Payment News

Mobile Money Agents Lose Out

Mobile money systems, of which M-Pesa is the best known, are evolving to the detriment of the network of agents who handle their transactions, according to a recent article in The Economist magazine. Mobile money systems allow people to transfer money using their phones without the need for bank accounts. The agents both accept and hand out cash that is transferred through the system.

There are now 3 million agents in Africa, according to The Economist, which is the same number as all the ATMs in the world. The agents are paid a commission on transactions by the mobile operators. Their role requires them to manage the balance between the electronic float on their account and the physical cash they hold. The Boston Consulting Group estimates it costs $1,000 to set up business and ten months to recoup that investment.