The Mobile Money for the Unbanked,
Date Posted: Tuesday, July 10, 2012
Econet, Zimbabwe’s leading mobile network operator, launched its “Ecocash” mobile money offering just 8 months ago, and has raced to over 1.5 million registered customers since.
Zimbabwe’s mobile telephony sector is booming; penetration has accelerated over the last six years and is now around 77%, up from just 6% in 2006. Mobile money has also been gaining popularity in the country – possibly due to loss of confidence in the banking system by Zimbabweans and a booming informal sector in the country. Since switching to the US dollar in 2009, there has been a huge shortage of change (quite literally, dimes and nickels), making transactions that are not exact multiples of a dollar rather troublesome. Mobile money promises to solve the change problem by allowing precise payments to coin-starved retailers.
Innovative marketing investments to drive growth
Econet has leveraged its lion’s share of the market, a substantial investment in mobile money, and some innovative marketing tactics to rapidly sign up 1.5 million mobile money customers. Kombis (public mini-buses) carrying Ecocash advertising all over Harare and other urban centres contribute immensely to Econet’s brand awareness. Rural customers are targeted through radio talk shows, which are far more popular than print and electronic media in those areas. Ecocash’s agent network is motivated to register customers that are likely to be active, as agents receive a commission – currently $1.00 – whenever a customer who registers with them makes cumulative transactions that reach $50.00.
From its total subscriber base of 6.4m users, Ecocash claim to have 270,000 active mobile money customers – that is, 4.2% of their total GSM base – eight months in. This sits neatly between the average rates of 2.6% (six months after launch) and 5.6% (twelve months after launch) for the eight Sprinters in the survey. Additionally, Ecocash has 1400 agents across Zimbabwe, representing a healthy 193 active customers per agent – keeping pace with the Sprinters (161 active customers per agent) and far exceeding the average of 37 for the rest of the industry. Like industry leaders in other countries, Ecocash has grasped the importance of focussing transactions amongst a concentrated, motivated agent force.
Francis Matseketsa, the head of Ecocash, told MMU that Econet is looking at its mobile money platform as a strategic business, rather than simply another product in its portfolio, and the growth outlined above seems to justify this approach. Furthermore, Ecocash believes that its primary economic driver will be cost savings on airtime distribution, as transaction revenue alone has not yet pushed the service to breakeven. It is expected that, as the volume of business increases with transaction usage, customer services fees will be lowered further. In line with this strategy, Ecocash offers a 5% discount on airtime purchased with Ecocash – a promotion that has proved very popular with customers.
We at MMU are excited to watch Ecocash grow, especially as it looks to expand further into business services, such as bulk payments, salaries and merchant transactions.
 Total number of connections (9.7m, from Wireless Intelligence, Q1 2012) divided by the population (12.52m), and thus does not take into account multi-SIM customers
 Same methodology as footnote above, for Q1 2006