This blog was written with contributions from Gerry Rasugu.

Several mobile money deployments across multiple regions are choosing to offer companion cards alongside mobile wallets. This is usually a debit or pre-paid card tied to the same source of funds as the mobile money account. A subscriber to one of these deployments can use either her phone or her card to pay for goods in stores, make purchases online, or withdraw cash at ATMs, all funded by her mobile wallet.

This trend is especially popular in Latin America, though more deployments globally are beginning to experiment with the approach. For example, all three mobile money deployments in Brazil offer either a Visa or MasterCard branded companion card. In the last six months, UFone in Pakistan introduced a companion card for UPaisa mobile money users, letting them access 1-Link powered ATMs and Unionpay card acceptance networks. Most recently, EcoCash launched a MasterCard-enabled debit card to allow mobile money customers to pay for goods and services at over ten thousand points locally and 47 million points internationally.

Since companion cards for mobile money are relatively new, little has been documented on the uptake and usage of the card, or upon its effect on customer acquisition. Moreover, each deployment has a unique view as to the role of the physical card within its digital payments strategy, and must also consider market-specific circumstances. Thus, it is too early to assess the overall impact of companion cards on the field of mobile money in general.

However, we can observe from the recent wave of companion card launches that there is a general push to fast-track merchant payments by leveraging existing card acceptance networks. Additionally, there is appeal in offering a form factor that is familiar—and often aspirational—to consumers. Relative to a purely mobile proposition, cards require less customer education on how they can be used.

On the other hand, several mobile money deployments note they have found it costly to issue and distribute cards, as well as to replace lost or stolen cards.  This is particularly true if the cards are EMV-compliant. In part to mitigate these costs, most mobile money schemes offering companion cards charge card-issuance fees ranging from $2 to $6 USD, though frequently customers are offered airtime bonuses or initial e-value to offset the one-time fee.

Moreover, deployments face unique marketing challenges in messaging the dual-channel access that companion cards offer:  a plastic card and a mobile money wallet offer different value propositions for customers, which may have implications for providers’ segmentation strategies and marketing tactics. Though both channels allow storage of value and require cash-in/out mechanisms, the mobile wallet as a form factor is best suited for P2P/remote payments and bill payments—allowing customers to initiate transactions from wherever they may be—while a card is optimized mostly for merchant payments.  Creating awareness and communicating the distinct functionalities of each form factor can be a challenge, especially in markets where mobile money is nascent. 

As MMU continues to gather insights on the early experiences of companion card usage in mobile money, we invite you to contribute to this emerging body of research.  Please send your thoughts on companion cards for mobile money to [email protected].