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| Sanusi, Governor, Central Bank of Nigeria |
As mobile
financial services industry in Nigeria takes shape with limited agency network
to serve as touch points to meet the needs of the subscribers, we will examine
the value adding roles of the agents in the emerging mobile financial ecosystem
in Nigeria. Mobile Money is the use of mobile devices as a means of
authentication to access basic financial services. Currently about 16 providers
are licensed by the Central Bank of Nigeria (CBN).
An agent is an
intermediary that represents the provider that could be a bank or a non-bank to
provide the service to the last mile, the subscribers. They are very critical
to the success of the mobile money scheme because they serve as the touch
points for cash in, cash out, bill processes and other services that the
subscribers will desire to conduct without the need for a physical visit to a
bank branch, which are limited by spread and mostly concentrated in urban
areas.
Mobile Money
successes depend greatly on the availability of these service points as we have
seen with MPESA in Kenya and G-cash in Philippines.
Simple products, simple service
First time agents
are always curious why the bank will want to take their services outside the
secure branch network and place their trust in them as agents to serve their
communities as agents through the use of mobile phones, Point of Sales (PoS)
and other devices. While the agents are willing most times, ability to
understand the service is important to signing up and long term relationships.
In many instances,
store owners that are already positioned and actively selling similar low value
and high volume products, will turn down an opportunity to become an agent due
to poor product knowledge from the agent recruiter, inadequate marketing
information or in some instances absence of agent marketing materials.
It is crucial for
the recruiter to be properly trained while resisting the lame attempt to push
down commission earnable as the only value proposition to potential agents.
Understanding the primary business of the agent will help to unlock the best
approach as we have seen that many potential agents are actually best fit as
merchants and not agents. Resist the attempt to instantly sign up agents.
Develop a relationship and you have a deal.
Avoid round robin visits to agents
Best practices for
agent sign up entails first caller visits to explain the products and if progress
was made, the requirements are made available for review, observation and
comments by potential agents. There is need to resist round robin and
unproductive visits to the agents. Agents have primary businesses and do manage
their time to attend to the demands of their businesses. Where the recruiter
keeps checking on a potential agent without new information, marketing
materials or updates but rather making passing visits which are of no value,
the agents might become disinterested over time.
Every single agent
trip must add value in terms of record keeping checking, new features advice,
branding placement, capacity building, mentoring and monitoring.
Agent commissions
Potential agent’s
main interest in becoming an agent is to earn decent commissions from the
transactions. There are non-transactional earnings like registrations and
transactional revenues from transactions conducted at agent locations. Where
transaction commissions earnable are vague and unclear, agents are not
encouraged to sign up to the scheme. Transparent and sustainable commissions
are the core driver of agency sign up and it is a function of a sustainable
customer transactional fees scheme.
Agent payout
circle must also be clear, transparent and easy.
Know-Your-Agents
Agent requirements
are necessary to enable providers know who the agents are, what they do and how
they are positioned to add value to the scheme. It is very important to have
clear cut requirements that are commensurate with agent categories and
threshold as stipulated by the regulator and practically implementable.
While it is
desirous to have a universal set of requirements for standardization purposes,
it is also critical to have non mandatory requirements depending on community
size, agent location and peculiarities of targeted market.
Some documentation
like utility bill may be farfetched in some semi rural and rural communities.
After thoughts and additional agency documentation requirements, places
additional burden on the agents to seek for these documentations.
Demanding
ambiguous, conflicting and sometimes unnecessary agency documentations
requirements are some of the major barriers of agency sign ups that is
currently faced in the industry.
Agent ratio
Aggressive agency
sign up may be seen as early day’s activities but understanding and measuring
the customer to agent ratio is critical to position the network sustainably. If
agents sign ups quickly outstrip the customer coverage per community, demands
will be highly fragmented across large numbers of agent which will earn very
little for the given numbers of customers.
Signing up agents
aggressively should be adequately balanced with plans to place some in reserve
or waiting list for possible replacement where agents could be dropped for
non-performance, fraud or non-compliance with scheme provider’s provisions.
Agent and customer
ratio might be a small projection in the early days but should increase over
time as agents build capacities, trust and knowledge.
Branding
Selling a mass
driven, low value and high volume product, requires lots of street visibility.
While above the line marketing via television, bill boards, event sponsorships
and newspaper adverts may have their advantages, agent location branding is
extremely useful to promote product, build trust and location visibility.
It is not enough
to have agent identification, service availability posters at agent locations.
These are only educational and promotional materials while inside the agent’s
outlet. They do not announce the service to the passerby from a little distance
away. For a traffic driven service, how will the customers know agent locations
to transact? Strong color schemes and branding are strongly linked to the
successes of selling airtime tops-ups at least in developing world and should also
be adopted for such services as mobile money.
Customers,
therefore, should be able to identify agent locations from a distance with a
colour code that is unique to the brand. While not all agents will agree to
paint their outlets, but most will do if they perceive it will improve traffic
to their outlets for purpose of transacting mobile money, which may also
benefit their primary businesses.
Record keeping
Most businesses
that will ever sign up to become agents did that because they are willing and they
have ability to provide the service. While willingness is a major factor to
watch out for, ability is very key, so agents might be able to provide all the
necessary documentations requirements, fund their e-float accounts but are they
literate enough to record transactions or patient enough to update their record
even if they are literate. No matter how useful an agent is, if record keeping
is poor, such agents must be retrained and monitored and might be dropped if he
or she cannot consistently keep records which might be a regulatory
requirements or record keeping that might be required to manage customer cum agent disputes or for back end
reconciliation purposes.
Support
An efficient back
end support system is the live-blood of an active agency network. In situations
where things do not work as planned due to platform, people and process
failures, agents should be able to reach out via telephony, electronic mail
(email), short messaging service (SMS) or visit to resolve issues. Back-end
support will enable the agent build capacity and trust which are necessary for
the uptake of the service and enable them function at optimal level.
e-float Management
Exchanging cash
for e-money is the most critical aspect of agent functions. Where this is
inefficient, re-balancing cost of the agents might increase significantly and
it may also impact services, which could lead to liquidity challenges and
poor performance of agents. E-float rebalancing should be efficient, easy and
timely. Where agents travel long distances or wait for hours on end after
funding their e-wallets account to receive notification of e-float, can be a
discouragement.
The ability to
fund accounts through multiple channels, like Automated Teller Machine (ATM),
online, agent-to-agent, account-to-agents should be available to ensure that
agents are able to fund their accounts, anytime and anywhere, without even
physically visiting a bank branch which can also be used for e-float funding
channel.
Set up demo centers
Setting up
strategic touch points in well traffic environments for potential agents to
seek information, demo, support and set – up procedures will improve
understanding, interaction and the knowledge of the agents.
These demo centers
might be embedded inside bank premises, gas stations, bus tops and other major
interactions points to serve the needs of the agents. In the early days, it
might be owned by the scheme provider with plans to replicate such structures
nationwide and eventually transfer to third party agent network providers.
- Emmanuel Okoegwale is the principal
associate of MobileMoneyAfrica and a founding partner of IPAY Agent
network. He will be a Judge in the mobile money category at the Global GSMA
event in Barcelona in February 2013.
... Making SENSE of digital revolution!
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