Driving Scale and Density of Agent Networks in Perú

This brief describes the relationship among various network design choices adopted by agent networks in Perú and the impact of these choices on their overall capacity to reach poor and sparsely populated areas. It is based on an analysis of five agent networks comprising more than 26,000 agents with 24 million monthly transactions. The brief identifies three network design choices where agent managers use different approaches: aggregation of services, simplicity of transactions, and lightweight network operating model. It also extracts high-level insights for providers and regulators outside Perú. Key highlights include:

• Regulatory compliance costs that increase the number of transactions needed to make an agent viable reduces the network’s ability to operate agents in areas with a more dispersed population;
• Defining different service levels across tiers within a network can help operators address specific local needs and can help regulators identify areas where differentiated requirements may make agents viable;
• Cashy transactions enable rural agents to increase the potential transactional pool in areas with low traffic;
• Agent networks that establish exclusive relationships with service providers can have a negative impact on potential for growth;
• Third-party agent networks that aggregate similar mobile money services offer an alternative solution to non-interoperable services.