Accounting for the importance of airtime top-ups in mobile money around the world
The Mobile Money for the Unbanked,
Date Posted: Monday, June 04, 2012
As part of the 2011 Global mobile money Adoption Survey, we collected transaction data from participating service providers. This allows us to get a feel for how customers are using mobile money to date. The following chart breaks down the four kinds of functional transactions that many mobile money services offer by the frequency with which customers of the 51 services in our sample made use of them in June 2011. (It excludes transactions like cash-ins and cash-outs because we think of these as being means to an end—the end being one of the four functional transactions.)
The relative importance of airtime purchases was one of the most surprising results of the survey. After all, what’s innovative about mobile money is the fact that it allows customers to make payments (usually p2p or bill payments) more easily, not that it gives them a way to buy airtime: the traditional airtime distribution channel is one of the modern wonders of the world in terms of pervasiveness and efficiency. So why are customers using mobile money to buy airtime so frequently?
Sometimes, this behaviour emerges organically. As customers start to use mobile money for payments, they find it increasingly convenient to top up from their account, too.
Frequently, however, operators encourage customers to top up using mobile money by offering incentives, like bonus minutes, to do so. Operators employing this tactic hope that airtime top-up is a gateway to usage of the other mobile money products. The idea is that if you can get a customer comfortable topping up using mobile money, then they will be more likely to start sending money, paying bills, and so on.
Unfortunately, our data suggests that this approach doesn’t usually work. Operators in our sample with a high proportion of airtime top-ups in their product mix at the start of 2011 tended to see lower growth in the volume of payment transactions over the first half of the year than those with a lower proportion of airtime top-ups in their mix. That is, it did not appear that incentivising airtime top ups was, as a rule, leading to the adoption of other services.