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Revue d'économie industrielle

2016/4 (No 156)

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‪Many developing countries are characterized by high levels of remittances and low levels of financial inclusion. In this context, introduction of M-payment services can be seen as a means of improving both financial inclusion and remittance levels. To our knowledge, M-payments and remittances so far have been studied separately ; in this paper, we investigate their interplay by analyzing how domestic use of M-payment services alters individual remittance decisions, and thus impact on aggregate remittance flows and welfare. We consider a theoretical model which accounts for both the decision to send a remittance and the remittance receivers’ use thereof. We find that M-payment use has a positive effect on aggregate remittance flows and also a favorable impact on welfare. However, we find that once introduced, the price of M-payment services can have unpredictable effects. ‪


  • mobile-payment
  • M-payment
  • remittance flows


  1. 1. Introduction
  2. 2. Related literature
  3. 3. The theoretical setting
    1. 3.1. Step 2 (domestic agents): M-payment use and consumption opportunities
      1. 3.1.1. Consumption opportunities
      2. 3.1.2. Payment systems
    2. 3.2. Step 1 (migrant agents): remittance decision
    3. 3.3. Benchmark
  4. 4. Results
    1. 4.1. Equilibrium outcome with M-payment
    2. 4.2. Effects of M-payment introduction
  5. 5. Conclusion

To cite this article

Éric Darmon, Laetitia Chaix, Dominique Torre, “ M-payment use and remittances in developing countries: a theoretical analysis ”, Revue d'économie industrielle 4/2016 (No 156) , p. 159-183
URL : www.cairn.info/revue-d-economie-industrielle-2016-4-page-159.htm.

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