So far, digital technology has provided more promises than results. The biggest success so far has not been in building savings and assets, but in transferring money between friends and family and making payments. A study conducted by MFO shows that MT helps more in dealing with shocks more quickly rather than building household wealth.
- 50% of M-PESA users are unbanked and 41% live in rural areas 
- users primarily transfer money from urban areas to family members in rural areas
- average daily balance of median respondent was about $3.70
- almost 70% of the money going into an account leaves that account before any new money is put in
- in 88% of cases, the e-money is cleared out of the account on the same day it is received
- M-PESA played an important role in helping clients manage financial emergencies, such as hospital bills 
- more than 75 financial institutions in Kenya now work with Safaricom to provide mobile banking to their customers
- customers have found banking services linked to M-PESA difficult to use, filled with processing delays, and errors.
- getting the banks’ software systems to interface with Safaricom’s in a way that ensures that payments are deposited quickly to the correct account has proved to be an ongoing challenge 
Digital transactions can contribute significantly to achieving the goal of full financial inclusion, but there is much work left to be done. Mobile technologies make it possible to provide the very poor and the most remote clients with financial services at an appropriate price. So far, though, we do not have breakthroughs in asset-building financial services that match the rapid growth of payment services. To do that, we will need to go far beyond using mobile technologies for processing payments. Rather, we will need to use this technology to re-engineer financial services for the poorest so that we can provide more relevant services at lower costs – services that are informed by a much better understanding of clients’ cash flows, needs, aspiration, and preferences.
 William Jack and Tavneet Suri, 2010, “The Economics of M-PESA: An Update” (Chicago, IL, USA: Consortium on Financial Systems and Poverty, University of Chicago), http://bit.ly/Jack-Suri2010.
 Guy Stuart and Monique Cohen, 2011, “Cash In, Cash Out Kenya: The Role of M-PESA in the Lives of Low-Income People” (College Park, MD, USA: Financial Services Assessment Project, University of Maryland), 10, http://bit.ly/Stuart-Cohen2011.
 Mukesh Sadana et al., 2011, “Analysis of Financial Institutions Riding the M-PESA Rails” (Lucknow, India: MicroSave), 3, http://bit.ly/Sadana-etal2011.
Photo Credits: Safaricom/M-PESA
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We will need to use this technology to re-engineer financial services for the poorest so that we can provide more relevant services at lower costs.
Table of Contents
- Executive Summary
- Reaching Fewer
- The Promise of Mobile Technology
- The Psychology of Scarcity
- Developing Appropriate Products
- Conclusion and Recommendations
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