This is the fourth and final instalment in the series 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 focused on successful customer activation strategies in other industries. This blog summarises findings from the previous three blogs and issues recommendations.
While there are now 1.35 billion mobile money accounts globally, only 26% (346 million) are active on a monthly basis. As a result, hundreds of millions of individuals globally are not yet reaping the full benefits of financial inclusion, along with the suite of use cases enabled by mobile money adoption. The GSMA’s Mobile Money programme has explored possible reasons behind low account activity rates through a series of blogs, including:
- The potential causes for low activity through our annual GSMA Consumer Survey conducted in certain countries,
- Solutions tested by mobile money providers and proven to boost account activity, and
- Approaches tested in other industries to ensure customer retention and the active use of their products or services.
This blog, the final instalment in the series, summarises findings from the prior three blogs and offers recommendations for mobile money providers.
Train customers and communicate effectively with them
According to the 2021 GSMA Consumer Survey, some of the reasons why registered mobile money users may be using their accounts infrequently are linked to self-perceived knowledge and skill limitations, but also potential misconceptions about mobile money. For example, 33% of respondents in Pakistan who claim to have a mobile money account quoted their inability to use the service as a reason for not using it in the last 30 days. Moreover, 41% of respondents in India said this was due to their limited ability to use a phone, and 27% of respondents in Senegal quoted their limited ability to read or write. Additionally, many account holders believe that mobile money may not be useful to them due to a lack of money, or due to transaction fees, as well as a general preference for cash. These barriers are explored in greater detail in our first blog in this series.
The scale of such barriers suggests a need for greater focus on education on mobile money use, beyond awareness efforts and registration campaigns. This includes training or re-training customers on the use of specific mobile money services, as well as the use of a phone, but also on the benefits of mobile money. Such initiatives have been conducted by mobile money providers, using both cash-in/cash-out agents and field staff.
To ensure that customer training has an impact on activity rates, trainers themselves need to be adequately trained, monitored and incentivised. For example, our second blog explains how MTN MoMo in Ghana raised usage levels by running campaigns where agents were incentivised through a new commission structure. Through this approach, the trainers’ commissions became dependent on the completion of not just one, but multiple transactions by the mobile money users they trained.
Why access still matters
Access refers both to the ability to reach CICO agents and to one’s ability to use mobile money services as they currently exist. Mobile money can benefit rural and remote populations, for whom reliance on cash can mean longer travel times to pay or receive money and concerns around transacting safely. However, these populations are less likely to be close to an agent, or nearby agents may not have sufficient liquidity to perform more than a few cash-out transactions. For example, inadequate access to agents was cited as a reason for low or no account activity among 22% of mobile money account owners in Senegal and liquidity challenges were cited by 23% of agents in Pakistan.
Our previous work on distribution suggests that this can be partially overcome by improving agent onboarding, for example by using geolocation or transactional data to identify high-demand areas and shift agent recruitment efforts to those regions. Enhancing agent training (e.g., through e-learning) or agent liquidity, through the use of predictive analytics, can be effective too.
Activity rates can also be boosted if underprivileged populations can be helped in overcoming barriers such as low literacy, or other knowledge and skill-related barriers. Indeed, difficulties using a handset or mobile money account, as well as insufficient literacy levels were cited as reasons for low or no account activity among respondents to the 2021 GSMA Consumer survey. Moreover, some potential users, such as women, may feel unsafe using an account.
These barriers could partially be addressed by making mobile money interfaces as accessible as possible by improving user interfaces to be more inclusive. Growing smartphone ownership rates across the world, especially in Sub-Saharan Africa, offer providers the opportunity to alter their interfaces. Biometric solutions to improve both access for people with disabilities and improve safety can increase the number of active mobile money users. Lastly, gender tokenisation can incentivise more women to use mobile money.
Improving trust and safety can increase customer confidence
The 2021 GSMA Consumer survey has shown that the perception of safety can contribute to a lack of mobile money usage among existing account owners. For example, safety and trust concerns were listed as reasons for low use by 25% of respondents in Egypt, 20% in Pakistan and 18% in Bangladesh. Mobile money is perceived to be a safer alternative to cash: it is not uncommon to find that cash may sometimes be rejected for payment due to the risk of theft. Based on feedback from providers, other negative experiences such as bugs and downtime can contribute to account inactivity too.
Providers can overcome this challenge in multiple ways. Introducing cybersecurity measures, improving customer awareness of fraudulent behaviour, and investing in reducing downtime and bugs can help keep accounts active upon registration, and potentially bring dormant accounts back online. As an example, Telenor Bank’s Easypaisa will mainly focus its user engagement strategy in 2023 on improving the quality of its existing core offering, with a view to improving user experience and trust to grow engagement and usage levels.
Data-driven safety approaches seen both within the mobile money sector and other industries should be considered too, including the use of machine-learning models, alternative data sources (e.g., geospatial data, phone usage), or automation. Such approaches have already been adopted in the mobile money industry, such as GCash’s use of Alipay’s Alpharisk solution.
Diversifying use cases can offer customers more value
At times, mobile money may not appeal to account owners, due to a perceived lack of need or the infrequent use of existing use cases (e.g., for social and humanitarian cash transfers or international money transfers which may not occur frequently). One tested solution to boost usage, as demonstrated by MTN Ghana, is to widen the range of products and services beyond person-to-person transfers and CICO services, to make them useful and relevant to the widest possible audience. Ensuring a compelling value proposition, through more types of payments and financial services, could not only make these new use cases relevant to more users but also boost the use of core services as network effects kick in thanks to wider adoption.
Providers should base any diversification on customer feedback and analytics, by understanding users’ behaviour through surveys and transactional data. As demonstrated in other industries, mass experimentation and hyper-personalisation could help mobile money providers keep their users engaged. Though not strictly considered diversification, gamification can be used to maintain retention and activity. Making routine activities game-like can make them more interesting or enjoyable. Gamification can be adapted in mobile money interfaces – especially smartphone-enabled ones – for example by creating entertaining ways to set and track budgets or savings targets.
All the approaches considered throughout this blog series can be effective in growing mobile money activity rates, and therefore financial inclusion. However, each strategy should always be tailored to the specific country, demographic, and regional contexts – mindful of the different user segments at the core of each. Better timing and targeting through data analytics should be considered throughout engagement efforts. Targeting account owners as they become inactive or less active, for example by using predictive analytics for churn prediction, may prove more efficient.
For these ideas to lead to increased activity rates, mobile money providers should spearhead any initiative. Other relevant issues such as education, infrastructure and regulation, may fall under the responsibility of stakeholders such as governments. Ideally, a multi-stakeholder approach should be pursued to ensure that mobile money usage increases and remains beneficial to users.
If you’d like to learn more about the barriers to regular mobile money use, check out the first blog, the second blog, and the third blog in this series.