Whenever a mobile money deployment announces customer numbers, the first question people typically ask is ‘yes, but how many of those customers are active’? It’s a fair question. Active user rates vary across deployments and have an enormous impact on profitability. Analysis of different markets has revealed three broad challenges that deployments face when it comes to active rates. The first two challenges involve persuading customers to perform an acceptable number of transactions. If these challenges aren’t quickly and adequately addressed, they spawn a third, equally troublesome challenge: out of practice, unsatisfied agents.

So how are deployments addressing these challenges? Let’s consider each individually.

1. “Customers are registering, but they aren’t performing any initial transactions”

Customers that are inactive immediately after registration are a double-edged sword to an income statement: they don’t contribute to revenue, and they’ve typically already cost a deployment in the form of registration commissions, license fees, and other variable costs. But some creative solutions have been trialled to target this problem.

South Africa’s WIZZIT have tasked their WIZZ Kids with tackling this problem, and at the core of their approach is a well-designed incentivize strategy. WIZZ Kids receive a commission for simply registering a customer, but now also have the opportunity to earn an annuity tied to customer use. That is, the WIZZ Kid who registered a customer earns a commission each time that customer uses WIZZIT to buy airtime on the system (as long as that WIZZ Kid is similarly active). This approach encourages WIZZ Kids to spend a few extra minutes properly educating customers and following up personally – for example, a phone call to make sure everything’s okay. Simple follow-up calls have improved active rates in other markets, so this will likely work in South Africa.

A different approach that’s being used in Indonesia is loading a registration incentive into the customer’s e-wallet. Thus, to access the bonus (say, free minutes), the customer needs to perform a mobile money transaction. Though potentially costly, in theory this is an effective way to get customers comfortable using the service.

2. “Our base is active, but customers still only perform a couple transactions per month”

Even customers who do emerge from the treacherous early days to become ‘active users’ of mobile money still seldom use the service more than a couple times per month. For many deployments, particularly those oriented around money transfer or bill payments, this is a function of the value proposition and aligns with strategy. But this usage behaviour does create a churn risk that merits attention. That is, in many cases customers will use the service so infrequently that it takes several months for them to become fully proficient or committed. Designing processes and user interfaces to be simple can help address this problem, but as WING in Cambodia have observed, sometimes there are added elements of complexity. Their USSD menu is only available in English, but Cambodians are typically much more comfortable with Khmer. Thus, a customer who uses the service only once per month to perform a money transfer may see unfamiliar prompts in English and be daunted by the need to continuously retrain themselves – in a foreign language. WING has addressed this challenge by distributing ‘transaction guide’ cards in their starter kits (picture below). Written in Khmer, the cards clearly detail the steps involved in performing each type of transaction. Since offering these cards, the activity rates for WING customers have improved.

3. “Our agents aren’t being provided with enough transaction volume”

What happens if registered customers don’t become active users? Or when the average active user only transacts once per month? It’s important to consider these questions from the perspective of the agent – who at this point could be fairly lonely. Will the average agent spend their valuable downtime reviewing procedures and educating themselves? Not likely. One of two things will happen: they’ll deliver second rate customer experiences, or will stop offering mobile money altogether. There are some core principals involved in addressing this problem, like ensuring the service is designed to deliver an adequate volume of transactions for agents once scale is achieved. But in the meantime, how can early stage deployments survive the perilous initial days of low transaction volumes?

True Money in Thailand made the decision to equip each of their 8,000 True Money Express agents with a starter kit. Among other things, the kit has a laminated flip chart that provides a step-by-step visual flow to help agents understand how to perform each potential transaction (picture below). This tool is designed to help agents who may initially only serve a few customers per month recall key processes and transaction procedures. Clearly this approach is expensive, but it can be conceptualized as an investment designed to reduce agent churn and improve customer experience.

Another approach commonly seen is partnering with an MFI to access sparsely populated rural areas in which agents are likely to see fewer initial transactions. In the absence of strong control over their airtime resellers, mobile operators may face agent churn risks if volumes don’t quickly materialize. In other words, we can only expect the average airtime reseller to be patient for so long before giving up. In theory, partnering with an MFI can deliver mobile operators a) commitment from a partner willing to invest in growth and ‘stick it out’, and b) access to relatively high calibre frontline staff to ensure customers get critical positive first experiences with mobile money through the early low-volume days. SMART Money has used this approach in the context of their MMU-supported Island Activations Initiative.