The (non-)emergence of mobile money systems in Sub-Saharan Africa: A comparative multilevel perspective of Kenya and Nigeria

Abstract

Mobile money systems are radically transforming the lives of a large fraction of the Sub-Saharan population. The emblematic success story of M-Pesa of Kenyan telecommunications operator Safaricom has received wide acclaim for being both the first company that launched mobile money and its mass adoption in just a few years. Despite efforts to replicate this success in other countries in Sub-Saharan Africa, many are struggling to get mobile money off the ground. This paper aims to contribute to a better understanding of the mechanisms that explain these differences by using a comparative case study analysis of Kenya and Nigeria that are comparable in many respects but are extreme opposites in their adoption of mobile money. Theoretically drawing on a combination of a multilevel perspective of sociotechnical transformation (MLP) and innovation ecosystems, we identify the idiosyncratic elements that play a role in the development of a critical mass of user and agent networks necessary for the survival of mobile money systems. We argue that while network externalities have contributed to a mass adoption of mobile money in Kenya, the different institutional and industrial conditions in Nigeria suggest that network externalities are taking much more time to be generated there and that achieving similar adoption rates as in Kenya might therefore just be a matter of time.