Building a network of mobile money agents
- 1. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators Building a Network of Mobile Money Agents Authors: Neil Davidson and Paul Leishman
- 2. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators Building a Network of Mobile Money Agents This is the first section of a handbook on agent networks developed by the GSMA. Also part of the handbook are sections on incentives for agents and ongoing management of the network, and an article on agent network regulation will accompany the report. The complete handbook can be found at http://www.mmublog.org/agent-networks. Introduction homogeneity. That is, while the logo may be painted In this article, we explore the key issues facing on each agent’s storefront in a slightly different operators as they build agent networks to support way, every M-PESA agent has the same set of their mobile money platforms. For easy navigability, responsibilities and authority and adheres to the we’ve structured the article as a series of questions, same set of guidelines. with responses that draw on the experiences of operators around the world. For many questions, This approach works well for three reasons. First, it’s not yet possible to indicate best practices with agent uniformity is easy for customers to understand. certainty, particularly since ‘best practice’ will likely When a customer sees an M-PESA sign, they correctly vary by market on account of features unique to each assume that they can perform any type of transaction country. Still, we strive to provide a clear analysis of there. Likewise, because every agent displays the the merits and drawbacks of various approaches. exact same M-PESA tariff card with a simple pricing model, customers can easily understand how the We begin by defining the roles that operators assign service works and what they should be paying for to agents and how these roles vary across (and each type of transaction. Second, the consistent sometimes even within) markets; we consider the customer experience delivered by the uniform optimal size of an agent network, both at launch and M-PESA agent helps foster trust – particularly for thereafter; and we discuss what operators should customers that are new to formal financial services. require from agents and on what basis they should And third, integrating the responsibilities of customer select them. We then take a close look at some of registration and cash-in / cash-out makes it easy the processes that need to be in place to build the for customers to start transacting on the platform network: systems for recruiting agents, processing immediately after signing up. applications, and training new agents. Agent heterogeneity: when not all agents are the same What do agents do? Yet many other mobile money providers have Agents perform three key roles: they register decided against agent uniformity, instead customers, educate them, and facilitate cash-in/ assigning different sets of agents different roles cash-out transactions. Agents for M-PESA in Kenya or characteristics. For instance, MTN Uganda has perform all of these functions; in other deployments, two different categories of agents: field registration these functions are disaggregated and assigned to agents who are tasked simply with signing up different classes of agents. These responsibilities can new customers, and cash-in/cash-out agents. This be disaggregated even further – distinguishing agents represents a departure from the uniform M-PESA by the size of the cash-in/cash-out transactions that model by separating responsibilities into two types they are authorized to perform, for example. There of agents. are advantages and disadvantages to setting up agent classification systems in which different agents The agent model chosen by South Africa’s Standard specialize in different things, and operators need Bank Community Banking represents a departure to understand these before deciding which model from the M-PESA model too, but in a different way. works best for them. They have built an agent network composed of different types of agents: small shops, bank branches, Agent Uniformity: the Safaricom Model bill-payment counters. All of these agents perform One of the most important characteristics cash-in/cash-out, but each category has a different of Safaricom’s M-PESA agent network is its tariff structure. 2
- 3. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators Other retailer Community Standard Bank Standard Bank Other banks Cell phone POS (MasterCard EasyPay retailer retailer ATM branch ATM merchant) Payment to another Standard 1% with min 50c 1% with min 50c not applicable not applicable not applicable not applicable not applicable Bank mobile banking account max R10 max R10 Purchase goods from retailer 1% with min 50c 1% with min 50c not applicable not applicable not applicable R2,25 not applicable max R10 max R10 Cash paid into your Standard 1% with min 50c not applicable R4,50 R9,00 not applicable not applicable R9,00 Bank mobile banking account max R10 Cash out 1% with min 50c not applicable R4,50 R9,00 R4,50 not applicable not applicable max R10 Airtime purchase (MTN, free free free not applicable R4,50 not applicable not applicable Vodacom, Cell C, Telkom) Electricity purchase free free free not applicable R4,50 not applicable not applicable Balance enquiries R0,50 R0,50 R2,25 not applicable R2,25 not applicable not applicable Mini-statement R0,50 R0,50 not applicable not applicable not applicable not applicable not applicable Payments to another bank R3 R3 not applicable not applicable not applicable not applicable not applicable account Payment of an EasyPay bill R3 R3 not applicable not applicable not applicable not applicable R3,00 Payment to a credit card R3 R3 not applicable not applicable not applicable not applicable not applicable Purchase and/or cashback at not applicable not applicable not applicable not applicable not applicable R4,50 not applicable other retailers Point-of-Sale Cheque deposits not applicable not applicable free free not applicable not applicable not applicable Standard Bank Community Bank Schedule of fees – 2009 But why have these deployments broken from In Standard Bank’s case, their strategy was to tap into M-PESA’s proven agent model and decided to allow existing distribution channels – channels like bill- different agents to perform different functions (in the payment outlets that were already in place in the relatively case of MTN) and charge customers different prices sophisticated South African market – but they found for transacting at different types of agents (in the case that doing so required paying different commissions to of Standard Bank)? different kinds of outlets. To preserve its own margins, Standard Bank decided to charge customers different In MTN’s case, the decision to separate the registration tariffs that mirrored the different commissions that they function from the cash-in / cash-out function paid different categories of agents. enabled them to quickly acquire customers, for two reasons. First, MTN was able to rapidly mobilise The decisions made by MTN Uganda and Standard a large sales team since it is quicker and easier to Bank required them to make tough tradeoffs. For onboard a field registration agent than a cash-in / Standard Bank, leveraging pre-existing distribution cash-out agent. Moreover, a field registration agent points to rapidly scale their agent network justified spends 100% of his time promoting mobile money, the risk that customers would be put off by a tariff whereas cash-in / cash-out agents are typically structure that varied by agent type. For MTN, the engaged in other lines of business, leaving them with ability to rapidly sign up new customers using less time to promote the service aggressively. Second, customer acquisition agents justified taking two risks. field registration agents are mobile, whereas cash- The first is that aggressive field registration agents, in in / cash-out agents are not. This means that MTN an effort to maximize their commissions, would sign can deploy field registration agents to customers in up customers that have no real need for the services the places where they congregate, such as malls or offered by MTN MobileMoney – although MTN festivals. Cash-in / cash-out, on the other hand, have Uganda’s management believe that all its customers to wait for customers to come to them. are potential users of mobile money, making such an ambitious customer-registration effort worthwhile. 3
- 4. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators The second risk is that even customers who wanted and the number of customers has been achieved, (3) to use the service might struggle to find a cash-in / grow the two in parallel. cash-out agent to start transacting after signing up with a field registration agent. Pre-launch Before launching, operators recruit the number Further refinements of agents they believe will be sufficient to meet Beyond the deviations from the agent uniformity demand from early adopters. This number will be model already seen by MTN Uganda and Standard smaller than the number of agents that the operator Bank Community Banking, a third kind of variation seeks to have in the long run, but experience shows is possible. We expect that operators will begin to that growing the agent network too fast, too soon appoint different classes of agents based on the entails significant risk. transaction values which they are empowered to perform. For example, small, informal agents might To justify sticking with the service, agents need have low transaction limits, while bank branches, to perform a certain number of transactions per supermarkets, or other formal outlets with deep day. That’s the only way they can earn a sufficient pools of liquidity would specialize in large-value return on their investment in float. When operators transactions. This will offer users the ability to recruit too many agents before launch, there often make very large and very small value cash-in/ won’t be enough business to go around, causing cash-out transactions, transactions which today are agents to defect. This can happen quickly. One either unaffordable or impossible but would make mobile operator recently launched a service and the service more attractive to high and low value within two months had signed up 3,000 agents but customers. But operators will have to balance this just 60,000 customers. Assuming each customer opportunity to permit a broader range of transactions performed two transactions per month, this would – and thereby entice users at the base of the pyramid provide each agent with just one transaction per day and at the high end to sign up – with the added on which he would likely earn less than a dollar in complexity of a heterogeneous agent network. commissions. This poor return led many agents to reinvest the capital they previously committed to Nevertheless, operators, particularly those who are float into something more productive and to forget launching a new mobile money platform, should key processes related to mobile money. This cycle not forget how complex mobile money can seem can jeopardize a deployment: when agents lose to potential users. This is particularly important interest and stop holding float, customers become when the target market is unbanked people with frustrated because they can’t find a liquid agent and low levels of financial literacy. When this is the case, stop generating the very transactions agents need to operators should exercise caution when introducing justify their investment in mobile money. refinements into their agent network that confuse the target market. Since the number of agents that operators seek to have active at the time of launch is small (relative to How big should an agent network be? their ultimate ambition for the scale of the network), Operators and users alike want agent networks to it’s important to optimise their geographical be as large as possible. However, there are good distribution. For instance, deployments that focus reasons why growth in agent networks has to be on money transfer will need to recruit agents in carefully planned to ensure the overall success strategically defined ‘send’ and ‘receive’ areas. of the deployment. Our analysis suggests that In the case of M-PESA, this meant recruiting not operators should take a three-phased approach to just in Nairobi, but also in rural areas. To map the scaling their agent network: (1) recruit an adequate specific remittance corridors for which each end will number of agents throughout the market to support a require coverage, some operators examine data from commercial launch; (2) redirect resources from agent existing airtime transfer services, or leverage market recruitment to customer acquisition after launch; then, knowledge from bank partners that may already once an equilibrium between the number of agents offer remittance services.1 1 It is because domestic remittance corridors are inter-regional that pilot tests of mobile money in narrowly circumscribed geographies 4 often fail.
