Thursday, March 24, 2011

T-Cash town? Food aid and mobile money in Saint Marc

Marie sits with a group of other women outside a small vendor in Saint Marc, Voilá mobile phone in hand. They are waiting to spend the 1600 gourdes (US$40) that Mercy Corps just sent to their T-Cash accounts. As heads of households with IDPs (internally displaced persons) from the earthquake, they are among 5,000 recipients in Saint Marc who will receive money on their phones to buy rice, oil, beans, and cornflour from fifty small, local merchants. Our host for the day, Andrew Lucas, explains to us that this is a much more dignified way of distributing aid than MINUSTAH-guarded blind giveaways, and we wholeheartedly agree. Mercy Corps in Saint Marc are doing their best to make sure that their donations go to people who are most in need, and that their program is conducted with as much benefit to small businesses as possible.

Food aid recipients such as Marie seem to be using their mobile money without too much trouble. Mercy Corps help recipients register for T-Cash, give them a mobile phone, help the recipient activate their phone, train them to make payments using their mobile accounts, give them printed instructions, and visit vendors to make sure everything is running smoothly. Mercy Corps also employ volunteers to assist vendors and aid recipients during the transactions. Vendors are also happy: they are moving a lot more stock and making more money. Technical problems that crop up are worth the extra profit. Mercy Corps monitor prices in the town and encourage customers to seek out the lowest prices, as they normally would.
What's interesting to us is the overall mobile money landscape in Saint Marc. Thus far, Digicel's TchoTcho Mobile has no presence in the town, and Mercy Corps / Voilá have big plans for the next few months that will integrate an interesting range of players into their program. In April and May, Mercy Corps and the Red Cross will run a market once per week in which 2,500 of the current recipients will be given a one-off payment of US$250 to spend on materials to build or renovate their homes, or to pay school fees (including technical/trade school). Later on, half of these recipients will be selected for a third time to spend a further US$250 on tools for small enterprises.
This approach–of targeting customers, merchants, agents, and billers simultaneously–is a promising solution to mobile banking's 'chicken-and-egg' problem of providing enough users for agents, and enough agents for users. It the potential to achieve a critical mass of users that will secure mobile money's future in Saint Marc, so long as the transition from food aid to a publicly available service is handled correctly. At the moment, there is no fully-functioning T-Cash outlet in Saint Marc. Indeed, having functioning agents goes against Mercy Corps's mission, because it would allow beneficiaries to cash out the money they have been given rather than spend it on food. But future users of mobile banking in Saint Marc will need to be given the entire service if their town is to link up with users across the country–and these connections are essential to the future success of mobile banking in Haiti.
Who will become T-Cash agents? At the moment, many of the businesses accepting food aid payments are displaying T-Cash signs and banners but are not actually agents. This is problematic because there is a risk of losing customers' confidence, should they try to use a service and find that it is not working. At the moment these merchants can accept payments for food aid and nothing else; their customers cannot cash in or cash out, nor can their other customers who are not aid recipients pay for food. Furthermore, most of these vendors are not eligible to become T-Cash agents because they are not registered businesses. Mercy Corps is working to train them in business skills and help them register their businesses.
We are optimistic that Saint Marc can successfully transition to be a true T-Cash town. But we recommend the following: that Mercy Corps and T-Cash keep a critical eye on their joint operation to ensure that there is no conflict of interest; that they work closely with customers, merchants and agents in Saint Marc to ensure the development of a publicly available service rather than a closed aid program; and that they encourage link-up between different agents around the country. We also encourage TchoTcho Mobile to establish a strong presence in Saint Marc, in order to ensure that mobile banking in Haiti is competitive and prices stay low. Resolving the chicken-and-egg problem is not just about achieving a balance between users and agents; it is also about ensuring that different chickens are laying the eggs, and that the eggs can be transferred from one basket to another.

--Erin B. Taylor

--Photo #1: Women waiting to buy Mercy Corps food using T-Cash. Photo by Erin B. Taylor.
--Photo #2: Merchants filling out paperwork for food aid purchases. Photo by Erin B. Taylor.
--Photo #3:Food aid beneficiaries waiting in line at a merchant, phones in hand. Photo by Erin B. Taylor.
--Photo #4: Small Mercy Corps affiliated merchant in Saint Marc. Photo by Erin B. Taylor.

