Scaling Mobile Money

Journal of Payments Strategy & Systems, Vol. 5, No. 3, September 2011

19 Pages Posted: 23 Sep 2010 Last revised: 2 Jan 2012

Ignacio Mas

Tufts University

Daniel Radcliffe

Bill and Melinda Gates Foundation

Date Written: May 31, 2011

Abstract

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.

Suggested Citation

Mas, Ignacio and Radcliffe, Daniel, Scaling Mobile Money (May 31, 2011). Journal of Payments Strategy & Systems, Vol. 5, No. 3, September 2011. Available at SSRN: https://ssrn.com/abstract=1681245

Ignacio Mas (Contact Author)

Tufts University ( email )

Medford, MA 02155
United States

Daniel Radcliffe

Bill and Melinda Gates Foundation ( email )

P.O. Box 23350
Seattle, WA 98102
United States

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