Mobile Money Services Research Articles

The Real Effects of Mobile Money: Evidence from a Large-Scale Fintech Expansion

Mobile money services have rapidly expanded across emerging and developing economies and enabled new ways through which households and firms can conduct payments, save and send remittances. We explore how mobile money use can impact economic outcomes in India using granular data on transactions from Paytm, one of the largest mobile money service provider in India with over 400 million users. We exploit the period around the demonetization policy, which prompted a surge in mobile money adoption, and analyze how mobile money affects traditional risk-sharing arrangements. Our main finding is that mobile money use increases the resilience to shocks by dampening the impact of rainfall shocks on nightlights-based economic activity and household consumption. We complement these findings by conducting a firm survey around a phased targeting intervention which incentivized firms to adopt the mobile payment technology. Our results suggest that firms adopting mobile payments improved their sales after six-months of use, compared to other firms. We also elicit firms' subjective expectations on future sales and find mobile payment adoption to be associated with lower subjective uncertainty and greater sales optimism.

Provider and Consumer Perceptions on Mobile Money and Microfinance Integrations in Ghana: A Financial Inclusion Approach

This study examines the use and impact of mobile money and microfinance services in Ghana. It explores the perspectives of mobile money and microfinance service providers and consumers to identify the nature and extent of use, and their separate and complementary impact on financial inclusion. Qualitative data collected through interviews with service providers, agents, and consumer focus groups were used to draw parallels and contrasts between provider and consumer perceptions on impacts and challenges of the systems. The study addressed four specific objectives identified as provider perceptions on mobile money and microfinance integrations and financial inclusion; consumer perceptions on mobile money and microfinance integrations and financial inclusion; impacts of mobile money and microfinance integrations on the financial inclusion ecosystem; and challenges of mobile money and microfinance integrations for financial inclusion in Ghana. The results showed that provider perceptions primarily focus on consumer access, product range, convenience, and regulatory climate. Consumer perceptions also focus on network capacity, fraud and security, and complex user designs. The impacts of mobile money integrations appear to be additive for most users but also transformative for users who were previously excluded from the formal financial sector. However, there are eminent challenges related to system failures, fraud and security concerns, and consumer protection to be addressed to help facilitate the efficiency and sustainability of the mobile money ecosystem.

Mobile Phone Payments and Demand for Cash: The Case of Tanzania

This paper examines recent developments in mobile phone transactions in Tanzania, the extent of its adoption by the general public and motivation for its usage. It also explores how development in mobile phone transactions has affected the demand for cash holdings including its components (denominations) using cointegration approach supplemented by survey. Empirical estimation of Vector Error Correction Model (VECM) of demand for cash using Johansen’s procedure provides no evidence of reduced cash usage driven by proliferation of mobile money transactions. Meanwhile, survey evidence has shown that, in Tanzania, mobile phone transactions have progressively gained pace over the recent years and is now the most used method of payment after cash. This trend is driven by harnessing of underlying financial regulations and platforms, acceptance of this method of payment, security for not carrying cash and simplicity in terms of speed and outreach among the counterparties. The paper concludes that the use of mobile phone money services creates additional pressure on income velocity of money, with potential impact on prices. Under the current quantity based monetary policy framework, this calls for ensuring that monetary policy formulation takes into consideration of this novel development.

Effect of Mobile Banking on the Banking Behaviour of Informal Sector Workers in Accra, Ghana

Improving financial inclusion of informal sector workers is a major concern for economic development. The emergence of mobile banking and its increasing acceptability and use do present an opportunity to improve banking behaviour among informal sector workers. This study estimates the effect of mobile banking service on the banking behaviour of informal sector workers in Accra, Ghana. A probit regression model was fitted to a survey data of 296 respondents. The result indicates that although the introduction of mobile banking service has a positive effect on mobile banking, less than half of the respondents have changed their banking behaviour as a result of the introduction of mobile banking service. The respondents also perceived that the introduction of mobile money service has not led to a significant change in ineffective saving methods. Other factors that significantly influenced the banking behaviour were sex, age and income of the respondents. It is concluded therefore that, mobile banking service can improve financial inclusion among informal sector workers. However, an effective remedy should be established to address the emerging risks associated with the use of mobile banking service and to improve its security features.

