Dionne Nickerson and I started thinking critically about the mobile payments industry in Africa when it is was becoming clear that, far from M-Pesa moving out of Kenya and snowballing through the rest of the continent, other countries were seeing much slower growth. The snowball was not doing well in the sub-Saharan sun. We eventually outlined a research project that hoped to isolate several of the characteristics of mobile payments adoption, and then to compare and contrast them across different markets.
Our goals for the study were two-fold: 1) to test a previously well accepted model of technology diffusion in an emerging payments environment, and, if applicable, 2) to use that model to suggest how players in the mobile payments ecosystem, including suppliers and regulators, can more effectively spur end-user adoption. If, as we suspected, product does not differ greatly across markets, then end-user perceptions were likely to be a limiting constraint. The good thing about that is that, while truly new product innovations are hard to come by, changing perceptions is, relatively at least, much easier.
We chose Tanzania for the comparison because of geographic proximity to Kenya, substantial cross-border movement of people and ideas, and the similar length of time that mobile payments had been available. Now Kenyans and Tanzanians, as well as those knowledgeable in the area, will argue that economic and cultural differences are significant and we would heartily agree. But by isolating and modeling the drivers of mobile usage we hoped to provide evidence across the markets. In addition, we chose to study microentrepreneurs because they are such a huge driver of economic growth in Africa. If the payment system is contributing to the success of these small businesses, then governments, NGOs, etc should be taking positive steps to promote and enhance these systems.
Our research provided ample evidence that mobile payments users were the more successful. It also showed that large differences in attitudes between the two countries likely contribute to the rate of adoption. Changing these attitudes is paramount.
When Professor Fred Davis first studied email in the late 1980’s, he found that most of the variation in people’s adoption of email depended on how useful it would be and how easy it would be to learn. This simple model has become more sophisticated over time as more complex conditions were studied, but ease of use and usefulness remain the opening stakes that must be present for real end-user growth.
In Tanzania, microentrepreneursare are much less convinced that either of these “necessary conditions” exists. Tanzanians are nearly twice as likely to report that mobile payments are complicated and are 10 times more likely to disagree that mobile payments are easy to learn.
Importantly, we identified a new dimension in the adoption model that strongly related to adoption. Kenyans are firmly convinced that mobile payments increase safety due to less need to collect and hold cash. Tanzanians are three times less likely to view mobile payments as safe, a result that is likely intensified by their lower levels of trust for those in the supply chain (MNOs and agents).
The upside of these findings is that they represent perceptions (or potentially misperceptions) that can be changed with proper positioning, communication and consumer education. Our belief, which is supported by the data, is that building the technology is simply a part of a multi-step process. Until suppliers are willing to invest substantially in this part of the build-out (and we have specific idea how this would work), they will see their investment not snowballing but melting away.
For a white paper that provides for a more detailed analysis of the findings contact: email@example.com
By Dan Horne, Chief Knowledge Officer, Gx
About the author – Dan Horne (PhD, University of Michigan), is the Chief Knowledge Officer at Gx and a marketing professor at Providence College in Rhode Island, USA where he teaches consumer research. For the last twenty years he has researched consumers’ acceptance and use of new payment technology. His client list includes major organizations and governments around the globe. Contact him at: firstname.lastname@example.org
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