Page 63 - State-of-the-Industry-2013

Part 2 - mOBile inSuranCe, Credit and SavinGS

Mobile savings

Traditional mobile money services can be used for savings. indeed, some people will cash-in and store value on their mobile money ac-
count until the point that they need to perform a digital transaction or cash-out. this use case can be quite common in some markets. For
example, CGaP analysed usage of mobile money services in West africa and found that savings was the most popular use case . there is
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customer demand for a mobile-enabled solution allowing people to store and save value in a secure and convenient way. however, tradi-
tional mobile money services do not ofer optimal user experience when it comes to savings and a number of companies have decided to
develop mobile savings solutions (see text box 20).

Customers of mobile savings services can open savings accounts that are distinct from mobile money accounts and which ofer additional
functionalities that are relevant for savings. According to the MMU Deployment Tracker, 22 mobile savings services are live, 9 launched
in 2013. in addition, 7 survey respondents reported they were planning to launch mobile savings within the next twelve months. We fnd
no regional bias; mobile savings services are ofered in all regions. however, there are comparatively fewer services than mobile insurance,
which doesn’t need to rely on the infrastructure of mobile money.

TexT BOx 20
next: mobile savings for the unbankeD*

Mobile money providers are increasingly pondering the path from payments to savings. If people were comfortable keeping higher
e-money balances it would likely increase the activity rate on mobile money transfers, as well as reduce the proportion of transfers
that are converted back into cash – a costly step.

In a paper with Colin Mayer, we describe how savings goals can be defned and managed as a system of deferred payments (com-
mitted today but paid tomorrow). This means that a whole savings edifce can be constructed merely by adding a couple of optional
felds in a standard mobile money transfer user interface: what is the value date for the transaction (default: immediate), and what
is the purpose (an alphanumeric feld or selectable from a standard list of options).

This allows customers to earmark money they receive today to (for instance) send it home when the rent is due, construct their
own sequence of installments to buy a bicycle, or establish a commitment savings pattern to create their bufer against medical
emergencies (deferred payments to self).

All these deferred payments would in efect constitute a system of sub-accounts, allowing a very personalized way for customers to
view and use their account, but all would operate from the single customer mobile money account. Moreover, imagine the possibili-
ties for credit scoring if the provider knew what a customer’s goals were, how intensively they used the commitment payment/sav-
ings feature, and how regularly they contributed to these.

Because savings is mainly delayed expenditures, the savings service experience is a logical extension of the payments experience.
Savings are about adding a time dimension to basic money transfers. Presenting savings opportunities as deferred payments has
the advantage of reminding people more directly of why they are saving at all.

*This text box was adapted from blog post by Ignacio Mas, published on the MMU website on September 7, 2011

35. CGaP, “usage Behaviors of Customers of a mobile money Service in West africa” (may 2013), available at: http://www.slideshare.net/CGaP/usage-behaviors-of-customers-of-a-mobile-money-service-in-west-africa
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