Mobile money enables funds to be deposited, transferred, and withdrawn electronically through mobile phone accounts.
Fueled by the success of Kenya’s M-Pesa mobile payment platform, mobile money is a rapidly growing alternative to cash in developing countries. Whereas mobile money services have been launched in more than 70 countries with the majority of current deployments in sub-Saharan Africa, most have not yet reached significant scale. The United States Agency for International Development (USAID) is committed to accelerating adoption and uptake of mobile money based on its potential to increase financial inclusion, root out corruption, and provide economic benefits to communities. The USAID Global Health Finance and Governance (HFG) Project seeks to promote the use of mobile money specifically to strengthen health systems.
Mobile money provides unique opportunities in the health sector. It can be integrated into existing activities—replacing cash flows—to improve efficiency, accountability, and transparency in financial transactions. It also opens up potential to improve scalability of subsidy and incentive schemes and to expand access to financial services such as credit and savings.
This paper reviews current use cases and potential applications of mobile money in health, including (a) bulk payments for salaries and per diems, (b) conditional cash transfer and pay-for-performance schemes, (c) collection of health insurance premiums, and (d) management of voucher schemes, with the overall objective of bringing attention to the benefits and challenges of using mobile money in the health sector. The three detailed case studies included in appendix A represent some of the most documented examples of mobile money and health. Although the mobile money industry is continuing to grow rapidly, use cases in the health sector are limited. This small but promising collection of use cases is expected to expand as evidence that supports the potential benefits of mobile money in the health sector continues to grow.
This publication was produced for review by the United States Agency for International Development. It was prepared by the Health Finance and Governance Project.
November 2013