Vodafone M-Pesa: Cash in hand

With the increasing adoption of technology by banks as well as its customers, electronic payment modes have gained ground. Besides credit cards and debit cards, there has been a rise in multiple mobile payment products that present an alternative mode of cash transfer.

Money order

Vodafone completed the rollout (in all the 22 circles it operates in) of the service in March 2014, exactly a year after M-Pesa was launched in association with ICICI Bank. Only Vodafone subscribers - they don't have to be ICICI Bank account holders - can access M-Pesa service. Vodafone M-Pesa claims to empower the unbanked and under-banked sections of the population gain access to financial services via the mobile phone.

Pesa is Swahili for money and it, coincidentally, sounds like paisa. Vodafone launched this service in 2007 in Kenya where it became wildly popular with migrants working in big towns wanting to transfer money back to their villages easily. It later went on to encompass other services too as Vodafone went on to retain and grow its customer base in a highly competitive environment.

According to Rajiv Rao, national creative director, Ogilvy India, the brief from the brand was to position Vodafone M-Pesa as a fast, safe and easy way of transferring money. "The consumer for M-Pesa works away from home in big cites and sends money to remote places across the country. Sending money in the conventional way can be a painstakingly slow process or even unreliable. We took this insight and showed them a new way of doing the same," Rao says.

An official Vodafone note says, "We summarised the product benefits of M-Pesa under one campaign idea. It's as good as handing over the money yourself. The campaign explores various relationships where transfer of money takes place to highlight that M-pesa is as quick, safe and convenient."

Deep wallets...

Vodafone claims that the service now covers 1.1 million customers. Using their M-Pesa account, customers can deposit and withdraw cash from designated outlets, transfer money to any mobile phone in India, remit money to any bank account in India, make payments to recharge the mobile phone, clear utility bills and for DTH service subscription.

M-pesa works on any mobile handset and one does not need GPRS or a data plan. The user needs to register for this service by paying Rs 200 and there are charges for each M-Pesa transaction. All that the subscriber needs to do after registering is to follow the steps spelt out to carry out the transaction.

Sixty five per cent of M-Pesa's 1.1 million customers are in the rural areas. M-Pesa has joined hands with the Mahatma Gandhi National Rural Employment Guarantee Act (MG-NREGA) in Odisha to provide mobile-based wage payments for NREGA workers. It has also partnered with the NHRM (National Rural Health Management) project in Bihar and Jharkhand to promote health care in the rural belts.

M-Pesa has also tied up with the TABCab service in Mumbai to empower institutional cash management, instant and easy cash management among its 1,400 fleet cabs and consumers. Political parties too have found it useful. The Bharatiya Janata Party and Aam Aadmi Party use the platform to accept donations.

Wallet shares

Competition for Vodafone comes - or will come - from players such as Airtel, Tata DOCOMO and Idea Cellular. Earlier this year, Airtel rolled out an integrated campaign to promote its mobile wallet service, Airtel Money (in association with ICICI Bank).

Tata DOCOMO has a licence through its wholly owned subsidiary, MMP Mobi Wallet Payment Systems, and has partnered with ICICI Bank for mRupee money transfer and payment services. Last December, the telco had stated plans to extend the service to 26 Indian cities by March 2015.

Idea Cellular received a five-year prepaid mobile wallet license just six months ago. This will enable it to create stored-value cards (physical or digital), which can then be used to purchase products from multiple vendors.

The Internet and Mobile Association of India (IAMAI) predicts that the digital payments industry (credit/debit card transactions, net banking and those using mobile wallet) in India is expected to grow by 40 per cent to reach Rs 1.2 lakh crore by the end of 2014. The study - conducted in collaboration with the Payments Council of India (PCI) and IMRB - put the size of the digital payments industry in India at Rs 85,800 crore in December 2013.

Easy?

With competition looming and so much room for growth for everyone, it becomes imperative for Vodafone to get its product positioning and branding right so as to reap maximum results. Now, that it has a start, will the ad campaign help Vodafone attain an upper hand?

"The visual for a common man is quite misleading since both the people are shown talking on the same road and money is handed over physically. People will never be able to understand how the service functions. Actually, the TVC might give people a feeling that this service is only to be used during emergency," he states.

According to Sukhija, the mobile wallet as a concept looks very promising on paper and there is a need across different sections of the society. However, people need to be educated as to how this concept works and that it is easy to use.

"The elderly, for example," he says, "can be convinced by showing the application as a new form of money order. Parents can be educated that they can instantly transfer money to their children staying in hostels. Professionals can be educated that this is the easiest way of transferring money to their parents who are staying in another city. The numbers will take time to grow and one has to show patience," explains Sukhija.

So, will this TVC help Vodafone get ahead of competition? Sukhija does not think so. "Only a minor percentage of the population is using this service. The market potential is much bigger. The one who invests in educating the people about the advantages of using this service will move ahead," he reasons.