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Low Adoption in Mobile Money?
Three Ways to Fix It
Amitabh SaxenaManaging Director, Digital DisruptionsMaputo, Mozambique – June 27, 2018
time
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Digital Disruptions January 2018 2
Since 2014, we’ve brought bring best-in-class methodologies, tools, and practices in product innovation to public and private sector clients in the Digital Financial Services (DFS) sector.
DFS CONSULTING CUSTOMIZED DFS RESEARCHPRODUCT INNOVATION TRAINING
Digital Disruptions January 2018 3
Agenda
Understanding Technology Adoption: Framework and Examples
Obstacles to Adoption, and How to Overcome Them
Q&A
A new microfinance institution (MFI) in Africa had begun issuing debit cards, and was keen on launching mobile banking.
So we decided to study debit card behavior to glean some initial insights.
The assumption was that those individuals who already felt comfortable with one form of digital financial services (debit
cards) would be more likely to use another (mobile banking).
Digital DisruptionsJune 2018
Similar to mobile money usage, the number of customers who actively use cards is considerably less than those who request them.
11,550 individual savers
2,174 debit cards requested & issued to branches
933 debit cards picked up at branches
467 debit cards used at least once the last 90 days
(1,243 debit cards remaining at branches)
3,200 are also loan customers
Digital DisruptionsJune 2018
We learned that the typical saver for the microfinance institution was a “female, just under 40, likely married, and an entrepreneur”, the typical innovator for a mobile banking service would likely be a
“single, young male, and more likely to be holding a steady job.”
This segmentation helped determine what the bank told each segment, and how it would do so
Typical product adoption follows an S-curve, with a “tipping” point at the onset.
Cumulative adoption
Relative adoption
Digital DisruptionsJune 2018
While the rate of adoption of new technologies has increased over the last few decades, mass-market adoption still requires at least 10-15 years.
Digital DisruptionsJune 2018
Digital Disruptions January 2018 8
Agenda
Understanding Technology Adoption: Framework and Examples
Obstacles to Adoption, and How to Overcome Them
Q&A
Three big issues causing low mobile money product adoption globally.
Laggards
(16%)
Late Majority
(34%)
Early Majority
(34%)
Early Adopters
(13.5%)
Innovators
(2.5%)
Young (<35), Urban, Literate Educated.
Middle-Aged (35-50), Some Secondary Education, Literate
Middle-Aged (35-50), Some Elementary Education, Basic Literacy
Time of Adoption
Rela
tive A
dop
tion
Product Diffusion of Mobile Money
Middle-Aged Senior (35-60), Little Elem Education, Basic Literacy
Senior (50-60), No Elementary Education, No Literacy
1
2
3
unclear product design
not targeting “enthusiasts”
no targeted marketing or product development by segment
Mobile Money needs to “cross the chasm” to
gain mainstream acceptance
Digital DisruptionsJune 2018
Cu
sto
mer
A
ttri
bu
tes
Mobile money is fundamentally about behavior change, and thus having a clear, simple value proposition for a specific segment is essential.
The “Product-Market” Fit → Value Proposition
CUSTOMER PROFILEVALUE MAP
Digital DisruptionsJune 2018
A strong value proposition provides compelling benefits to the customer in addressing core gains and pains, ideally with a unique selling proposition.
While value propositions should be developed for multiple segments, it’s imperative to define and address the beachhead segment first.
Laggards
(16%)
Late Majority
(34%)
Early Majority
(34%)
Early Adopters
(13.5%)
Innovators
(2.5%)
Young (<35), Urban, Literate Educated.
Middle-Aged (35-50), Some Secondary Education, Literate
Middle-Aged (35-50), Some Elementary Education, Basic Literacy
Time of Adoption
Rela
tive A
dop
tion
Product Diffusion of Mobile Money
Middle-Aged Senior (35-60), Little Elem Education, Basic Literacy
Senior (50-60), No Elementary Education, No Literacy
Digital DisruptionsJune 2018
Cu
sto
mer
A
ttri
bu
tes
The mix of marketing activities needs to address the specific segment’s needs to help “push” the adoption along the curve.
Laggards
(16%)
Late Majority
(34%)
Early Majority
(34%)
Early Adopters
(13.5%)
Innovators
(2.5%)
Young, Educated, Literate, Urban
Middle-Aged (35-50), Some Secondary
Education, Literate, Urban Frequency
Middle-Aged (35-50), Some Elementary Education, Basic
Literacy, Mainly Rural
Time of Adoption
Rela
tive A
doption
Diffusion of Proposed Mobile Money Service
Middle-Aged and Senior (35-60), Little
or No Elementary Education, Basic or No Literacy, Rural
Senior (50-60), No Elementary
Education, No Literacy, Rural
Marketing Levers
Reference Programs
Personalized, pro-active “1:1
education programs
Purchase-Based Rewards
Mass Media “Education”
Threshold-Based Rewards
Promotional Hype
Merchant Discounts
Viral “Education”, human engagement
(See Late Majority)
Mobile Money needs to “cross
the chasm” to gain mainstream acceptance
Buyer behavior heavily influenced by Early Adopters
Customer Attributes
Digital DisruptionsJune 2016 - Confidential
Illustrative
Wizzit in South Africa is one DFS example which was not successful at crossing the chasm.
Digital DisruptionsJune 2016 - Confidential
* CGAP analysis (2006)
After an initial growth of approximately
250K users in 2007 (3 years after
launch), Wizzit was not able to
significantly grow its customer base
and move deeper down the pyramid.
Safaricom has had to continually offer enhancements on its mobile money service to address the particular needs of different adopter segments.
Laggards
(16%)
Late Majority
(34%)
Early Majority
(34%)
Early Adopters
(13.5%)
Innovators
(2.5%)
Rela
tive A
dop
tion
Diffusion of Safaricom Kenya’s M-Pesa with Key Service Enhancements (first 5 years)
Time of Adoption
off-network transfers
utility payments
ATM withdrawals
loan repayments
M-Kesho
Illustrative
2
3
compelling product (big pain: money transfer) with unique selling prop (“send money home”)
beachhead segment: male, urban migrant laborers with family back home in the rural areas
strong marketing incentives as well as tailored products throughout the curve
1
Digital DisruptionsJune 2018
Safaricom’s M-Pesa’s early results showed that early adopters tried out their service.
Digital DisruptionsJune 2018
* M-Pesa had approximately 1.6 million registered users at time of research (Oct 2008)
Digital Disruptions January 2018 16
Agenda
Understanding Technology Adoption: Framework and Examples
Obstacles to Adoption, and How to Overcome Them
Q&A
Washington, DC // Kenya // South Africa // India
+305-433-1060
About The Firm
Digital Disruptions is a global consulting and training firm in digital financial services, with an emphasis on strategy, marketing, and product innovation. It provides advisory services to financial institutions, mobile operators, payment networks, international organizations, technology vendors, governments, and start-ups involved in the intersection of technology and financial services.
Please see www.digital-disruptions.com to learn more how we can help.