Digital Divide 2.0: When Digital Access Doesn’t Translate to Digital Inclusion

The rapid expansion of digital technologies has created an important puzzle: why do individuals with technology access often use it sub-optimally? We examine this question in the context of mobile money in Western Africa. Using novel survey data from ∼ 1200 mobile money users in urban and rural Togo, we identify and quantify behavioral barriers that create persistent gaps between access and usage. We find that only 23% of mobile money account holders use the payment system more than once in a week. Technical frictions (“sludge”) and inefficient learning explains most of this low-usage. The impact is substantial: users of SMS-based interfaces are 33% less likely to transact frequently compared to mobile app users. Inefficient learning about mobile money services reduces the predicted probability to use mobile money services frequently by 5%. Our results suggest that expanding technology access alone may be insufficient for achieving development goals through digital transformation. Instead, carefully designed interventions addressing behavioral barriers are crucial for bridging the access-usage gap.