More research needed into the impact of m-banking and m-payments


A report, M-banking and economic development: Linking adoption, impact, and use, has been produced by Jonathan Donner, Microsoft Research India and Camilo Andres Tellez, London School of Economics and Political Science. Its aim is to explore the use of m-banking and m-payments systems and presents data from exploratory work with small enterprises in urban India. Its conclusion is that more research is required.

The paper argues that contextual research is a critical input to effective adoption or impact research. Further, it suggests that the challenges of linking studies of use to those of adoption and impact reflect established dynamics within the Information and Communication Technologies and Development (ICTD) research community.

The paper identifies three interlinked themes from the broader literature: amplification versus change; simultaneous causality; and a multi-dimensional definition of trust. It argues each can offer greater theoretical clarity to future research on m-banking and m-payments systems.

The paper states the spread of mobile phones across the developing world is one of the most remarkable technology stories of the past decade. Many of these new mobile users in emerging markets live in informal and/or cash economies, without access to financial services that others take for granted.

The new financial services take a variety of forms – including long-distance remittances, micropayments, and informal airtime bartering schemes -and go by various names, including m-banking, mobile transfers, and m-payments. Taken together, they are no longer pilots; in the Philippines, South Africa, Kenya, and elsewhere, these services are broadly available and increasingly popular.

Yet scholarly research on the adoption and socio-economic impacts of m-banking and m-payments systems in the developing world is scarce Even less attention has been paid to the social, economic, and cultural contexts surrounding the use of these systems.

An exploration is underway between banks, mobile operators, hardware and software providers, regulatory agencies, donors, and users, to determine the shape of m-banking and-payments services in the developing world.

The report concludes that the emergence of m-banking and m-payments systems has implications for the more general set of discussions about mobile telephony in the developing world. For example, it underscores the way the device blurs the domestic and the productive spheres, the social and the transactional.

Each transaction is influenced by (and reinforces) the structural position of people in broader informational networks. The latest case of m-banking and m-payments systems is a reminder that an understanding of the role of the mobile in developing societies must include its role in mediating both social and economic transactions, sometimes simultaneously.

Theory about the significance of mobile communications in the developing world has focused on voice and text messaging. This focus is appropriate, but the emergence of m-banking also underscores how, occasionally, innovations emerge from unexpected places and have the capability of reconfiguring the significance of a technology to its


Mobile theory must keep pace, accounting for m-banking and m-payments systems along with other capabilities enabled by this increasingly flexible technology.

A possible critique of this paper is that, while it calls for additional studies from the use perspective, it offers only a brief case study of that kind. Nevertheless, the case study and the paper may be of value to researchers considering further inquiries into the m-banking and m-payments space at this early stage.

It illustrates how communication research can improve

understanding of the m-banking/m-payments phenomena by providing detailed studies of everyday use and how communication research can use the same phenomena as a new setting for the testing of various theories.

The particular properties of m-banking and m-payments systems in the developing world which merge mediated communication and financial transactions, unwritten norms and technological affordances, should make them appealing to researchers more interested in social capital or domestication or diffusion than in m-banking per se.

In no way is this paper supposed to be an admonition against additional adoption or impact research; it argues only that those forms of research can be made stronger by a scan of the complementary literature that apply the ensemble or use perspectives. Adoption studies can benefit from stronger articulation of what is being adopted (occasional transfers versus virtual wallets, stored value versus credit, and so on) to augment or replace which existing behaviours

(remittances to family, loans to friends, or payments to institutions).

Impact studies can benefit from a stronger articulation of a myriad of possible primary, secondary, and tertiary effects