Actor-based incentives for the restriction of mobile payments in developing countries

Mobile phones promote financial inclusion in developing nations by enabling access to credit savings, and transfer services. These payment systems rarely achieve nationwide usage that is sufficient for network effects, a problem that existing literature attributed to exogenous factors such as regulations, poverty, and infrastructure costs. This paper argues that banks, telecoms, and governments are incentivized to inhibit the spread of mobile payments because the systems harm their institutional stability. The paper presents theoretical and empirical scenarios in which each actor would be incentivized to restrict mobile payments. The conclusion is that support for mobile payments is not universal, and future endeavors must account for the incentives of relevant actors.