Smartphone Usage in the Greater Accra Region of Ghana: What are the Critical Drivers?

Smartphone usage has increased significantly in recent times across rural, peri-urban and urban locations. However, the key underlying factors that drive the increased demand and usage are unclear. This study analyses the factors that influence people’s choice for smartphones across different geographical settings in the Greater Accra Region of Ghana, using a sample of 305 respondents. Data was collected using programmable tablets through a case study survey that sampled individuals across different locations randomly. By employing probit regression analysis, the study established that geographical location matters in the choice of smartphone usage. Urban and peri-urban locations significantly influence smartphone use while rural location was found to be insignificant. Education, age, access to mobile applications and access to mobile money services are positive and significant drivers of smartphone usage. Besides, the number of registered Subscriber Identity Module (SIM) cards used and affordability, negatively and significantly impacts on smartphone use. These findings are relevant to electronic consumers and companies, regulators and policymakers.

Strengthening technology risk management in mobile money lending

Innovative mobile money services have grown tremendously in the East African market. While there are positive effects of technology-enabled financial inclusion, risks exist. This study sought to strengthen the capacity of technology risk management by proposing practices and strategies that can protect the financial technology ecosystem. Applying the ISACA Risk IT Framework, data was collected in June 2019 from the leading digital lenders in Kenya. The study found that while regulated mobile lenders have an IT risk management environment that is viewed as a critical success factor, unregulated entities have minimal integration of IT risk management essentials. This study is useful to many developing countries where governments are working towards having secure and strong financial systems that contribute to the Millennium Sustainable Development Goals. Regulators and practitioners must ensure the financial technology lending ecosystem is protected from risks that could reverse gains made from witnessed developments in financial inclusion.

Adopting Mobile Money: Evidence from an Experiment in Rural Africa

Who uses mobile money? What is mobile money used for? This paper describes the mobile money adoption patterns following the experimental introduction of mobile money for the first time in rural areas of Southern Mozambique. We use a combination of administrative and household survey data to characterize early and late adopters, as well as their mobile money usage patterns during the three years after mobile money was introduced. We find that a large proportion of the individuals who were offered mobile money services actively adopted this technology. Adopters of mobile money (and early adopters in particular) are more educated than non-adopters, and they are also more likely to already hold a bank account. Positive self-selection of mobile money adopters raises questions about the effectiveness of mobile money as a tool for financial inclusion.

The Impact of Mobile Money on the Financial Performance of the SMEs in Douala, Cameroon

Often financially excluded by the traditional banking system, small and medium-sized enterprises (SMEs) in many developing countries have found in mobile money services (MMS) a sustainable alternative. Despite its potential in propelling inclusive growth, the use and adoption of mobile money (MM) by SMEs has generally been low in developing countries, and one of the reasons has been limited data that supported its impact on financial performance. As a result, there was a need to investigate the impact of the mobile money payment and receipt services on the financial performance of the SMEs in Cameroon. This paper implemented a mixed research paradigm with data collected through the administration of a survey questionnaire and from one-on-one in-depth interviews. A sample of 285 SMEs responded to the survey, while 12 owners/managing directors were purposively selected to participate in the personal interviews. Version 25 of the Statistical Package for the Social Sciences (SPSS) software was used to analyse the quantitative data, while the qualitative data was analysed along themes. The results were, after that, triangulated for credibility reasons. The concluding findings indicated that the mobile money payment and receipt services contributed of the order of 73% of the total variance in the turnover of the SMEs in Douala after they had begun to use the technology. By confirming the positive relationship between the use of mobile money services and the financial performance of businesses, it is hoped that all the relevant stakeholders will see this as a possible solution to the financial challenges that SMEs face in developing economies.

WhatsApp and Mobile Money: Ameliorating Crowdfunding for Social Change in Kenya

Use of WhatsApp as a social media technology and M-pesa, a mobile money service for crowdfunding in Kenya are proliferating at an incredible pace. Crowdfunding helps communities organize for effective participation in social and economic development and empowerment by making sure that members of the community get to benefit from services, such as access to social amenities and better infrastructure, which would not have been available if the community members were to wait for the government to provide the services. This method is being used at Kisii University for students’ retention and providing social welfare to students, their parents and university staff. The approach adopted by this study was qualitative inductive research, where the researcher had a one-on-one interview session with creators of crowdfunding campaigns and the funders using Skype and phone calls as interview tools.