- 5. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators Post-launch Managing controlled, sustained growth After going to market, operators should change Because each market is different, it is impossible to their focus from signing up agents to signing up generalize about what the ratio between users and customers. Having previously signed up a cadre of agents should be. Ultimately, operators will know new agents, operators need to, as quickly as possible, when they’ve found this equilibrium when users send those agents the business that will keep them have convenient access to agents that maintain float committed to mobile money. Over time, the ratio of – because agents, in turn, get enough customers to users to agents will thus begin to increase. reward them for doing so. For example, Safaricom launched M-PESA with just a Once this equilibrium is achieved, operators should few hundred agents in Kenya (that is, fewer than 5% seek to maintain balance by growing their agent of the number of M-PESA outlets today). Thereafter, network and their customer base roughly in parallel. they signed up new customers much more rapidly Operators can do this by carefully timing their use of than new agents: in the first quarter, for example, mechanisms that will accelerate growth in customer the number of users quintupled, while the number numbers (from increased above-the-line marketing of outlets barely doubled. Within six months, the expenditures to temporary trade promotions that number of users per agent had grown from zero to encourage signing up new customers) or the agent 600. network (such as special incentives offered to aggregators for signing up new agents). M-PESA: Growth in Agents and Customers 100% 100% What should mobile operators look for in a prospective agent? 75% 75% Mobile operators accustomed to designing airtime New Agents as a % of Total Network distribution networks, typically with the goal of 50% 50% New Customers as a % of Total Base ubiquity in mind, may ask why it is important to screen agents so methodically. Mobile money agents 25% 25% need to be selected more carefully than airtime retailers because mobile money and airtime are 0% 0% distributed in two fundamentally different ways. Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Apr 07 Jun 07 Aug 07 Oct 07 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Airtime is sold by retailers as a product. It comes in the form of a physical scratch card, has a clearly marked price, and requires a simple exchange of That ratio continued to increase until it reached cash and a product between customer and retailer. 1,000 users per agent in June 2008. It was only then, Even in markets where electronic top-up is available, roughly 15 months after launch, that Safaricom customers understand the exchange as an electronic started recruiting new agents more quickly than new equivalent to buying a scratch card. customers (again on a percentage basis). Conversely, mobile money agents offer customers a service: loading or unloading monetary value Customers Per Agent into or out of the customer’s account. Moreover, 1,200 1200 as service providers, agents are also expected to help educate customers about mobile money – an 900 unfamiliar concept to target customers – and, if they 900 themselves are trustworthy, play a pivotal role in 600 600 the early days of a deployment in building trust. For all these reasons, the bar for mobile money agents 300 300 should be set higher than for airtime retailers. 0 0 Apr 07 JunA 07 Aug 07 Oct 07 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 7 7 7 7 7 8 8 8 08 8 8 09 9 09 9 09 r-0 -0 -0 0 c-0 -0 r-0 0 t-0 c-0 r-0 -0 t- n- g- - n- t- n ug b b g Ap Ap Ap Oc Oc Oc De De Ju Fe Ju Au Fe Ju Au 5
- 6. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators To some extent, operators can control the quality of #2: Strategic retail locations their mobile money agents by establishing eligibility As with any retail business, location for mobile requirements. Some of these criteria will likely be money agents is important. In recognition of this, dictated by regulation, but in most markets operators WING, a bank-owned, multi-operator deployment need to develop selection criteria of their own. These in Cambodia, has focused on creating a dense typically include the following: network of agents along a busy road in Phnom Penh where many prospective customers work in garment #1: Ability to maintain sufficient cash and e-money float factories. WING staff have personally vetted the balances. suitability of each agent location. In the long term In nearly every market, deployments stipulate (and when sustainable), mobile money deployments minimum values of physical cash and e-money often seek to have at least two agents in each locale to float that agents must maintain. These minimum promote healthy competition. values are designed to ensure that agents will be able to serve the projected number of customers for Agent Branding and Merchandising their catchment area. For instance, Zambia’s Celpay Agents are often required to brand their shops with requires agents in metro Lusaka to maintain US$780 materials furnished by the mobile money service provider. in float, and rural agents to maintain US$575 at any This usually consists of signs or banners for the outside point in