In thinking through developing a vibrant digital financial system, issues such fee structure are critically important, particularly for the bottom of the pyramid. We have curated articles and whitepapers on these specific issues below, which we encourage you to read and discuss.
In this report, the Gates Foundation focuses on the economics of payment systems to understand how they can be transformed to serve poor people in a way that is profitable and sustainable in aggregate.
The fee structures for mobile money services vary based on a variety of factors such as the market and the particular services they provide—whether the focus is on delivering basic financial services, low-cost crop insurance, interest payments, or life insurance. Yet, fee structures should also be tailored to accommodate those at the bottom of the pyramid. These four innovative mobile money services across Zimbabwe, Tanzania, and Ghana have fee structures catered to both the needs and the financial behaviors of the poor.
While telecom companies have traditionally led the charge in mobile money, the visible growth in the sector has compelled financial firms to compete in this space. This example of the rivalry between Safaricom and Airtel Kenya showcases the importance of competition in creating a digital financial services system with low-cost fee structures and increased interoperability that will ultimately help reduce the barriers that prevent the poor from joining the formal economy.