Transaction Cost Index (TCI)

Costs are a leading driver of take-up and usage of digital financial services (DFS), yet little work has been done to measure these costs systematically. The Transaction Cost Index (TCI) seeks to fill this gap by systematically measuring the costs of using mobile money. We consider a broad definition of cost, inclusive of official fees and taxes, informal extra fees charged by agents, and non-pecuniary costs such as the opportunity cost of time wasted on failed transactions and exposure to consumer protection risks. Data was collected in two rounds. We conducted two activities: 1) Desk work: we systematically scraped official price lists from leading mobile money providers across 16 countries. We additionally collected information on tax treatment of mobile money transactions and regulations related to mobile money pricing. We additionally measured the ease of accessing providers’ pricing information 2) Fieldwork: to measure costs beyond official fees, in our first year, we tested three approaches to measuring the true cost of making mobile money transactions with agents, including overcharging and non-monetary costs. In our second year, we additionally modified our data collection approach based on lessons learned in the first year of work, focusing on only one approach. This work was conducted in Bangladesh, Tanzania, and Uganda.