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M-payment use and remittances in developing countries: a theoretical analysis

Eric Darmon (), Laetitia Chaix and Dominique Torre ()
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Eric Darmon: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: Many developing countries are characterized by high levels of remittances and low levels of financial inclusion. In this context, introduction of M-payment services can be seen as a means of improving both financial inclusion and remittance levels. To our knowledge, M-payments and remittances so far have been studied separately; in this paper, we investigate their interplay by analyzing how domestic use of M-payment services alters individual remittance decisions, and thus impact on aggregate remittance flows and welfare. We consider a theoretical model which accounts for both the decision to send a remittanceand the remittance receivers' use of that remittance. We find that M-payment use has a positive effect on aggregate remittanceflows and also a favorable impact on welfare. However, we find that once introduced, the price of M-payment services can have unpredictable effects.

Keywords: mobile-payment; M-payment; remittance flows. (search for similar items in EconPapers)
Date: 2016
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01576774
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Published in Revue d'économie industrielle , 2016, L'économie numérique en question, 156, pp.159-183. ⟨10.4000/rei.6469⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01576774

DOI: 10.4000/rei.6469

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