M-PESA, Airtel Money or Orange Money? This is why BoP customers choose one rather than the other

September 18, 2012 | Mobile Money | Global | Guest Blogger

On the drivers of adoption in competitive markets

This blog post was written by Tonny Omwansa, co-author of Money, Real Quick: The story of M-Pesa.

The GSMA recently published the results from its Global Mobile Money Adoption Survey, documenting the degree of adoption of mobile money for the unbanked services across the world. The 52 participants to the survey together reported over 60 million registered users as of April 2012. However, a much smaller number of customers were active and only 8 deployments had been experiencing a quick customer uptake. This report provides evidence that supply side factors such as a supportive regulation, a large GSM base, and a high of investment can contribute to the rapid growth of these services. However, not much information is available in the public domain about drivers of adoption and usage from the customer perspective. In this blog post, I present some results from a survey about the adoption drivers for customers at Base of the Pyramid (BoP).

I recently conducted a survey of 283 mobile money users from 8 poor areas around Nairobi, in Kenya. The customers surveyed were users of M-Pesa, Airtel Money or Orange Money. The research objective was to create a model to explain adoption of the mobile money among the BoP population. This model would be used to predict adoption of products that are yet to be deployed or evaluate the success of mobile money products that are in operation. Secondarily, the study was to establish the most important factors considered by the un-banked in choosing a mobile money product. Seven constructs were theorized and operationalised to either cause Behavioural Intention or Actual Use of mobile money.

“I can’t sign up for a money transfer product if I can’t see an agent nearby!”

According to the respondents, facilitating conditions was the single most important factor they would consider when signing up for a mobile money service. Transaction Cost, Social Influence, Perceived Trust and Performance Expectancy were then the most cited factors (in decreasing order of significance).

“I can’t sign up for a money transfer product if I can’t see an agent nearby!”, says Onyango from Huruma Estate in Nairobi. In another area, Kimathi argues “I do my business here in Dagoreti all day long. What I don’t want is to move around agent shops looking for float. That wastes time.” Facilitating Conditions is the degree to which an individual believes that an organizational and technical infrastructure exists to support use of a system [1]. In the context of mobile money it would refer to aspects like easy access to the agent network, confidence in the knowledge of how mobile money works, presence of the network coverage, reliable customer support and availability of liquidity/float. The users want to be assured that whenever they need to transact, nothing will come on their way to frustrate the process.

The fact that the facilitating conditions were ranked as most important speaks volumes about the BoP’s need for support and assurance. These consumers are not technologically savvy; they are likely to have a low level of financial literacy, be un-banked, have irregular or low income and have little or no access to formal savings channels. In their vulnerability, they trust the mobile money provider to ‘keep/manage’ their money. But they want to want to be ‘close enough’ to their money. The closeness comes in form of facilitating conditions.

What lessons can MNOs draw from this research?

The results of this study have significant implications for mobile operators. Given the large investment in developing and deploying mobile money products, a good understanding of the drivers of adoption is useful so as to make the organizations prioritize their resources appropriately.

Since facilitating conditions turned out to be the most important construct determining usage of mobile money among the poor, management must put systems in place to support the use of their mobile money products.

Users, particularly at the BoP, care a lot about supporting services around their money:

  • they want to know about the processes and how to use the products;
  • they want to be sure they can get help and technical support if and when needed;
  • they want a reliable access to the mobile network at anytime and anywhere;
  • they want to be sure that their mobile money agent has enough liquidity for cash-in-cash-out services.

Reliable and responsive customer support services, strategic positioning of agents, customer education around product features, availability of liquidity, and marketing around each of these aspects are examples of what mobile money managers can focus on.

In a nutshell, as mobile money products are being rolled out all over the world, thinking about what determines adoption and usage is key. The research provides a basis for investigating what could make a new mobile money service attractive from a consumer point of view. In addition, for products that are already in the market, the research informs what parameters to further investigate with the intention of strengthening the product and improving adoption.

The full results from this research project are to be published in December 2012. Feel free to post comments below if you have questions on the methodology or the interpretation of the results.

[1]  See: Venkatesh, V., Morris, M. G., Davis, G. B. & Davis, F. D., 2003. User acceptance of Information Technology: toward a unified view. MIS QuarterlY, Vol. 17(3).

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