A model for mobile money services adoption by traders in Uganda

AbstractMobile money services provide benefits for trade such as payment of bills, reduced cost and time for transactions, increased savings options, sales, and convenience. Despite the benefits, adoption and use of mobile money services by traders in Uganda remain low. This paper reports on the results of a study that explore the challenges traders face in using and adopting mobile money services in Uganda. Self‐administered questionnaire was used to collect data from 394 respondents in a survey. A model to support mobile money service adoption by traders is proposed. The proposed model extends the Unified Theory for the Acceptance and Use of Technology. Regression analysis indicated that performance expectancy, social influences, and sensitization constructs significantly influence the behavioural intention of mobile money services adoption for trade. On the other hand, security, effort expectancy did not significantly influence the behavioural intention to adopt mobile money services by traders. The findings further reveal that facilitating conditions influenced use behaviour of mobile money services for trade transactions. The proposed model is flexible and generic and can be utilized in other developing countries with similar contexts as Uganda.

The Utilization of Mobile Money Services in Small Scale Enterprises:A Case Study

Mobile money is an electronic wallet service that allows users to store, send and receive money using their mobile phone. This research is an effort to find out the adoption and utilization of mobile money services in small sized enterprises located in Gaborone, Botswana. Inevitably, other aspects such as different types of transactions carried out using mobile money services in small business, customer’s perception on quality of mobile money service providers, impeding factors of mobile money adoption are also studied for wider understanding of the subject. The findings of the study show that small enterprises use mobile money services to carryout transactions but the level of adoption is not significant. The study revealed that transactional costs and connectivity issues are major barriers of adoption of mobile money services. In conclusion the study recommended that the service providers must improve the connectivity issues and reduce transaction charges in order to increase the utilization of mobile money services

Digital financial innovations in the twenty-first century

Purpose Premised on the assertion that financial digitalization is currently the panacea and game changer in delivering progress towards the sustainable development goals (SDGs) through universal financial inclusion, especially in developing countries, the purpose of this paper is to establish the moderating effect of transaction tax exemptions in the relationship between mobile money adoption and usage and financial inclusion. Design/methodology/approach A semi-structured questionnaire was used to collect data from 379 micro, small and medium enterprises (MSMEs), which use mobile money services drawn from the Northern District of Gulu in Uganda to provide responses for this study. The predictive relevancy and the effect size of the model were determined by running partial least square algorithm through structural equation model (SEM) with 5,000 bootstrap samples in SmartPLS-SEM 3.0. Findings The findings indicated that all the latent variables of transaction tax exemptions showed significant and positive impact on mobile money adoption and usage to advance financial inclusion in developing countries. Moreover, when combined together, the overall SEM predictive model revealed a significant moderating effect of transaction tax exemptions in the relationship between mobile money adoption and usage and financial inclusion. This implies that transaction tax exemptions on digital financial innovations such as the mobile money services can stimulate economic growth through increased level of financial inclusion labeled as the main enabler in achieving the SDGs by the year 2030. Research limitations/implications Whereas data were collected from users of mobile money services, the samples were drawn specifically from MSMEs’ owners located in the Northern District of Gulu in Uganda. Thus, users located in other districts were not included in the sample for this study. Similarly, this study limited itself to only financial services offered through the mobile money platform. It ignored other digital financial channels such as the internet and electronic banking. Practical implications Going forward, in order to improve the economic well-being of households at the “bottom of the pyramid,” governments in developing countries should embrace the significant role of transaction tax exemptions in promoting digital financial innovations such as the mobile money services for increased level of financial inclusion. The governments in developing countries where mobile money has greatly spurred financial inclusion should not only reduce the existing transaction taxes on mobile money services but scrap it off in order to champion progressive increase in the level of universal financial inclusion prescribed as a key enabler in eliminating global poverty, especially in developing countries. Originality/value This study hints on the moderating effect of transaction tax exemptions in the relationship between mobile money adoption and usage and financial inclusion. The paradox in the current trends on transaction taxes on mobile money services, especially in developing countries remain a dearth in the nascent global FINTECH ecosystem.

