My Money, Your Name: Challenges and Workarounds in ID-Required Mobile Money in East Africa

Paper Title

My Money, Your Name: Challenges and Workarounds in ID-Required Mobile Money in East Africa

Publication Info

• Topic area: Mobile money access challenges due to ID requirements in East Africa
• Keywords: Mobile money, third-party SIM cards, ID registration, Kenya, Tanzania, financial inclusion, KYC compliance, digital identity, fraud, HCI

Background and Problem

• Problem / challenge: Many individuals in Sub-Saharan Africa lack official IDs, which are mandatory for SIM card registration and mobile money (MoMo) access. This leads to widespread use of third-party SIM cards, creating challenges in security, privacy, and financial inclusion.
• Significance: Mobile money is critical for financial services in low- and middle-income countries, especially in Sub-Saharan Africa, where over 20% of adults rely solely on MoMo. Addressing ID-related barriers is essential for equitable access and reducing risks associated with third-party SIM use.
• Motivation and related work: Prior research has quantified third-party SIM use and explored phone-sharing practices but lacks detailed insights into the lived experiences, challenges, and systemic barriers faced by third-party SIM users. This study addresses these gaps by examining ID-related challenges and the implications of third-party SIM usage in Kenya and Tanzania.

Solution

• Proposed approach: Qualitative study exploring third-party SIM usage, ID registration barriers, and perceptions of mandatory SIM registration through interviews with 72 participants in Kenya and Tanzania.
• Novelty:
  1. Detailed documentation of how third-party SIM cards are acquired and used.
  2. Analysis of the personal and systemic barriers to ID registration.
  3. Examination of the risks and implications of third-party SIM use, including financial and privacy concerns.
  4. Recommendations for policy and system design to address ID-related barriers and improve MoMo access.
• Procedure and key techniques:
  • Conducted semi-structured interviews with 72 participants (36 each in Kenya and Tanzania) from urban and rural areas.
  • Categorized participants into five SIM user groups (e.g., third-party SIM users, first-party SIM users).
  • Analyzed challenges in ID registration, SIM acquisition, and MoMo usage using inductive coding and thematic analysis.

Results

• Concrete findings:
  • 18% of SIM cards in Sub-Saharan Africa are third-party SIMs.
  • Key challenges for third-party SIM users include KYC compliance, financial insecurity, privacy concerns, and societal judgment.
  • ID registration barriers include complex processes, insufficient resources, and long processing times, with 1 in 3 participants failing on their first attempt.
  • Third-party SIM users face risks such as wrongful legal implications, financial losses, and reduced privacy.
• Advantage over baselines: Provides the first in-depth qualitative analysis of third-party SIM use and ID-related barriers in Kenya and Tanzania, highlighting systemic and personal challenges not addressed in prior studies.
• Experiments / evaluation:
  • Study sites: Nairobi, Dar es Salaam, and rural areas in Kenya and Tanzania.
  • Participant demographics: 50% urban, 50% rural; balanced gender and age representation.
  • Data collection: Semi-structured interviews in Swahili and English, analyzed using NVivo.
• Limitations and future work:
  • Non-representative sampling limits generalizability.
  • Potential biases due to social desirability and recall issues.
  • Future work should include larger-scale studies, fraud prevalence measurement, and testing of proposed system designs.

Summary

This study investigates the challenges of ID-required mobile money systems in Kenya and Tanzania, focusing on third-party SIM usage and ID registration barriers. Through interviews with 72 participants, it identifies systemic and personal challenges, including KYC compliance issues, privacy risks, and delays in ID processing. The findings highlight the prevalence of third-party SIM use due to ID inaccessibility and propose policy and design recommendations, such as community-endorsed SIM registration and shared ID management systems. These insights contribute to improving financial inclusion and security in mobile money ecosystems.