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Governments are the principal barrier to mobile money

Hard truth about why the successful mobile payments model pioneered in Kenya has failed to spread.

However Kenya’s success has yet to be replicated much elsewhere. More than half of all the world’s mobile-money transactions are handled by Safaricom. Mobile money is popular in one or two chaotic countries, such as Sudan and Somalia, but barely used in most places where it could do immense good, including India and China.

Not all countries need mobile money, of course. Rich countries, with cash machines, credit cards and internet banking, have little use for it. And among developing countries, not all have Kenya’s specific mix of circumstances. Safaricom had a dominant market share when it launched M-PESA, giving the service a large base of potential customers. But there is also a bad reason why mobile money has failed to spread. In Kenya the government took the enlightened approach of allowing M-PESA to go ahead, rather than tying Safaricom in red tape. Many of the poor countries that would most benefit from mobile money seem intent on keeping its suppliers out—mainly by insisting they should be regulated like banks.

The report.

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