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Bridges to Cash: The Retail End of M-PESA

Savings & Development, Vol. 34, No. 2, 2010

34 Pages Posted: 9 Aug 2010 Last revised: 14 Jul 2011

Frederik Eijkman

affiliation not provided to SSRN

Jake Kendall

University of Washington, CSE

Ignacio Mas

Tufts University

Date Written: May 1, 2009

Abstract

M-PESA is a remarkably successful mobile payments system launched in Kenya three years ago. Users are able to send money to each other conveniently from their M-PESA using only their mobile phones. A key to the success of M-PESA is the availability of an extensive network of retail shops that accept M-PESA deposits and withdrawals, i.e. they stand ready to exchange cash and electronic value. It is the stores that provide liquidity to the system, and they are paid a commission by M-PESA for this service. Behind the store is a network of intermediaries that arrange the logistics around cash management. In this paper we look at daily transactional data from six M-PESA stores in Western Kenya in order to better understand the liquidity management needs of these stores. We examine how liquidity needs vary by location and day of week/month, and by the level of service offered by the store.

Keywords: Mobile Money, Retail Banking, Microfinance, Electronic Payments, Kenya

Suggested Citation

Eijkman, Frederik and Kendall, Jake and Mas, Ignacio, Bridges to Cash: The Retail End of M-PESA (May 1, 2009). Savings & Development, Vol. 34, No. 2, 2010. Available at SSRN: https://ssrn.com/abstract=1655248 or http://dx.doi.org/10.2139/ssrn.1655248

Frederik Eijkman

affiliation not provided to SSRN ( email )

Jake Kendall

University of Washington, CSE ( email )

Seattle, WA 98195
United States

Ignacio Mas (Contact Author)

Tufts University ( email )

Medford, MA 02155
United States

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