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Background: We examined recent trends in mobile money and branchless banking regulations related to cash-in, cash-out (CICO) networks (physical access points allowing users to exchange physical cash and electronic money) in low- and middle-income countries, and reviewed evidence on the impacts of CICO regulations on markets and financial inclusion. Methods: Regulation and literature searches began in August 2017 and concluded in June 2018. For the regulatory search we compiled an original database of regulations targeting CICO networks in Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania, and Uganda. To review evidence of impacts of regulations we conducted additional global searches on Scopus, Google Scholar, and Google using keywords for specific regulatory approaches (e.g., regulation of CICO agents) or hypothesized impacts (e.g., financial inclusion). Results: The resulting database of CICO regulations in the eight focus countries includes 127 regulatory documents, which we coded for four groups of regulations, namely: Business Channel Requirements; Agent Requirements; Regulations on Caps, Fees and Charges; and Customer Identification Requirements. Early CICO regulations focused on agent selection rules, limits on fees, and know-your-customer requirements. More recent waves of regulation have expanded or restricted services CICO agents provide, and also imposed reporting requirements on service providers in an effort to prevent fraud or enhance financial inclusion. Our search for evidence of impacts of CICO regulations resulted in a sample of 90 documents published since 2005, of which only 31 provided evidence on CICO regulation impacts, with most limited in scope—suggesting rigorous policy analysis remains lacking in this quickly expanding sector. Conclusions: Many low- and middle-income countries have introduced regulations that may affect CICO networks, with regulatory approaches differing across geographies and over time. While anecdotal reports of regulatory impacts exist, we found limited evidence of impacts of regulations on CICO networks or on CICO-related financial inclusion.

Many development policies and programmes are premised on a traditional economic model of rationality to predict how individuals will respond to changes in incentives. Despite the emphasis of these programmes on poverty reduction, economists and the development community in general are still unable to fully understand how the poor make decisions, especially under uncertainty and over time. Individuals avail themselves less than predicted in health programmes, participate less than expected in market opportunities, under or over insure themselves, and make short-run decisions that are inconsistent with their long-run welfare. The rise and fall of different descriptive models and paradigms of poor household behaviour can partly be attributed to this limited understanding. More helpful answers may lay within behavioural economics, that these insights are particularly important for poor populations, and that they can improve the future design, implementation and subsequent effectiveness of development programmes. Behavioural economics is an approach that rigorously combines the insights of psychology and economics to try to better understand and predict human decision making. Empirical evidence is helping us learn, for example, how cognitive limitations, fairness, loss aversion, framing of choices, variable discount rates, and the qualitative dimensions of risk—such as proximity and control—affect decision making. The regularity of many of these anomalies suggests that these behaviours are anomalous only to traditional models, but that they may otherwise be the norm.