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Mobile Money, Interoperability, and Financial Inclusion

Author

Listed:
  • Markus K. Brunnermeier
  • Nicola Limodio
  • Lorenzo Spadavecchia

Abstract

This paper investigates the tradeoff between competition and financial inclusion resulting from the vertical integration between mobile network and money operators. Joining newly assembled data on mobile money fees through the WayBack machine, with sources on network coverage and financials, we examine the staggering across African operators and countries of platform interoperability – a policy that promotes transactions and competition across mobile money operators. Our results show that interoperability benefits users by lowering mobile money fees and their dispersion across operators. However, these positive effects are offset by a decrease in mobile towers and network coverage, especially in rural and poor districts, which, in turn, leads to a lower financial inclusion. We note that combining interoperability with subsidies for rural telecommunications delivers lower fees without hurting coverage.

Suggested Citation

  • Markus K. Brunnermeier & Nicola Limodio & Lorenzo Spadavecchia, 2023. "Mobile Money, Interoperability, and Financial Inclusion," NBER Working Papers 31696, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31696
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    Cited by:

    1. Aurazo, Jose & Gasmi, Farid, 2024. "Digital payment systems in emerging economies: Lessons from Kenya, India, Brazil, and Peru," Information Economics and Policy, Elsevier, vol. 69(C).
    2. José Aurazo & Carlos Cantú & Jon Frost & Anneke Kosse & Carolina Velasquez, 2024. "A revolution in digital payments: faster, user-friendlier and cheaper," BIS Papers chapters, in: Bank for International Settlements (ed.), Faster digital payments: global and regional perspectives, volume 127, pages 3-15, Bank for International Settlements.
    3. Angelo D'Andrea & Patrick Hitayezu & Kangni Kpodar & Nicola Limodio & Andrea Filippo Presbitero, 2025. "Developing the Mortgage Market: Technology, Property Rights, and Banking," Mo.Fi.R. Working Papers 195, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    4. Hjort, Jonas & Tian, Lin, 2025. "The economic impact of internet connectivity in developing countries," LSE Research Online Documents on Economics 129143, London School of Economics and Political Science, LSE Library.
    5. Bair, Sabrine & Miquel-Florensa, Josepa & Ozyilmaz, Hakan, 2024. "Two-Sided Financial Technology Underadoption: Experimental Evidence from Jordan," TSE Working Papers 24-1582, Toulouse School of Economics (TSE).
    6. Mohammad Hafiz Abdul Razak & Muhammad Hafiz Abd Rashid & Firdaus Abdullah & Amirul Afif Muhamat & Ahmad Zuhairi Zainuddin, 2024. "Customers on the Move: Predicting Customer Satisfaction among Mobile Banking Users in Malaysia," Information Management and Business Review, AMH International, vol. 16(3), pages 589-598.

    More about this item

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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