Mobile Payment Services in Developing Countries: firm capabilities and financial development

Project Webpage
Project Findings (Policy Brief): “Mobile payment services in developing countries Information, trust, and training: The ingredients for retail agents’ success”
Blog Post: Regulating Mobile Money: What’s at stake

Project Summary

Investigators:
Professor Saul Estrin (LSE)
Dr Susanna Khavul (LSE/San Jose University)
Dr Adeline Pelletier (Goldsmiths/LSE)

Funding Body: International Growth Centre

Summary: Mobile payment services (MPS) may foster financial inclusion in developing countries by providing a cheap and secure way of transferring, and, in certain cases, storing money. This is crucial in economies with a large unbanked population and environments where demand for secure and cheap money transfers is high. While some research exists on the impact of mobile money on consumers and on the financial behaviour of the poor (Jack and Suri (2011, 2014); Mbiti and Weil (2011)), little is known about the “supply side” of mobile payment provision. The overall objective of our project is to examine how mobile payment services promote sustainable economic growth by facilitating financial exchanges and improving the allocation of funds in an economy. Our study is set at the firm level. We will analyse the impact of three different types of MPS providers -banks, telecoms and “third party providers” (non-banks/non telecom providers) – on the reduction in transaction costs, the increase in the frequency of transactions, and the facilitation of the allocation of resources. Particular attention will be paid to the organizational structure that firms put in place to support their mobile payment services, and the interaction between the headquarters and the agents’ network.