M-money service providers should encourage a more active usage of basic m-money services to grow revenues

Comment by Stela Bokun, Manager at Analysys Mason

ü  Most registered m-money customers in emerging markets do not use the service actively. Those that do, typically use only basic services, such as peer-to-peer m-money transfer and airtime top-up.

ü  Despite this, operators that offer these services continue to expand their portfolios with more advanced mobile financial services, such as merchant payments, bill payments and micro-loans. Some operators are even considering partnering with OTT players to include a social element into their m-money offerings in emerging markets. These next-generation services typically see poor adoption levels and they rarely generate much revenue for the operators.

ü  We believe that operators can expect more revenue growth to come from converting a significant proportion of registered m-money customers into active users of basic services than from further diversification of operators' m-money service portfolios. Operators can convert registered m-money customers into active users by investing in improved access and customer experience at the agent level.

ü  Some operators have seen relatively high adoption levels among unbanked customers in emerging markets. However, on average only about 30% of registered m money customers are active users.

ü  There are a number of ways for operators to increase m-money usage levels; improving access to the service and improving user experience are among the most obvious and should take priority over launching innovative services that are targeting niche user groups.

v  Building the agent network in rural areas would make the service accessible to those that may benefit from it the most and result in increased usage.

v  Training m-money agents to provide better customer experience and encourage usage among first-time customers would result in more active users too.

LINK to complete thought leadership article: http://www.analysysmason.com/About-Us/News/Insight/M-money-services-Feb2015/