The Home Economics of E-Money: Velocity, Cash Management, and Discount Rates of M-Pesa Users
- (pp. 369-74)
AbstractWe 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.
Citation2013. "The Home Economics of E-Money: Velocity, Cash Management, and Discount Rates of M-Pesa Users." American Economic Review, 103 (3): 369-74. DOI: 10.1257/aer.103.3.369
- D14 Personal Finance
- E42 Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
- O12 Microeconomic Analyses of Economic Development
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance