Abstract
Kenya which is considered a leader of digitization of money in the form of mobile money in the developing world has been compared in some studies with Sweden, world leader in digitization of financial transaction among its residents. Despite the progress in digitization of financial transactions witnessed in many countries, opinion is still divided on whether full digitization of financial transactions is feasible. This study examines the symbolism of the physical money among low-income earners in Kenya a key variable to be considered in any move towards full digitization of financial transactions. The study surveyed 750 low-income households across Kenya and conducted focus groups. Findings indicate that Kenyans consider physical money as symbol of purchasing power that is irreplaceable by mobile money. They view mobile money as a complementary financial transactions facilitator especially for money transfer and not a replacement of cash. Findings also suggest that the advent of mobile money is be associated some increase in the degree of disconnection in personal interactions in social relationships. It also emerged that mobile money has facilitated continuity of rotating saving and credit associations in cases of mobility resulting from employments or other factors.
Highlights
The definition of digital money is quite broad because it encompassing all non-cash and non-paper value exchange transactions
A conclusion from the findings of this study regarding the effect of mobile money on the symbolism of physical money suggests that low-income earners in Kenya consider having physical money or cash as more important than having mobile money
This category of Kenyans view mobile money as a complementary financial transactions facilitator especially for money transfer and not a replacement of cash. They consider physical money as symbol of purchasing power that is irreplaceable by mobile money and irrespective of having money in mobile many accounts, they must replenish their physical money from mobile money once it is depleted
Summary
The definition of digital money is quite broad because it encompassing all non-cash and non-paper value exchange transactions. For the last 30 years, the world has seen a progressive digitization of money and payment systems. Some countries such as Singapore set out as early as 1998 to completely digitize it money in 10 years by adopting an electronic legal tender, the Singapore Electronic Legal Tender (OECD, 2002). Cash transaction account for only three percent of total transactions in Sweden as compared to seven percent of all transactions in the USA and nine percent in the Eurozone. It is projected by the Stockholm’s Royal Institute of Technology that Sweden may become the first cashless country by 2030 (Mark 2015). Many other countries (Note 1) have enacted legislations geared towards promoting digitization such as restricting large value transactions to digital means (Beretta, 2014; Ejiofor & Rasaki, 2012)
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