Mobile Payments Go Viral: M-PESA in Kenya
Year: 2010
Type: preprint
Abstract: M-PESA is a small-value electronic payment and store of value system that is accessible from ordinary mobile phones. It has seen exceptional growth since its introduction by mobile phone operator Safaricom in Kenya in March 2007: it has already been adopted by 9 million customers (corresponding to 40 percent of Kenya's adult population) and processes more transactions domestically than Western Union does globally. M-PESA's market success can be interpreted as the interplay of three sets of factors: (i) pre-existing country conditions that made Kenya a conducive environment for a successful mobile money deployment; (ii) a clever service design that facilitated rapid adoption and early capturing of network effects; and (iii) a business execution strategy that helped M-PESA rapidly reach a critical mass of customers, thereby avoiding the adverse chicken-and-egg (two-sided market) problems that afflict new payment systems.
Source: SSRN Electronic Journal
Authors: Ignacio Mas, Dan Radcliffe
Institutions: Tufts University, Gates Foundation
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2164178935