in how value moves across the continent and, by extension, how illicit value can move too.
For some regulated firms, banks, EMIs, payment institutions, and wealth managers with African client exposure, the compliance frameworks built around correspondent banking and traditional wire transfers are showing their age. The typologies have evolved. The controls largely have not.
Why Mobile Money Changes the AML Equation
Traditional AML frameworks were built around friction. Controls such as KYC at onboarding, transaction monitoring on named accounts, and SARs linked to identifiable individuals were designed to introduce friction. The underlying assumption is that friction, whether through delays, documentation, or intermediaries, naturally constrains illicit finance while improving traceability.
These models also rest on several structural assumptions: reliable identity infrastructure, institutional visibility over transactions, predictable velocity of payments, clearly defined jurisdictional boundaries, and cash as the dominant risk vector.
Mobile money systems challenge many of these foundations simultaneously.
In markets across East and West Africa, mobile money operates at scale, speed, and ubiquity, often within environments where formal identity systems remain uneven. Wallets can be created through SIM registration processes with varying degrees of verification rigour. Funds can be split, pooled, and recombined within seconds. Critically, large agent networks, which act as the operational backbone of mobile money ecosystems, introduce a distributed human infrastructure that is difficult to monitor from a cross-border compliance perspective.
The result is a payment environment where traditional “friction-based” AML assumptions no longer map cleanly onto how value actually moves.
Some Emerging Typologies in Mobile Money Ecosystems
Several typologies are increasingly observed across mobile money-driven financial flows:
Smurfing via Agent Networks
While structuring is not new, mobile money agent networks provide a highly scalable mechanism for dispersing and reaggregating funds. Small value deposits can be distributed across multiple wallets and later consolidated into larger outbound transfers. For receiving institutions abroad, particularly payment aggregators, what is visible is often only the final consolidated layer, not the underlying fragmentation that produced it.
SIM Swap Fraud & Identity Layering
Compromised or fraudulently reissued SIM cards continue to be reported in high mobile money penetration jurisdictions across West and East African corridors. These compromised identities are then used to route funds through mobile wallets that may appear legitimate at the point of transaction. By the time these flows reach foreign accounts, the beneficial ownership trail is often significantly degraded or effectively opaque.
Cross Platform Cycling
Funds increasingly move fluidly between mobile money wallets, bank accounts, and crypto on and off ramps within very short timeframes. Each transition introduces a jurisdictional or institutional reset, fragmenting the audit trail. In such structures, the final receiving bank, often in a regulated market such as the UK, may see funds that appear clean in isolation, even where upstream layering activity may have occurred.
Airtime & Value Conversion Abuse
In several markets, conversion between cash and airtime credit remains an underrecognized layering channel. Low thresholds, fragmented oversight, and limited interoperability between operators can allow value to be disguised as legitimate telecommunications or merchant activity, obscuring its original source.
The Risk of De Risking
In response to these complexities, some institutions have adopted de-risking strategies, reducing or exiting exposure to payment firms operating in higher risk corridors.
A more effective approach is not withdrawal but understanding the risks.
High risk exposure does not automatically necessitate disengagement. It requires proportionate, risk-based frameworks that are capable of identifying, assessing, and mitigating the specific risks presented by the underlying payment ecosystem.
The Regulatory Direction of Travel
Regulatory expectations are moving in a clear direction.
The FCA’s supervisory communications, including its Dear CEO letters and ongoing thematic reviews, continue to emphasise the importance of robust systems and controls that are proportionate to evolving risk exposure, including within payments and fintech sectors.
At the international level, FATF’s work on virtual assets has a clear conceptual overlap with mobile money systems, particularly in relation to value transfer mechanisms, intermediary risk, and traceability challenges.
For UK regulated firms with exposure to African payment corridors, meaningful improvement requires a shift in mindset and methodology:
From Jurisdictional to Typological Risk Assessment
Country risk ratings alone are no longer sufficient. Firms need a granular understanding of how specific mobile money ecosystems operate within those jurisdictions.
Smarter Transaction Monitoring Design
Traditional rulesets are often poorly calibrated for mobile money dynamics. Effective monitoring must account for high frequency, low value aggregation, unusual routing patterns, and intermediary reliance on mobile money operators and agents.
Enhanced Due Diligence That Reflects Real Payment Behaviour
EDD processes should routinely incorporate questions on mobile money usage, including platforms, transaction volumes, purpose, and counterparties. Treating mobile wallets as peripheral to commercial activity is increasingly outdated.
Moving Forward
The mobile money revolution remains one of the most significant financial inclusion achievements of the past two decades. Yet it has also introduced a level of complexity that is not fully reflected in many existing AML frameworks used by UK regulated institutions.
The core challenge is no longer whether firms are exposed to African payment corridors. It is whether their compliance frameworks are sophisticated enough to understand what that exposure truly means in 2026 and whether their controls are designed for the way money actually moves today, rather than how it moved in the past.
References
[i] GSMA. The State of the Industry Report on Mobile Money 2026 (14th ed.). London: GSMA, 2026. p. 11. Available at: https://www.gsma.com/sotir/wp-content/plugins/plugin_gsma_sotir/reports/The-State-of-the-Industry-Report-2026_English.pdf.
[ii] https://blogs.worldbank.org/en/peoplemove/in-2024–remittance-flows-to-low–and-middle-income-countries-ar
[iii] FCA (2023) Dear CEO: FCA Priorities for Payments Firms, 16 March 2023. Available at: https://www.fca.org.uk/publication/correspondence/priorities-payments-firms-portfolio-letter-2023.pdf