time.2 of the shop which advertise that the establishment is a mobile money agent for an operator and not merely a But how can operators assess whether a potential seller of airtime; and then a poster for the inside of the agent has the means to maintain the required amount shop that plays a customer education and protection of float? Pakistan’s easypaisa leverages Telenor’s role. data on airtime agent sales to identify retailers that are healthy and liquid businesses prior to approving When deciding how much to require of agents, operators them as a mobile money agent. Operators who should be realistic about the amount of leverage they are offering mobile money services in partnership bring to the relationship. For example, Safaricom in Kenya with banks can leverage their partner’s expertise in prohibits its M-PESA agents from selling airtime for rival evaluating the financial health of small businesses. mobile networks and insists that M-PESA agents be And in cases where the retailer is a current client of prominently branded as such. But it was able to do so in the bank, operators can make use of the data gathered part because of its dominant market position (74% market over the course of the relationship between bank and share at the time M-PESA was launched), a position of retailer. For instance, MTN Mobile Money in Ghana negotiating strength that few other operators enjoy. works with 9 bank partners, each of whom leverages their knowledge of existing clients to help identify #3: Literate staff suitable agent candidates. Mobile money agents must be literate since their responsibilities always include performing processes Float Requirements that involve reading and/or writing. In some cases, Typically, operators require agents to commit to holding it will be necessary for agents to be literate in a a certain amount of cash and e-money. This is almost language other than their native one. For instance, always in addition to the “cash in the till” that retailers agents for M-Paisa in Afghanistan must be able to would hold anyway. Operators need to decide what they read in English or in phonetic Dari and Pashto to can realistically expect agents to maintain in float, taking conduct transactions on their handsets and record into account agents’ access to capital, their alternative information. investment opportunities, and so on. It is also worth noting that, in our experience, minimum float #4: Trusted by the community requirements are flouted (with the operator’s Because mobile money is a financial service, the tacit consent) in many markets in the early days credibility of a new service can be enhanced if agents of a deployment. As discussed in the introduction to are themselves are already deemed trustworthy by this section, it is only when agents are sent customers consumers. This can be achieved in several ways. who want to transact that they begin to see value in Many operators have established partnerships with maintaining float. large retail chains that offer high brand visibility 6 2 For more information, see “Case Study - Zambia” in the 2009 Mobile Money for the Unbanked Annual Report. http://www.gsmworld.com/documents/mmu_2009_annual_report.pdf
- 7. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators to serve as agents – chains which frequently also The experience of Vodacom Tanzania, which has have deep pools of cash liquidity which they can tested multiple recruitment strategies when setting leverage for cash-out. In other cases, operators have up an agent network for M-PESA – from leveraging used aggregators with local knowledge of the retail airtime distribution channels to engaging a field landscape in particular areas to source the most support agency, and finally to an aggregator model – trusted and respected agents – even when they’re illustrates the advantages and disadvantages of each small and informal businesses. approach. #5: Reach Leveraging Operator Airtime Distribution Channels Signing up multi-outlet agents (supermarket chains, When initially planning for M-PESA’s launch, banks, microfinance institutions, etc.) often offers a Vodacom Tanzania hoped to leverage its existing quicker route to scale than recruiting single-outlet airtime distribution channel in building an agent shops one by one. But given that the retail sector network. Specifically, Vodacom Tanzania wanted its is largely informal in most markets conducive to six airtime superdealers (that is, the businesses to mobile money, independent outlets typically form which Vodacom Tanzania sells airtime and which the backbone of any operators’ agent networks. in turn sell it on to the channel) to spearhead the recruitment of agents, exploiting superdealers’ and How are agents recruited? their dealers’ knowledge of the channel to identify Recruiting agents is one of the most time-consuming potential agents based on their location, volume of and costly parts of launching a new mobile money airtime sales, and other factors. But when Vodacom service, given that the value proposition for agents Tanzania approached its superdealers and asked is not yet obvious to the pool of potential agents. them to take on this role in exchange for a share of Broadly speaking, it involves three activities: future commissions, they only agreed to contribute identifying potential agents, educating