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The Dual Role of Mobile Payment in Developing Countries

Author

Listed:
  • Laetitia Chaix

    (University of Nice Sophia Antipolis, France
    GREDEG CNRS)

  • Dominique Torre

    (University of Nice Sophia Antipolis, France
    GREDEG CNRS)

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.

Suggested Citation

  • Laetitia Chaix & Dominique Torre, 2015. "The Dual Role of Mobile Payment in Developing Countries," GREDEG Working Papers 2015-01, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  • Handle: RePEc:gre:wpaper:2015-01
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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2015-01.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
    1. Allen, Franklin & Carletti, Elena & Cull, Robert & Qian, Jun & Senbet, Lemma & Valenzuela, Patricio, 2012. "Improving Access to Banking: Evidence from Kenya," Working Papers 12-11, University of Pennsylvania, Wharton School, Weiss Center.
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    Cited by:

    1. Michaël Assous & Olivier Bruno & Muriel Dal-Pont Legrand, 2015. "The Law of Diminishing Elasticity of Demand in Harrod’s Trade Cycle (1936)," GREDEG Working Papers 2015-02, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.

    More about this item

    Keywords

    Mobile-payment services; Financial inclusion; Developing countries; Switching costs; Frugal innovations;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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