The Home Economics of E-Money: Velocity, Cash Management, and Discount Rates of M-Pesa Users
American Economic Review · 2013 · Volume 103 · Issue 3
Abstract
We study the mobile phone-based money transfer system in Kenya. Based on aggregate data, we estimate that the velocity with which units of e-money are transferred among users is approximately four times per month, and that the average number of transfers undergone by a unit of e-money between its creation and destruction is approximately one. Most M-Pesa transactions are made by frequent users. Examination of data on withdrawals shows a high frequency of small withdrawals and no response to "notches" in the price schedule, indicating that many users seem to have high implicit discount rates.
Keywords
Personal Finance, Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems, Microeconomic Analyses of Economic Development, Economic Development: Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
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