This blog post is the fourth in a ten part series of articles covering the 10 Lessons Learned about Using Mobile Money to Promote Financial Inclusion.
When you are dealing with people’s funds, having rapid, reliable, and convenient access to their money when and where they need it is very important. This includes relying on mobile money systems that are easy for anyone to access and use as well as the need to have an extensive and properly managed agent network for easy cash-in and cash-out services. In addition, it is becoming increasingly important to interconnect with other platforms such as linking mobile money wallets to bank accounts, debit/ATM cards, as well as allowing cardless ATM withdrawals.
Easy to Use Menus
I still remember the basic SMS system we used when we first started making use of mobile money services back in 2005. The original menu for GCASH was an SMS-based system where we had to train clients and provide detailed step-by-step guides which included remembering quite a few numbers and codes to facilitate mobile money transactions. Very quickly, Globe shifted to using a SIM Toolkit (STK) menu. This was more secure than SMS-based transactions where the MPIN was clearly visible on the mobile phone and stored in the sent message folder. However, downloading an STK menu over-the-air (OTA) had its own difficulties. In several countries, STK menus are already burned into the SIM card and this makes it easier for people to use. Utilizing STK menus and riding on top of the GCASH mobile money platform allowed the USAID support RBAP MABS program to help rural banks to facilitate access to a range of basic banking services. However, clients still needed to input quite a bit of information into the optional message field to facilitate transactions and this was not easy for clients to remember. The other problem with STK menus is the fact that they are fairly static. In order to add another feature or biller to an STK menu, customers need to update their STK menu via an OTA download. This again is difficult as OTA updates quite often failed due to network issues and had to be attempted several times in order to ensure the update was successfully downloaded.
Over time, Globe GCASH as well as many other mobile money operators (MMOs) have shifted to offering a better range of menu interfaces that have made it much easier and convenient for clients to access and make use of a broader range of mobile money-enabled services. Unstructured Supplementary Service Data (USSD) menus are now much more common and can be used across all mobile phone handsets. There are now several good examples such as Stanbic Bank’s Mobile Money Service,
bKash, and BPI Globe BanKO’s mobile money-enabled banking services. Another nice feature of USSD menus is that they can be changed at any time and updated as new services or billers are added without requiring the customer to download a new menu. USSD menus, however, suffer in rural markets where mobile network coverage is not that stable but this should change over time as the signal strength continues to improve. For smartphone users, many MMOs now also provide applications that make using mobile money easier than in the past since the user does not need to remember a lot of numbers to input since biller account information can easily be stored for the next transaction. While I really like the smartphone applications for GCASH, I have also experienced some good examples in Nigeria as well with banks such as First Bank’s Firstmonie service, Guaranty Trust Bank, and eTranzact’s PocketMoni to name just a few of the MMOs now offering easier-to-access applications for a full range of customers.
In several markets including places like Afghanistan, India, and Nigeria, we are also beginning to see the offering of Interactive Voice Response (IVR) technology, which allows those who are not literate to be talked through their transactions.
Simplified Registration Process
For convenient and easier access to mobile money, the entire process of registering for the mobile money service must also be quick, fast, and easy. Ideally, MMOs should not charge for registering for their mobile money service and the subscriber should be able to use it in minutes and not have to wait to activate the service. I like the fact that, in Nigeria, there is a tiered Know Your Customer (KYC) process where users can register via their own mobile phone handset and start using the service immediately for small value transactions without having to go to the bank or an agent for an extensive KYC interview. The reason this is allowed in Nigeria and a few other markets is that there is already a standard KYC process for all those who purchase a SIM card. This initial KYC process is relied on for remote registrations that only require the client to enter their name, address and birthday for transactions of up to N3,000 ($19.50) per transaction and up to N30,000 ($195.00) per day.
Online Systems
As MMOs broaden the number of business that clients can pay for goods and services via mobile money, they need to invest in and offer online access systems that provide transaction details and information in real time. This is also important for governments and businesses that want to utilize mobile money systems for payroll services or disbursements. As the number of clients who can make use of mobile money services expand, there will also be a growing demand on the client side to access their transaction histories and, therefore, online systems will be essential to meet their needs as well.