them about their directly owned outlets to serve as M-PESA mobile money, and encouraging those who are agents, but declined to play a more strategic role4 as interested to apply. Since in most markets the pool of the M-PESA commission model was not designed to potential agents is much larger than the number who pass on commissions to further tiers. will ultimately become agents – at least in the early days of a deployment – operators have to cast a wide Engaging a Field Support Agency net in order to sign up their target number of agents.3 Vodacom Tanzania realized that building an agent One key decision operators need to make is whether network throughout the country without the help to do this work in-house or to outsource it. In the of their superdealers would require a lot of legwork. early days of its M-Paisa deployment, Roshan tasked There are few chain stores in Tanzania, so quick its regional sales managers with the responsibility wins (getting a large number of agents by signing for signing up M-Paisa agents, but found that they a single deal) would not be common. And since did not have sufficient bandwidth to devote to the they would be contracting with them directly, the effort. Alternatively, some operators hire resources obligation to conduct due diligence on potential within the mobile money team who are responsible agents was significant. To ease the demands on for recruiting agents. The major drawback to this internal resources, Vodacom hired Afrikings – the approach is that these new recruits will probably company already responsible for field marketing and not know the retail landscape in sufficient detail sales for Vodacom’s airtime distribution network – throughout the country to identify promising agents to recruit M-PESA agents. Even with their help, this particularly efficiently. When operators decide to turned out to be a slow process; out of 100 potential outsource agent recruitment, they must also decide agents that would attend an information session to whom to outsource, and on what terms. about M-PESA, only ten would show interest, and many of these would ultimately prove unsuitable in the due diligence process – a process which, even 3 Eventually, operators can scale back oreven eliminate most of their recruiting efforts, once the number of potential agents which self-identify and apply on their own is sufficient to meet the operator’s growth targets. 7 4 For a more thorough discussion of why this often happens, see our “Incentivising Mobile Money Agents” at http://www.mmublog.org/agent-networks.
- 8. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators for successful applicants, took 3–4 weeks. In part, the that rewards aggregators for signing up bad agents problem was that Afrikings representatives lacked – that is, those who are not going to actively serve detailed knowledge of the retail landscape in the customers (because they don’t maintain float or for many towns and villiages they were responsible some other reason). One solution to this problem is for, meaning that they were unable to quickly sort to only pay out the full commission for signing up through the large number of potential agents to hone an agent to the responsible aggregator once that in on the most promising candidates. Nevertheless, agent has performed some minimum number of by April 2008 Vodacom had assembled 100 agents transactions and/or signed up a certain number of and went to market with M-PESA. customers – although aggregators would probably complain about this, given that the actions of agents The Aggregator Model are, ultimately, outside of the aggregator’s control As time went by, it became clear that Vodacom was after the recruitment phase. unable to recruit agents fast enough to keep pace with growth in the customer base. So it decided to add a Vodacom Tanzania decided that its aggregators were layer in the distribution channel between Vodacom positioned well not only to recruit agents, but also and its agents that could speed the agent acquisition assist them in managing cash and electronic-value process. These new players, called aggregators, were liquidity. As such, they decided to offer aggregators to be responsible for recruiting new agents and for a percentage of the commissions earned by agents managing their float. In return, they would be paid they’d signed up to M-PESA in exchange for helping a bonus for each agent recruited and a percentage of them manage those agents’ float. We discuss this commissions earned by that agent going forward. arrangement in more detail in the “Managing Mobile Aggregators were given no regional exclusivity, Money Agents” section of this handbook where unlike Vodacom Tanzania’s airtime superdealers. we refer to entities tasked with managing agents’ liquidity as masteragents. The key point for now is to This structure proved to be effective, and it persists note that, by tasking aggregators with both recruiting at Vodacom Tanzania to this day. There are seven and ongoing cash management, Vodacom Tanzania aggregators, and the intention is ultimately to have effectively incentivized them to sign up quality no more than ten.5 Vodacom Tanzania has found agents – that is to say, agents who are liquid and who that these aggregators can sign up agents extremely will stand ready to transact with