Exploring Strategic Role of Innovation Strategies on Performance of Investment Cooperatives in Kenya

The link between innovation strategies and organizational performance is a key issue in the field of strategic management that contributes towards the overall performance and objectives. The purpose of the study was to explore the influence of innovation strategies on performance of investment cooperatives in Kenya. The study was anchored on innovation diffusion theory. The study used descriptive research design. The target population was 40 respondents and adopted stratified sampling technique. The study purposively sampled finance managers, investment managers. Semi structured questionnaire was the main instrument of collecting primary data. Data was analyzed both quantitively and qualitatively using SPSS version 24 and Microsoft excel. The study utilized multiple regressions analysis and correlation analysis to the nature of relationships. The study findings revealed that organization has adopted mobile applications, portals, and mobile money services to facilitate the speedy delivery of services to the customers that has led to the improvement in performance. The study recommends that relationship between innovation strategies and performance of investment cooperatives in Kenya should be enhanced to improve overall performance.

Mobile Money, Financial Inclusion and Digital Payment: The Case of Vietnam

The study provides an overview of mobile money account usage, financial inclusion and digital payment transaction trends in Vietnam, and considers the factors influencing these trends. In general, the rates of using mobile money service and account ownership at financial intermediaries in Vietnam are still low, and other indicators of digital transactions suggest low levels compared to those of countries with low- and middle- income as well as to the world averages. The research also shows that owning an account at a financial intermediary facilitates the use of mobile money. This is a positive trend, at least compared to the situation in some African countries. Finally, having an account at a financial intermediary and using mobile money services generally have a positive effect on the participation in non-cash transactions.

Analysing slow growth of mobile money market in India using a market separation perspective

ABSTRACTSince the application of mobile technology for financial services can contribute to the economic development of developing countries, it is critical to examine the inhibitors to using mobile money service in countries like India, which have an exceptionally low uptake of this service. Mobile money service enables the customer to carry out financial transactions over a mobile phone without requiring them to own a bank account. By adopting a market separation perspective, this theory-driven, exploratory study proposes and tests a rare event logistic regression model for using mobile money services in India. The analysis of 45,036 responses shows that the ownership of a SIM card (temporal separation), income and ownership of a bank account (financial separations), awareness of mobile money services (information separation), age and gender (social separations), and location of residence (spatial separation) significantly inhibit the use of mobile money services. Implications are discussed at the end.

Trajectory Dynamics in Innovation: Developing and Transforming a Mobile Money Service Across Time and Place

This paper examines how and why innovations are reshaped as they become implemented and used in locales that are distant and distinct from those where the innovation was initially developed. Drawing on an in-depth field study of the innovation process that produced a mobile money system for Kenya, we contribute an understanding of the particular dynamics that arise when an innovation trajectory interacts with local trajectories that constitute the local conditions and practices of specific places. We identify four distinct patterns of trajectory dynamics—separation, coordination, diversification, and integration—each of which has different implications for the innovation, its implementation, and consequences on the ground. Developing a model of trajectory dynamics in innovation, we theorize the processes through which innovations are transformed over time as they interact with multiple local trajectories and the specific innovation outcomes that are generated as a result. Such theorizing reconceptualizes traditional notions of innovation diffusion by explicating how and why innovations change in multiple and unexpected ways as they move to particular places and engage with local conditions and practices.

