An Empirical Examination of Why Mobile Money Schemes Ignite in Some Developing Countries but Flounder in Most

52 Pages Posted: 18 Mar 2015 Last revised: 26 Mar 2015

See all articles by David S. Evans

David S. Evans

University College London; Global Economics Group

Alexis Pirchio

Global Economics Group

Date Written: March 14, 2015


Mobile money schemes have grown rapidly in some developing countries but failed in many more. This paper reports the results of an empirical study of mobile money schemes in 22 developing countries chosen based on prior evidence to include roughly equal numbers of successes and failures. It uses a combination of quantitative and qualitative evidence to determine why some countries succeeded in launching mobile money schemes and others failed. The analysis is guided by multi-sided platform economics and in particular recent work on the role of ignition and critical mass. We found that of the 22 countries, mobile money schemes have grown rapidly in 8; mobile money schemes have grown but not rapidly in 3; and mobile money schemes have largely failed to take hold in 8. (It is still too soon for us to make a call in 2 countries and there are no bases to determine ignition for 1 country.) Based on a detailed investigation into the similarities and differences between these countries and across the categories we reached several key findings. The first finding is the most robust and important. (1) Heavy regulation, and in particular an insistence that banks play a central role in the schemes, together with burdensome KYC and agent restrictions, is generally fatal to igniting mobile money schemes. (2) Mobile money schemes have been more likely to succeed in poorer countries that lack basic infrastructure. (3) The growth of the send-receive and the cash-in/cash-out platforms must go hand in hand. (4) Ignition and explosive growth occurs quickly or not at all.

Keywords: mobile money, financial inclusion, financial regulation, payments regulation, multi-sided platforms, mobile payments, CICO agents, MPESA

JEL Classification: E42, E44, E58, G21, G28, L25, L26, L51, L52, L53, L86, L96, L86, L88, N27, N87, O16, O25, O55

Suggested Citation

Evans, David S. and Evans, David S. and Pirchio, Alexis, An Empirical Examination of Why Mobile Money Schemes Ignite in Some Developing Countries but Flounder in Most (March 14, 2015). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 723, Available at SSRN: or

David S. Evans (Contact Author)

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Global Economics Group ( email )

One Beacon St
Boston, MA 02108
United States

Alexis Pirchio

Global Economics Group ( email )

1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States

Do you want regular updates from SSRN on Twitter?

Paper statistics

Abstract Views
PlumX Metrics