People have been sending and receiving money across borders for generations, and today’s digital age has enabled Money Transfer Operators (MTOs) to transform and enhance their operations to offer a faster, cheaper and more effective way of sending money. But in a burgeoning market which is quickly becoming flooded with new digital players, it’s crucial for MTOs to adapt and evolve to maintain a degree of differentiation to not only capture new audiences, but also to create loyal users.
Across emerging markets, mobile phone penetration has become widespread with over 5 billion mobile phones in use. Pre-paid phones are prevalent (in comparison to post-paid) resulting in the majority purchasing airtime top-ups as and when required in various incremental amounts. In these markets, with more than two billion people unbanked, the use of bank accounts is limited so people opt to operate digital wallets to receive funds as a means of maintaining their financial independence. Therefore, airtime and mobile data become key elements to supplement their phones. Moreover, if people need to receive money, they also need mobile airtime, opening up new opportunities for MTOs to add value to their traditional services and grow recognition and popularity:
1. Expanding product offering and differentiation
Mobile airtime has become extremely useful across emerging markets, with people purchasing top-ups not only for themselves, but for their loved ones and peers, too. This is because airtime is considered as high value in developing countries. The art of sending mobile airtime offers a low cost, yet valuable personal gift, as amounts sent are typically below US$20, and with 60-80% recurring users sending up to 4 transactions per month, this engagement is unparalleled. MTOs can also scale their network reach through utilising the existing retail infrastructure of airtime resellers which is a further cost advantage.
Therefore, airtime is a very suitable cross-sell product for MTOs, tapping into the remarkable pool of prepaid mobile phones worldwide to increase their business reach and generate further revenues by offering the ability to make micro remittances, which is more practical for end users who tend to be migrant workers who wish to send small amounts – an ideal method to give back to family at home.
2. Incentive marketing
An additional use for mobile airtime is as a marketing tool, particularly for incentive marketing campaigns. The merit of airtime in emerging markets is now evident and MTOs should leverage upon this to develop brand awareness and drive consumer engagement. Using airtime incentives for promotions is an appropriate and powerful approach for customer acquisition or to reward customer loyalty, encouraging customers to try or keep using their money transfer services.
For MTOs serving the emerging markets, it would be logical to use mobile airtime as a helping hand to promote their core business. As airtime is a digital inventory, very little effort is required to manage stock, and administering top-ups or incentives only requires one piece of information: a mobile phone number. For the end users, the rewards are received instantly on their mobile phones in their local currency and can be used immediately, making a top-up even more of a useful bonus.