Institute for Money, Technology & Financial Inclusion

The popularity and use of Mobile Money is increasing in Africa, indicating a trend towards cashlessness in the continent’s developing economies. The Central Bank of Zambia redenominated the Kwacha (Zambian National Currency) in 2013. This decrease in the volume (but not value) of notes handled on a daily basis at both individual and institutional levels has eliminated the burdens associated with low value currencies. It was unclear whether a more convenient medium of exchange would impact the adoption of Mobile Money, which was introduced to Zambians around the same time. The current study examined the initial impact of the 2013 currency redenomination of the Zambian national currency the Kwacha on Mobile Money use.

Results showed that (i) the new currency was generally favored over the old currency; (ii) the new notes were perceived as easier to use; (iii) the new coins were perceived as burdensome to use and carry around; and(ii) a majority of Zambians did not use Mobile Money in the initial aftermath of the currency rebasement. The initial slow adoption of mobile money was influenced by (i) the limited “payment spaces” in which it could be used, (ii) lack of awareness, and (iii) unclear distinctions between online banking and mobile money for banked consumers. The majority of identified Mobile Money users in our study used it as a means to send remittances.

In the year and a half since the fieldwork was conducted, mobile money use has increased in Zambia, indicating that the accessibility of a more portable version of legal tender alone does not serve as a technology- adoption barrier.