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In this comprehensive analysis, CGAP assessed whether branchless banking or mobile money services are more cost effective or cheaper for low income people than formal banking. The authors, McKay and Pickens, compared pricing of 16 leading branchless banking services across eight ways that customers use branchless banking. They subsequently compared the pricing of these services against 10 formal banks and other informal money transfers options.

The eight use cases refer to: 1) sending money transfer, 2) receiving money transfer, 3)short-term safekeeping, 4) medium term savings, 5) bill payments, 6) high usage, 7) m-PESA customer, and 8) kenya bank customer.

The results say that branchless banking is 19% cheaper than banks, and have a lower transaction value. Additionally, branchless banking is 54% cheaper than informal options formoney transfer.They also discuss in detail how pricing influences customer usage.

The growing importance of mobile telephony for users at the bottom of the pyramid is reflected in the high proportion of their incomes devoted to this service. Evidence from communities in the developing world, where low-income users have developed strategies to minimize costs while continuing to benefit from access to communication, has opened new lines of research. Based on a survey of 1,000 mobile telephony users carried out in 2007, the present study assesses the strategies practiced by mobile users in two metropolitan areas of Mexico.

The results show that the main short-term strategies to minimize the costs of mobile telephony are 1) using the phone only to receive calls, and 2) the use of SMS. In both cases, the main determinant of whether users at the bottom of the pyramid use cost-reduction strategies is their low economic status.