Another strong message to come out of the mobile money talks and presentations at Africa.com is that cash is still king in Africa.
In his presentation Brian Richardson from Wizzit brought up the point that despite how much success mobile money might have had in Africa, cash is still 80% of retail.
He suggests that the only real possibility is to aim for a ‘cash less’ society, one where the overall reliance on cash is greatly lessened, as it is not likely we will never fully achieve a ‘cashless’ system.
He also highlighted the six main challenges to the adoption of alternative payment methods:
Regulations – In order to have a mature electronic commerce system there must be an equally mature regulatory system around it.
Technology adoption – Both businesses and consumers must have the necessary technology to access and use an electronic commerse system, be it credit card machines or cell phones.
Education – language barriers, literacy and numeracy are all issues that must be addressed.
Distribution and sales – for any alternative to cash to have any kind of traction it must have an extremely wide distribution network.
Customer support – people need to be taught how to use any new electronic payment system, they must become familiar and comfortable with it if it is ever going to replace cash.
Marketing – people need to know about the alternaives to cash.
Shaibu Haruna from MTN Uganda also made the point during discussions that it is common to see MNOs use Mobile Money as a VAS, where in fact they need to realise that mobile money is actually a completely different product which requires different things to go to market.
While Mobile Money has seen good uptake in services such as airtime top up and P2P money transfers a lot needs to be done to take it further.
It is also important to note that MNOs are finding that it is the high value customers that are seeing the benefit of Mobile Money. Although it was touted as a solution for the unbanked it is the customers who were already banked that are getting the most use out of it, to them it is just another stream by which they can manage their money.
A general agreement that came out of discussions was that while Mobile Money is a great innovation with great potential, just making it available is not enough, you need to not only educate people about the service but convince them that it is better than cash.
There needs to be a lot more education around what mobile money is and how it works. Many people are saying they don’t use it because they don’t know how. Cash has the advantage of being very easy to use and understand. For alternative payment methods to ever become truly ubiquitous you have to overcome the psychological preference for cash.