This is the second of four blogs aimed at understanding the causes of low user activity rates in the mobile money industry and potential strategies on how to improve mobile money activity. The previous blog looked at barriers to active account usage. This blog explores mobile money account activation strategies. The next blog will focus on successful customer activation strategies in comparable and adjacent industries.
Tackling low mobile money activity rates in a market requires two important initial steps: diagnosing the causes for low or no usage, and designing and implementing strategies that can address the identified issue. In this blog, we assess some of the past strategies implemented by mobile money providers that have successfully led to more active mobile money use – at least by a subset of their subscribers. For this purpose, we use existing GSMA and external sources, as well as insights from recent interviews with MTN MoMo (Ghana) and Telenor Bank’s Easypaisa (Pakistan).
Customer training and reactivation campaigns
Customer training campaigns are often run alongside new mobile money service launches, but also form part of account re-activation initiatives. Previous GSMA research and recent interviews reveal that, in several markets, initial efforts from providers mostly focused on registering accounts, and less on educating customers and encouraging usage. In multiple markets, this approach was successful in growing the account base, but not in driving cash-ins and active use. Whether using cash-in/cash-out (CICO) or dedicated field agents to re-engage users, three factors should be considered:
- Training: Ensure agents are well trained and regularly updated through refresher courses, to train and onboard customers adequately (for instance, the GSMA’s MISTT toolkit can be used and adapted to train both users and agents on training methods). Broader digital financial literacy training may be necessary (see next section for more insights on agent training).
- Incentives: Agents should be incentivised to register new customers, but also to support them in making their first transactions. Progressive commissions can also be encouraged, whereby agent commissions rise as users carry out successive transactions over a given period.
- Oversight: Monitor agents to ensure they perform their roles adequately, both as trainers or CICO agents. This can be achieved physically, through field visits, and technology-enabled solutions. For example, investing in dashboards to monitor commercial or compliance-related metrics can achieve positive results (e.g. Optimetriks’ partnership with Airtel Uganda to monitor the field operations of 80 agents).
Case study: MTN MoMo (Ghana)
In one of the most successful mobile money markets today, MTN MoMo Ghana initially signed up many customers through aggressive acquisition campaigns, leveraging a network of agents who were remunerated based on the number of accounts they helped open. While this was efficient in driving account ownership, activity rates remained low, making it necessary to improve customer education on mobile money, and adjust incentives to increase active use. As a result, MTN introduced a new commission structure for its training agents that were dependent on the completion of not just one, but multiple transactions by account owners. With strategies such as this one, MTN increased its 90-day active customer base from 3.5 million in 2016 to over 14 million in 2022.
Case study: Telenor Bank’s Easypaisa (Pakistan)
Easypaisa has 26 million registered users but only 11 million of them transact monthly. Every month, Easypaisa contacts its inactive and less-active users via SMS, in-app messages, and e-mails, aimed at re-incentivising usage. Separate research is also conducted from time to time to collect responses from inactive users on reasons for their lack of usage. Feedback from Easypaisa suggests that this approach has been much more efficient than simply sending out a blanket SMS to all customers, which many users tend to ignore (or even block).
Low uptake may often be related to accessibility, both in terms of a lack of knowledge or skill, or physical access to well-trained CICO agents. Increasing usage among mobile money account owners with low literacy levels or inadequate ability to use mobile money can be partially achieved by improving user interfaces. For example, rapidly growing access to smartphones provides mobile money providers with the opportunity to simplify usage through well-designed apps, making transactions easier to perform, and access to other services more seamless, compared to the USSD or SIM Toolkit channels (see CGAP, 2016). Biometric solutions can also help tackle low literacy contexts. For example, the GSMA’s Biometrics for All solution, which uses voice, face and fingerprint recognition, could contribute to closing the usage gap.
Low activity can also be related to a scarce CICO agent footprint, as well as their substandard quality in some instances, for example, due to a lack of agent training upon onboarding, or challenges with liquidity management. These can be overcome by adjusting agent management processes in multiple ways (basing our main insights on our Distribution 2.0 report):
- Agent onboarding processes can be optimised through the use of data and technology, including by using geolocation or transactional data to assess high-demand areas, or digitising contracts. For example, in 2015, mobile money providers in Mali and Chad analysed telco call and mobile money transactional data against key macroeconomic attributes to locate areas with high transactions.
- Enhancing agent training, as seen earlier. This can be made more efficient, for example, by using e-learning. E.g. In Bangladesh, Grameenphone creates short tutorial videos for agents and partners on various topics.
- Liquidity management, perhaps one of the greatest challenges agents face in several markets, can be improved through means such as predictive analytics or float delivery services.
Restoring trust or avoiding a negative experience
Based on our 2022 Consumer Survey, some users may have stopped using mobile money despite having an account, due to a negative experience that might have dampened their trust in the system. Such incidents could be fraud-related (e.g., phishing or malicious SMSs) or related to sub-optimal service levels (e.g., network downtime or poor agent service). Potential strategies to restore trust include:
- Introducing cybersecurity measures to recognise and block fraud attempts (the GSMA Mobile Money programme has multiple resources on the general topic of security, such as Guidelines on mobile money data protection and cybersecurity).
- Driving consumer awareness of potential fraud methods, and reminding users to keep their PIN private.
- Improving user interface and experience, by reducing bugs and minimising downtime to the lowest level possible.
- Supporting and training agents, as seen earlier, and ensuring oversight and regular touchpoints (for example, through mystery shopping). Adequate support on float management can improve agent liquidity and therefore reliability.
Case study: Telenor Bank’s Easypaisa (Pakistan)
In a competitive market like Pakistan, mobile money users can switch to an alternative system or revert to cash if they face any kind of issue, such as downtime, bugs, fraud, and so on. As a result, Easypaisa sees this as the most important reason why some account owners may stop using their service at any given point. To overcome this, Easypaisa heavily invests in reducing downtime to the lowest possible level, smoothening the customer journey, as well as improving the security of its system. In 2023, Easypaisa’s main user engagement strategy will focus on improving the quality of its existing core offering.
Diversifying use cases
Low usage levels may occasionally be related to the availability of alternatives, such as bank accounts, competing mobile money services or over-the-counter (OTC) money transfers. Apart from communicating the benefits of mobile money, providers can improve service utility by widening their value proposition beyond P2P and CICO transfers. Offering and promoting merchant and bill payments, bulk disbursements and international remittances could result in more engagement, provided users are educated on their usage and benefits.
An outward-looking, ecosystem-centric approach may also be necessary: actively onboarding merchants and billers – including within government agencies; partnering with organisations for salary payments and social and humanitarian cash transfers; and partnering with banks and international remittance hubs.
Furthermore, diversification can involve the launch of credit, savings, investments or insurance products, often in partnership with financial institutions. In some instances, demand for such services may be more important than for core use cases, and can consequently drive active use.
Case study: MTN MoMo (Ghana)
Based on their feedback, MTN Ghana’s success and high customer engagement can in part be attributed to the extensive range of services they have on offer, fitting the needs of the widest possible types of customer segments. Achieved through partnerships with insurance companies, pension houses or 19 out of Ghana’s 23 commercial banks, this strategy had an additional positive externality: to advance its products and services, MTN Ghana’s partners were incentivised to promote mobile money use among new and inactive mobile money users.
Combined with customer reactivation and awareness campaigns, these approaches may boost the use of specific use cases for specific needs, and potentially result in the uptake of other types of mobile money services.
If you’d like to learn more about the barriers to regular mobile money use, check out the first blog in this series here.