View on Migration: Protect refugees with mobile banking
Many migrants have to use unregulated financial systems
Mobile-based peer-to-peer banking can bring safer finance into reach
Coordinated action needed across mobile networks
It’s a move that reflects the fragmenting world of European migration policy, lacking in solidarity, empathy and basic human decency. But what of the financial implications for asylum seekers?
I wondered whether innovative mobile financial services could protect migrants and their assets — not just at the Danish border but throughout migration routes. To find out more, I rang Nando Sigona, a migration researcher at Birmingham University in the United Kingdom. Sigona jointly leads MEDMIG, an international research project that aims to produce the first large-scale study of Mediterranean migration, based on interviews with 500 migrants.
Sigona explains that, to move money around, refugees tend to use a mixture of informal money brokers, borrowed bank accounts, hard cash and valuables such as gold or jewellery. All these systems are open to grotesque abuse by the criminals who feed off the refugee crisis, and bribery and robbery are common. Even where people have temporary access to a bank account, there are stories of people never getting their money back or being charged huge fees.
Many refugees use an “informal Western Union [money transfer] system”, often based on hawala, a traditional cross-border brokering service handled through agents and based on honour, passwords and promises, Sigona explains. In the sellers’ market that is this crisis, though, brokers charge extortionate fees and sometimes money disappears altogether. Policies like Denmark’s are likely to increase migrants’ vulnerability, Sigona says. “The risks are it really pushes people more and more into the hands of unregulated systems” as people attempt to move assets underground before the authorities take them.
But the situation could be vastly improved by transparent mobile banking services, he says. For the thousands awaiting decisions on asylum claims, mobile-based peer-to-peer banking is a pragmatic solution where formal financial systems are out of reach.
“On the western Balkan route, the Vodafone Foundation has set up mobile Wi-Fi posts where people can connect and recharge,” Sigona says. Networks such as these could support access to secure mobile banking apps and m-banking cash agents, drawing inspiration from the 255 mobile banking systems used worldwide today. 
But the extent of the crisis calls for coordinated action across mobile networks, rather than piecemeal initiatives. The Humanitarian Connectivity Charter launched in 2015 by GSMA, the global trade association for the mobile industry, aims to encourage and strengthen mobile operators’ capacity for responding and coordinating during crises.
Allowing refugees to open bank accounts, as Germany plans to, is another positive step, Sigona stresses. Access to transparent financial services “will really make life easier and help people avoid exploitation and violence”, he says.
Imogen Mathers is producer/assistant editor at SciDev.Net. @imogenmathers