Scaling Mobile Money
University of Oxford; Tufts University
Bill and Melinda Gates Foundation
May 31, 2011
Journal of Payments Strategy & Systems, Vol. 5, No. 3, September 2011
Retail payment systems require scale to get off the ground and struggle to grow incrementally, as they need to build trust, reap network effects and overcome chicken-and-egg problems of acquiring both customers and merchants. To overcome these barriers, they must (i) create enough urgency in customers’ minds to learn about, try, and use the service; (ii) invest heavily in above- and below-the-line marketing to establish top-of-mind awareness of (and trust in) the service among a large segment of the population; and (iii) incur considerable customer acquisition costs (beyond marketing and promotion) to ensure that their cash-in/out merchants are adequately incentivized to promote the service. Many deployments around the world have potential to scale, but are stuck in the ‘sub-scale trap’ due to under-resourcing.
Number of Pages in PDF File: 19Accepted Paper Series
Date posted: September 23, 2010 ; Last revised: January 2, 2012
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