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Riding the Rails of Mobile Payments: Financial Inclusion, Mobile Phones, and Infrastructure

This chapter on riding the rails of mobile payments analyzes payments as both technical and social infrastructures for “financial inclusion,” that is, political, business, and philanthropic projects designed to extend the benefits and functions of formal financial services to under- and unbanked populations around the world. Specifically, it is concerned with mobile payments—the use of mobile phones and networks for exchanging value in electronic form—as the “rails” upon which an increasingly broad range of financial products and services ride, e.g. insurance, credit, and savings. The ethnographic study of mobile payments offers a window into infrastructural change, the displacement of legacy systems, and the layering of new functionality onto existing systems that turn them into broader platforms. Platforms have a politics: they variously create, sunder, extend and transform relations. If infrastructures are settled political claims, mobile payments provide an example of what happens when these closed debates get reopened. It discusses three recent approaches to designing and implementing financial services that ride the rails of mobile payments: Kenya’s M-Shwari interest-bearing savings product, which works on top of Safaricom’s M-PESA mobile money infrastructure; the Reserve Bank of India’s creation of a new category of financial institution called “payments banks,” which allow non-bank entities to provide transfer, remittance, and savings services; and the Central Bank of Ecuador’s mobile payments system, the world’s first ever publicly mandated and central bank-led scheme of this sort. Different strategies for deploying mobile payments reveal the political and social entailments of financial infrastructures.

Cleo Turner
Cleo is DFI's CDFP coach and helps our students with the apply section of the Certified Digital Finance Practitioner (CDFP) program. As part of her role Cleo shares useful resources and insights from a wide variety of sources and authors with our community.

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