Experimenting with a Mobile Wallet on a Low-Cost Smartphone

Mar 21, 2016
Tags :
  • Customer Research,
  • Digital Financial Services,

    In recent years, there has been a steady rise in the promotion of mobile wallets as a viable alternative to conventional banking services. Through this innovative channel, MNOs seek to streamline the banking process and increase financial outreach to the wider population, particularly BOP (bottom of the pyramid) customers. Within this context, some providers in the market have recently started offering affordable low-cost smartphones in the hopes of attracting less affluent, unbanked customers, who can benefit from both the device and the mobile wallet channel.


    A team from Karandaaz Pakistan recently carried out an experiment over a 4 week period to test the ability of one of these new low-cost smartphones in reaching Pakistan’s unbanked population, and the usability of the mobile wallet in comparison to the conventional banking system. The experiment aimed to test the phone’s operability and overall mobile money experience for the consumer, examining factors such as the phone’s UI/UX readiness and the wallet’s USSD menu.


    • Buying the Phone: Acquisition was simple and straightforward; the smartphone was purchased at the mobile financial service (MFS) provider’s nearest sales and service center.
    • Cost of the Phone: The phone cost Rs. 6500 and came with an 18-month warranty. Notably, buying a Rs.6500 phone would be staggering for the majority of the Pakistani population, keeping in mind that the minimum wage in Pakistan is Rs. 13,000 a month.
    • Battery Life: The phone’s battery failed to last the entire day, even after disabling the data functionality. This could be problematic for those segments of the population that lack unhindered access to electricity. The phone also switched off sometimes for no apparent reason, although this is a recurring problem with most low cost smartphones.
    • Downloading Applications: Downloading applications on the phone, such as WhatsApp, proved to be tricky as the download process would cause the phone to freeze. If using the social networking apps is posed as the main motivation for purchasing these smartphones, especially for the youth segment, the phone’s performance needs to be enhanced.


    An MFS salesperson helped set up a mobile wallet on the new smartphone at the point of sale, and also gave the team an integrated, limited use ATM card to be utilized only for cash out purposes. The salesperson could benefit from greater training on mobile financial services to increase his awareness about basic mobile wallet functionality including account opening costs and transaction limits.

    Over the 4 week period the team observed that utilizing the mobile wallet on the USSD channel was a fairly straightforward process with an interface that is easy for a literate person to navigate and understand. However, multiple technical glitches and problems with interoperability degraded the consumer experience. Overall lack of trust and understanding of the product, in both the banked and unbanked segments, also limited its application, particularly amongst members of the BOP.

    1) Making Mobile Wallet Payments

    There were multiple setbacks that affected the team’s ability to make mobile wallet payments. This led to a broader question of whether a switch from cash or over-the-counter transactions to mobile wallets is warranted if consumers face difficulties in making payments with a service that is meant to simplify their day-to-day transactions. For example, P2P (person to person) payments are only free between mobile wallets operated by the same providers. Money transfer to other wallets, CNICs or bank accounts is exorbitantly priced. Certain services, such as digital P2G payments, are only accessible via specific providers’ mobile wallets. Utility bills are often difficult to pay as the supplier is not listed on the menu or the service quality is inconsistent. In contrast, a positive aspect of the mobile wallet experience was that users can benefit from discounts of up to 50%, at certain restaurants, cinemas and retail outlets. This is an attractive way to get consumers to open mobile wallet accounts, however, the degree to which this would be applicable for or attractive to BOP customers remains questionable.

    2) Operating the USSD Menu

    In order to utilize the mobile wallet, consumers must correctly navigate and operate the USSD menu. Navigating the menu involves dialing a simple string and selecting from multiple menu options at different stages. Each stage consists of many letters and/or numbers that could possibly prove to be arduous for those possessing low levels of literacy, numeracy and technical proficiency. Due to the multiple stages involved in carrying out a transaction, operating the menu became a little tedious at times. If a mistake was made at a later stage in the process, the procedure had to be restarted entirely by returning to the Main Menu.

    3) Overcoming Distrust and Ensuring Accessibility

    When attempting to make payments to people unused to this channel, the team encountered great apprehension and mistrust about the system in general. In particular, when urban household workers were offered payments via the mobile wallet, they opted for cash instead. When asked why they refused, the individuals stated that they were uncomfortable with the wallet due to their limited experience with digital money. Moreover, they stated that cash payment was found to be easier and more convenient for them, with an underlying belief that any payment through the mobile wallet could easily ‘get lost in the system.’


    Based on the team’s experience, certain measures must be taken to ensure that digitizing money through mobile wallets can effectively increase financial inclusion in Pakistan. First, MNOs must enhance the functionality of their smartphone offerings. This means ensuring that smartphones reliability is not sacrificed at the altar of saving costs. Second, technical glitches within the mobile wallet and its linked products must be resolved, for example by increasing the number of registered companies for payments, lowering transaction costs for money transfers and redesigning the USSD interface. Third, to ensure widespread growth, providers must overcome the inherent distrust of digital money and payments that currently exists by clearly and comprehensively articulating the dynamics of the mobile wallet to BOP customers.



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