Extensive Agent Network
One of the most important aspects of providing convenient and accessible mobile money services is an extensive agent network. As the introduction to the GSMA Mobile Money for the Unbanked series of articles on agent networks correctly points out, “The network serves as the customer’s bridge between cash and e-money; it represents the human face of a service, and the vehicle for boosting product awareness, customer education and registration.”
The timing of rolling out agent networks is crucial as well. If an MMO rolls out their agent network too slowly then there are not enough cash-in and cash-out locations to support the client base and they will not be interested in using the service. If, on the other hand, the MMO rolls out their agent network too quickly and there is not enough active mobile money subscribers, the agents will soon either forget how to facilitate transactions or lose interest in offering the service. Therefore, it is best to ensure the agent network can be rolled out carefully and strategically. In many markets, mobile money agents are often larger businesses that handle other services, usually airtime load distribution. Mobile money cash-in and cash-out services can then be handled as another service by the same personnel who handle airtime load distribution services.
As I noted in my posting about a mobile money agent handling services for multiple MMOs, I do believe that in several markets it is useful to allow sharing of mobile money agents, especially from the perspective of the agent. Forcing exclusivity, while potentially useful in the short-term from the perspective of the MMO, is often not a very good deal for the agent or the customer. In most markets, the airtime agents already offer services for all mobile network operators and do not see an issue with handling services for multiple MMOs. Likewise, bill payment centers often provide payment facilities even for competing banks at the same window, so allowing agents to handle mobile money cash-in and cash-out services for multiple MMOs actually makes sense. In several markets, we also see the rise of super agents who can manage agent networks for several MMOs which ultimately can bring down the cost and time involved in building a network for one MMO. This is actually one of the reasons why mobile money services in Bangladesh is growing so quickly as well.
Interconnection with Banks and Other Channels
To offer real financial inclusion services beyond mere person-to-person money transfer services, integration or convergence with other payment platforms, ATM networks, and banks will be essential in most markets. I continue to see attempts at getting larger establishments, often large department or grocery store chains to accept mobile money payments. This often involves connecting a mobile money-based payment service directly with the backend of the department store’s existing payment service or having cashiers take out a mobile phone to complete a transaction. Since these establishments already accept local and international debit cards and have the systems in place for card-based transactions, it still makes sense at this point of time to interconnect with a local or international debit card provider as Smart Money had done with MasterCard in the Philippines and which GCASH is now doing with Megalink. In addition, the new service by GCASH and American Express to offer a virtual American Express card linked to the mobile money wallet is helping Filipinos to make purchases online especially micro-purchases in app stores. Visa is also offering linked mobile money debit cards in several markets. In countries with extensive ATM networks, MMOs should also offer a jointly linked debit/ATM card and/or cardless ATM withdrawals such as those that PesaPoint has offered in Kenya since 2008.
Again, if we want to see real financial inclusion, then mobile money wallets will need to be linked to bank accounts where a client can receive credit in the form of mobile money or save in an account that does not have transaction limits and ultimately can earn interest.
Related:
10 Lessons Learned about Using Mobile Money to Promote Financial Inclusion
Lesson #1 Using Mobile Money to Promote Financial Inclusion: Develop a Road Map
Lesson #3: Using Mobile Money to Promote Financial Inclusion: Focus on Building Trust
Digital Financial Services for Development 
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This is an excellent article. Thanks for sharing. I agree that customer experience is paramount for the success of a strategy. You have covered the important enablers to an excellent customer experience – the UI, the ecosystem and the service. Thanks for sharing.
On a parallel note, since you have ended on the wallet, what is your opinion on influence of the mobile wallet on financial inclusion? My studies show some very diverse views on how wallets have been used to significant advantage in financial inclusion apart from mobile money. It will be good to know how you perceive this space.
Sanjay, thank you for your comments. Standard mobile money platforms are a good way to transfer funds but when linked to payments systems and especially banks and other financial players, they can be powerful tools to promote financial inclusion.
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