Drivers and outcomes of consumer engagement

Purpose The purpose of this paper is to examine the drivers of consumer engagement and its consequences via the experiences of mobile money services’ users in Ghana and to discuss its implications for the society, financial service innovation, delivery and operations. Design/methodology/approach A pre-tested survey instrument was used with a sample of 595 mobile money services users in Ghana. SmartPLS application was used to analyze the data and report findings. Findings The study shows that perceived risk, consumer empowerment, subjective norm, performance expectancy and effort expectancy influence the affect component of consumer engagement and explain around half of its variance. The effect of perceived risk on consumer engagement was counterintuitive. Perceived risk was significant and positive for cognitive processing, whereas the effect was significant but negative for affect. The authors found support for the positive effect of cognitive processing on advocacy intention but no support for its effect on continuous usage. By contrast, affect strongly influenced both advocacy intention and continuous usage of mobile money services. Practical implications The authors highlight the implications of mobile money services to business and marketing/service managers, policy makers, non-banking entities (such as telecoms and financial technology firms) and to the society in general. The authors provide important insights into how service providers can manage consumer engagement process and formulate marketing strategies to target and promote this simple, but innovative service to consumers. Moreover, the authors discuss the societal implications of the study in Ghana, a developing country. The authors recommend several options for future studies in order to stimulate the research agenda on mobile financial services in general. Originality/value The present study shows that although mobile money was initially introduced to help consumers who hitherto have no access to formal banking services, this form of banking has become increasingly popular among various consumer segments as its usage and adoption has increased multifold largely in emerging and developing countries. The main contribution of this study is the development and testing of the “mobile money customer engagement model.” Moreover, this study shows the key factors that influence the engagement process and the effects of these factors as analyzed within the context of a developing country.

EFFECT OF MOBILE MONEY SERVICES ON KENYA’S FINANCIAL INCLUSION

Purpose: The main objective was to determine the effect of Key mobile money services on financial inclusion in Kenya.
 Materials and Methods: The study adopted a census research design. The target population was limited to the 4 firms (Safaricom, Airtel, Equity and Telkom) providing mobile money services in Kenya. The study relied on secondary data. The study review period was between 2013 and 2018. Descriptive statistical approaches, regression and correlation analysis was used to analyze secondary data. Data was analyzed quantitatively by use of SPSS (Statistical Package for Social Scientist) V21 program.
 Results: The study established that the Mobile money deposit services, Mobile money saving services, Agency banking services and Mobile bill payment services positively and significantly affected Kenya’s financial inclusion.
 Unique contribution to theory, practice and policy: The study recommends that the providers of mobile money services should increase accessibility of these services to citizens since their continued usage leads to positive and significant growth of Kenya’s financial inclusion. The providers can achieve this by encouraging many citizens to be their agents in offering the services. Availability of many agents acting on behalf of the mother company in various parts of the country increases the levels of access of the financial services.
 Key words: Deposit Services, Saving Services, Agency Banking Services, Mobile Money Financial Inclusion

Mobile money as a frugal innovation for the bottom of the pyramid – Cases of selected African countries

ABSTRACTThis paper explores the concept of mobile money as a frugal innovation and a business model. While the frugal innovation theory is evolving, frugality addresses three critical issues about social problems, resources constraints and institutional voids. This paper argues that mobile money as a frugal innovation lies at the intersection of social innovation, technological innovation, and institutional innovation. The paper adopted a case study approach allowing for quantitative and qualitative analysis and interpretation of data to explore mobile money adoptions in selected African countries. We drew the study sample purposefully from countries that have witnessed significant adoption of mobile money services. We went on to layer data representing the cost of financial services, distribution or financial services points and financial inclusion rates from the select sub-Saharan African countries on the literature evidence, we interrogate the extent to which mobile money is both a frugal innovation and business model. This paper concludes that mobile money as a frugal innovation addresses affordability constraints and resource constraints, and reduces institutional voids in resource-constrained environments.

Determinants of Continuous Use of Mobile Money Payment Systems in Ghana.

This study examines the effect of user’s satisfaction on post-acceptance behaviour of mobile money users. Specifically, the paper identifies satisfactory factors and further examines the relationship between satisfaction and continuous use of mobile money application at the post-acceptance phase. Data was collected from 696 mobile phone users who had subscribed to mobile money services. Partial least squares (PLS) (Smart PLS 3.0) were used to analyse the collected data to test proposed hypotheses. This study revealed that users’ satisfaction is a significant factor that influences their intentions to continue to use mobile money services. The results indicated that users’ satisfaction is strongly influenced by confirmation and perceived usefulness which in turn significantly impact on continuous use of mobile money applications. Also, perceived security and privacy exert significant impact on users satisfaction. It was noted that charges and fees were insignificant but positively related to users’ intentions to continue to use mobile money applications. The findings have implications on both telecommunication firms and policy makers as they offer practical guidelines in developing strategies to ensure continuous use of mobile money applications/ services as we improve upon financial inclusion in Ghana in particular and Africa in general. This study therefore fills the gap in the post-adoption stage of mobile money usage and further use in Ghana.