One of the secrets to getting mobile money subscribers to become active users is getting them on a mobile money-enabled payroll. We learned this early on in the Philippines when we saw how much more active those receiving part or all of their payroll via mobile money were as compared to the average registered mobile money subscriber. We also learned that payroll alone was not enough to encourage mobile money subscribers to become active users. This also required some good immediate and easy-to-understand use cases and value propositions that encouraged them to not only use their mobile money wallets but also to save in their accounts.
Mobile Money-Enabled Payroll
Two weeks ago, I covered the story of a nanny (Donna) and a maid (Nora) in the Philippines who opened up mobile money-enabled bank accounts at BPI Globe BanKO’s (BanKO). As I mentioned in that article, their employer has agreed to pay them their salaries directly into their mobile money accounts at BanKO. What happened over the past two weeks with these two women is an interesting example of what I have seen develop over time with others receiving salaries via mobile money.
Prior to opening up their mobile money payroll accounts, Donna and Nora had heard about mobile money and Donna had tried using GCASH a couple of times but found it too difficult to cash-in to her account so she rarely used it. Nora also found it too challenging to even take the time to learn about mobile money. However, once their salaries were paid directly via mobile money, the story changed completely. They no longer had to take time to cash-in money to their mobile money wallets since it was now being paid (deposited) directly into their accounts. In addition, since there were some very real value propositions and use cases that motivated them to actually use their mobile money accounts as well as save money, they immediately became active users and savers at the same time.
Several years ago, I witnessed that the first rural bank employees to receive salary via mobile money often cashed out their salaries immediately, just like they would do if they were paid by check. I remember doing the same thing when I started working and receiving my salary by check 25 years ago. However, things began to change when I was paid via direct deposit and received an ATM card and later a debit/ATM card. Not only did I have more options to pay for things with my direct deposit account but I was also encouraged to save more as well. Linking a mobile money wallet to a bank account as well as offering and educating clients about relevant use cases helps to promote active mobile money users.
Mobile Money Use Cases
In the case of Donna and Nora, the various use cases in using mobile money are now much better promoted than they were in the past. This is the case in the way that BPI Globe BanKO was able to quickly teach both women during their orientation at account opening. They quickly realized that they could more easily load or top-up their mobile phones directly from their mobile money-enabled accounts and earn a significant rebate. In addition, they no longer had to take time off from work or travel to a money transfer company to send money to their families as they could do it from their phones either on payday or at any other time they needed to send money. These two use cases are probably the most common regular transactions where mobile money can offer a substantial value proposition. On their wish list would be adding money and paying into their Social Security Service (SSS) and paying into their Philippine Health Insurance (PhilHealth), services hopefully planned for the near future. Also, BPI Globe BanKO’s interest rate of 3% on savings accounts over P2,000 ($50) or the alternative option of an account with a 1% interest rate and life insurance up to 5 times their average daily balance for all accounts over P2,000, were significant factors enough to encourage both ladies to save much more money than they had in the past when they were paid in cash.
New Active Mobile Money Users
For these two women, both having their mobile money-enabled payroll and easy-to-understand value-added use cases made a substantial difference in encouraging them to become fairly regular users of mobile money in a very short timeframe. Another interesting fact from both the bank’s and mobile network operator’s perspective is the increase in purchases of airtime (as opposed to other purchases) that both women made over the past two weeks. Because they learned that they would earn a 10% rebate every time they purchased airtime directly from their mobile money accounts and the fact that they now had available funds in their accounts, it was now much easier to purchase airtime for themselves and other family members than in the past. Since the bank and the mobile network operator offered a significant rebate for purchasing airtime, both women viewed making these purchases much the same way someone would view getting cash back for using a particular credit/debit card. In addition, they also viewed airtime load as being “on sale” via mobile money which in fact incentivized them to buy additional minutes just like others do when they see a sale. Also, since the rebate is paid back in the form of mobile money rather than being offered as a discount or in the form of additional airtime minutes or load, they were encouraged to make use of their rebate to make another mobile money purchase since they now had more money again in their account. In this case, Donna and Nora almost doubling their airtime purchases using the new mobile money accounts.
Once this same approach was taken with rural bank employees getting their salaries via mobile money, we also observed a similar dramatic increase in mobile money transactions and airtime purchases. What was different this time around though was that instead of cashing out a larger portion of their salaries, as I had seen in the past with a pure mobile money wallet, these two women instead opted to save their money since their mobile money accounts were in fact bank accounts that earned interest and had other benefits such as insurance. So even though both of them were spending more money on airtime purchases, they were avoiding other temptations and actually saving more money.
This is actually where bank-led or joint bank-mobile network operator-led mobile money providers have a unique advantage. It is also useful to point out why getting money into a mobile money account regularly is so important to do. In fact, more mobile money providers, especially those led by a bank or where a bank is a partner, should actively support and make it as easy as possible to get employers to pay their employees via mobile money accounts. These services should be as easy or easier to use than traditional bank payroll services, especially when the mobile money operator or their partner bank can make the overall package more attractive than a regular payroll service.
For both Nora and Donna, they quickly learned to navigate the easy-to-use USSD BanKO menu to load airtime and send money to others. Both made four airtime purchases of P100 ($2.50) each over the past two weeks and Nora sent P1,500 ($37.50) to a relative nearby while Donna plans to send money to her mother in the province soon. Compared to other mobile money users in the Philippines who handle 1-2 transactions a month, these two women were processing at least 2 mobile money transactions a week. They also saved approximately 25% of their salaries, something that they had not done before.
In the coming months, I will track their progress and maintain financial diaries for these two new active mobile money users and share lessons from their experiences. I will also share my own experiences using mobile money and how my patterns have changed over time from primarily small purchases of airtime loading and sending money seven years ago to transitioning to a more diverse set of larger mobile money-enabled financial services that included transacting with my bank and paying more bills. I hope these useful insights will provide valuable lessons for mobile money providers in other markets as well.