NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, November 16, 2017

“Mobile money,” a checking account attached to a mobile phone number, has revolutionized the financial lives of millions of people in many developing countries without access to a banking infrastructure. Using text messages or apps on consumer phones and in partnership with mom-and-pop retailers, who serve as cash-in and cash-out points, telecom companies have created an accessbile and cost-effective virtual banking infrastructure in many developing countries.

While sending money to others is often seen as the primary value arising from mobile money, a forthcoming study in the INFORMS journal Marketing Science, a leading scholarly marketing publication, shows that in developing countries, mobile money provides another important source of value – a form of theft insurance by protecting cash from street robberies and stealing by relatives or burglars at home.

Photo courtesy of Institute for Money, Technology and Financial Inclusion.