Mobile Money Adoption: A typology of factors impacting the development and diffusion across countries

Abstract

Mobile money innovations are expanding rapidly in developing countries, where they cater for the issue of financial exclusion by extending financial services to the millions of unbanked population. However, the adoption rate of mobile money solutions varies across different countries, making it an interesting case to explore the underlying factors impacting its development and diffusion. The cross-country analysis of 128 countries by employing the World Bank Global Findex Dataset (2017) highlighted the varying role of financial infrastructure, technological advancement, and socio-economic typology on the adoption and usage of mobile money adoption. The results of quantitative analysis through the Two-limit Tobit Regression reveal that mobile phone penetration, scope and quality of online services, telecom regulations, and rule of law positively impact the adoption rate. Lower access to formal banking channels and lower-income levels incline people toward more informal financial services like mobile money. The study further emphasises the need for mobile money solutions for the unbanked by addressing the paradox highlighted by Peruta (2017) through in-depth analysis by quantile regression. The results of quantile regression emphasize that mobile money solutions are not dependent on the existing financial infrastructure and address the problem of financial exclusion. The thesis findings have policy implications for countries seeking to achieve greater financial inclusion through mobile money solutions outlining the significant determinants for its adoption and diffusion.