Financial services firm Visa has carried out a study of the mobile money deployments in six emerging markets to find out how providers can generate high registration rates as well as high active usage in their target markets.

The good news for banks is that the study found that they are in the race with the mobile network operators, contrary to popular belief. “At least as many banks as MNOs are taking mobile money services to consumers – and that’s an exciting evolution for the mobile industry,” said Gavin Krugel, head of emerging market customer strategy and market activation at Visa, who led the research.

“The number of mobile money deployments under bank brands is fascinating to see, which says to me that the banks are responding and consumers with small amounts of funds can create revenue for them. It is an important way for us to identify which consumers need more sophisticated financial services and can be lifted from being unbanked to banked in quite a sophisticated fashion,” he said.

Visa analysed the financial services needs and expectations of mobile money consumers, mobile money agents, and merchants in Bangladesh, Ghana, India, Indonesia, Nigeria and Pakistan with Fundamo, its subsidiary mobile money platform. The study found that the key barrier facing mobile money providers is their ability to understand the local vernacular to market their services effectively – as typified by a surprising approach to savings.

The unbanked don't save - they store money for a purpose

“Interestingly, what the research told us is that across all of the six markets, consumers do not save and do not have an appetite for saving money,” said Krugel. “However, when we went into detail, it was fascinating to find that the consumers do actually have sophisticated behaviour when it comes to savings, they just don’t call them ‘savings’.”

He said that consumers in emerging market perceive the idea of saving money as being for the wealthy, rather than for the unbanked. However, these consumers do store money for a purpose, such as for their children’s education, healthcare or simply for a rainy day. They often have multiple fund storage places hidden in their houses, each for its own purpose and usually know the amount they have stored in each of those “accounts”.

This was also the case in the payment space, Krugel added. “When we spoke to consumers about the ability to make bill payments, the response was that we don’t really do bill payments, because we’re not wealthy enough to have bills to pay. But I do pay for electricity and I do pay for water that comes to the house and I do pay the council a specific amount and I do pay rent and I do pay school fees – so the vernacular is not around bill payments, it is around paying certain fees.”

The results of the study suggest that fine tuning how a mobile money operator markets its service can have an impact on consumers’ desire to adopt such a service. Visa advises mobile money providers to invest in additional research to better understand their customers’ needs, tailor information, education and marketing efforts to the needs of consumers and mobile money agents, and adopt local terminology.

“It’s not what you say, it’s how you say it’,” added Krugel. “As an industry we’ve taken too generic of an approach in terms of the service offering. This has massive implications for the vernacular used in mobile money menu structures, the education of mobile money agents and consumers, and creation of mass market advertising.”

The study also revealed that ease of use was listed by 64% of respondents as the biggest barrier to adoption. Consumers, merchants, and agents alike also cited the importance of offering a clear pricing structure as a key need of a mobile money programme.

Lack of interoperability was another barrier to adoption, according to 28% of respondents. Krugel cited this as an important issue for the industry and advised operators to start moving towards an interoperable mobile money environment in the future.

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