Removing the Pain from Using Cash: An M-banking Solution?

MicroSave's India Focus Note No. 52 investigates the cost of cash for low-income clients and provides insights into how an organization may apply the findings in an electronic or mobile banking (e- or m-banking) scenario. It states that understanding customer pain points and the value that can be created by offering new, improved services is important for mobile money providers to deliver the right services to the right customers at the right price. Study findings helped mChek to design its go-to-market strategy, pricing, marketing, and customer education for low income customers.

The study revealed that key financial transactions for urban and rural customers were utility bills, hospital, food, education, festivals, and travel. Findings include:

• Risk of carrying cash was the most painful cost for all transactions;
• Time spent and opportunity cost were the next most painful;
• Festival, agriculture, hospital, food, travel, and insurance expenses were moderate to high pain transactions in rural areas due to distances, and the cumulative amount of cash involved;
• Transactions such as utility payments were low pain transactions often because of doorstep collection by bill collectors;
• Alternative to cash could lead to high adoption for financial transactions that had moderate-to-high pain points.