Monday, March 14, 2011

Not all agents are created equal

The uptake and success of mobile money in Haiti will be affected by user experience at mobile money agents. While users should have similar experiences wherever they choose to use mobile money, we have found that their experiences vary depending upon what kind of agent they use. The centrality of the agent to the success of mobile money means that we cannot take the word “agent” for granted.

Who is the mobile money agent? In Haiti, businesses providing a mobile money service have a sign on the front of their shop identifying them as an “Agent Authorisé” (authorized agent). The business has gone through the training provided by the mobile money operator and is able to carry out the different transactions involved. However not all agents are created equal. Our research has found several types of agents.
In the ideal model, the small business owner is always the one who carries out the mobile money transactions. Not only is the owner always present at their place of business, but the commission represents an incentive for the business owner to promote the service. This is the case of Andy, the owner of a cyber café. He is the most successful among the agents that we have interviewed. Because he stands to gain from registering new clients, Andy says that he tries to turn as many of his regular clients into mobile money users as he can.
Unlike Andy who is the owner and representative, there are agents that are placed into stores by another company, which has multiple outlets and places its agents in different businesses. While these employees have an incentive to promote mobile money because their employment status depends on the continuing success of mobile money, the fact that they are not fully integrated in the businesses where they are placed means lack of consistency in the provision of service. Cases when these agents are absent and those in the store cannot tell the client when they will come back means that one cannot always expect service at some locations even when they are the closest to one’s house or place of business.
Some mobile money agents are additions to already existing money transfer businesses. Voila’s T-Cash outlets are currently located in UniTransfer offices. The placement of the mobile money at the UniTransfer office is not without problems. Because there is only one line for money transfers and mobile money, T-Cash customers face the same amount of time waiting in line that existed prior to mobile money. Furthermore, mobile banking customers are more likely to be robbed using transfer houses than other kinds of businesses that are not associated with withdrawing cash. Long lines and the potential security risk associated with walking out of a mobile money outlet will discourage customers.
The most common, yet problematic, “agent” scenario is the one where the business owner decides to sign up for mobile money and designate just one of their existing employees as the mobile money agent. For these employees, serving as the mobile money “agents” is an addition to their schedule of duty and is not necessarily accompanied by an increase in salary. Not only do these employees lack the incentives of business owners but the fact that providing mobile money services is one of the many things they have to do means that they may not have enough time to provide all the information a client may need.
Benjamin, a computer programmer at a cyber café represents one of those “agents” whose work load was increased by the addition of mobile money service at his outlet. On the one hand, he is one of the most enthusiastic agents we have met because he is a true believer in the product and its promise. However, he is also a bit discouraged because as he said: “I am working for the mobile money operator but I do not feel that I am benefiting from them.” According to Benjamin, the agents are not the only ones who suffer. Clients do not receive the kind of attention they deserve, especially for a service that is so new and that involves their money. He explains, “When someone comes and are about to give them their money you have to spend all the time they need and answer all of their questions in order for them to trust you with their money.” Given that the target of mobile money are unbanked people for whom every penny counts, their ability to trust their agents is crucial to their adoption of mobile money. If clients cannot count on their agents being there or the agent has to rush off to serve other customers potential mobile money clients will think twice before adopting mobile money.
As mobile money providers are looking to expand their agent networks in Haiti, they need to be aware of the fact that while the businesses owners have an incentive to become mobile money agents because of the commission and the added traffic that mobile money brings, the way they set up service provision will affect customer experience and return business.
--Espelencia Baptiste

--Photo #1: Digicel TchoTcho sign. Photo credit Espelencia Baptiste, 2011
--Photo #2: TchoTcho user and client. Photo credit Espelencia Baptiste, 2011
--Photo #3: Unitransfer T-Cash sign. Photo credit: Espelencia Baptiste, 2011
--Photo #4: T-Cash user. Erin B. Taylor, 2011