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The Dual Role of Mobile Payment in Developing Countries

Laetitia Chaix () and Dominique Torre ()

No 2015-01, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This paper analyzes the capacity of mobile-payment solutions to improve financial inclusion in developing countries. It elaborates from rural East African countries experiences where mobile payment services have developed rapidly. With a simple dynamic model which rationalizes traders' adoption process of distant mobile payment services, we analyze the role of telephonic operators in financial inclusion. We point out the interest of a diversified supply of m-payment services, including simplified solutions proposed by operators alone, in complement of more advanced services involving financial partners. We explain how such a diversified supply, including a ‘frugal’ innovative component, can be more efficient to improve financial inclusion than the only elaborated solutions provided cooperatively by operators and banks cooperatively.

Keywords: Mobile-payment services; Financial inclusion; Developing countries; Switching costs; Frugal innovations (search for similar items in EconPapers)
JEL-codes: E42 O33 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2015-01
New Economics Papers: this item is included in nep-ban, nep-mac and nep-mfd
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Published in Revue Economique, 2015, vol. 66, no. 4 pp. 703-727.

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