I just read this controversial article about how mobile payment systems could be abused by criminals and terrorists to fund illegal activities unless sophisticated systems and monitoring are put in place. It seems the attractiveness of m-payments to the unbanked particularly the fact that anyone can do it, often anonymously, could also attract abuse.

A few quotes:

"We are on the cusp of a new era of terror financing, that of mobile payments or "m-payments." An m-payment system is being developed by members of the GSM Association to enable migrant workers and the poor who do not have bank accounts to transfer money internationally, efficiently and inexpensively. According to the World Bank, 175 million migrants transferred at least $230 billion international remittances in 2005. Are Hamas, al Qaeda, Hezbollah and their likes far behind?"

"Stored value cards do not require a bank account or credit card to activate and use, nor do they require two forms of government-approved identification, just plain old cash. The majority of cards only allow low levels of cash to be held on the card, but some allow the transfer of thousands of dollars."

"While the U.S. government, concerned with the potential impact of reporting requirements on the day-to-day operations of electronic funds transfer systems, is conducting feasibility studies, the regulatory framework is not capable of dealing with the latest digital developments. To avoid the abuse of this new technology by criminals and terrorists, the government needs to adopt a sophisticated digital tracking system now, as well as put in place a digital system to report in real time on transfers and block the flow of illicit funds."

What do you think?
Is this a serious threat?
What needs to be done to prevent this kind of abuse?

Comments welcome.