Why mobile money has had only limited penetration in rural Africa

[The author paints a decidedly more pessimistic picture of the impact of mobile money in rural Africa than most accounts]

Agents must process a certain volume of transactions each day to make a profit, which has kept the average M-Pesa transaction as high as $27. This means serving low-income rural areas, where is therefore just not economical for them, and they go where the money is. Not great news if you’re living on on a few dollars a day and wish to make sub-$2 transactions.

 Let’s say, for a dedicated agent, who earns 100% of his income from transactions, the fixed monthly cost is between 150 and $250. Taking a percentage of each transaction, that agent would have to process over $20,000 in transactions just to break even. Doing that on single dollar transactions, he would be required to process two transactions a minute, eight hours a day, seven days a week. [link]




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