customers. quickly; one, for example, signed up 50 agents in three weeks. It is telling that, today, Safaricom recruits agents in a manner very similar to Vodacom Tanzania, even Defining the Role of Aggregators though it got started by recruiting agents using Speed is the crucial advantage of the aggregator in-house teams. As customers started flocking to model. Typically, the driver of such rapid growth M-PESA in late 2007, those agents started making in the agent network is an incentive scheme for significant profits. In turn, huge numbers of agent aggregators that rewards them for each agent they sign applications started to flood Safaricom, outpacing up. For obvious reasons, this compensation structure its ability to review them properly. At the same time, is more effective than one where aggregators are paid agents began appointing other agents and managing a salary or flat fee regardless of the number of agents their liquidity (i.e. activity of masteragents).6 that they sign up; however, the operator should not commit itself to paying such bonuses indefinitely, When deciding which of these recruiting models since at some point in the growth of the service it is best for them, operators need to ask a series of will no longer be necessary for aggregators to source basic questions. What are the internal capabilities – applications; agents will apply for themselves. whether in the airtime distribution team, or the mobile money team – that could be leveraged for building Theoretically, the responsibility of aggregators could an agent network? What is the appetite of airtime end once an agent is signed up. But it is important superdealers for distributing mobile money? Are to avoid putting into place an incentive structure there entrepreneurs in the market who can take on the 5 It is interesting to note that one of these aggregators is Afrikings, Vodacom Tanzania’s field marketing esales support agency. 8 6 See “Three keys to M-PESA’s success: Branding, channel management and pricing” by Ignacio Mas and Amolo
- 9. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators aggregator role? Are operators comfortable giving up Completed personal declaration forms by some control over the identification and recruitment company director(s) process? Only after answering these questions can the Police certificate of good conduct for appropriate agent recruitment strategy be developed. directors or persons playing equivalent role, What is clear is that aggregators speed the growth of office administrators, and primary assistants. an agent network and can play a valuable role in its ongoing management. Is there an application process? And just as some agents may struggle to produce While the application forms are typically simple, the required supporting documents, some operators prospective agents often struggle to produce the often find it difficult to process them at a reasonable required supporting documentation to complete an speed. application. This should not be surprising. Operators like M-PESA require everything from certificates of Thus, prior to launch, operators should consider how incorporation to 6 months worth of bank statements. long each application will take to review, reconcile it For some prospective agents, these are not easy with the anticipated size of their agent network and documents to source. Operators therefore need to scale their back office operations accordingly. balance a desire to diligently vet prospective agents by requiring extensive documentation with the Some operators decide to supplement this back office equally strong need to build a network of sufficient review by physically visiting each prospective agent scale. Generally speaking, there should be a clear to inspect their premises, verify staff capabilities, and rationale for each document required, and operators consider whether the location is desirable. should test whether desirable agents will be able to supply all these documents. What obligations are contractually imposed on agents? Contracts between operators and agents vary considerably across markets, but common clauses From agent applicants that are not already Safaricom include: airtime dealers, Safaricom requires the following documents: Branding: operators commit to furnishing agents with the marketing and branding materials which Copies of Memorandum and Articles of they need; agents, in turn, agree to use only Association materials provided by the operator Certified copies of VAT and corporate income Commissions: operators reserve the right to vary tax certificates, where applicable and/or suspend any commissions at any time (and A profile of the company and a business plan when operators use masteragents and pay agents List of outlets via masteragents, masteragents are obligated to Certificate of Incorporation or equivalent pay out commissions to agents within a certain An official shareholding statement or equivalent timeframe) Copies of IDs and passport photos of company director(s) AML/CFT: agents commit to carrying out AML/ Copies of IDs of key staff CFT checks, subject to training by the operator or Completed M-PESA agent application form its appointed proxy, and any reporting obligations Business permits for each of the outlets imposed by the operator and/or regulator Proof of minimum 6 months trading history in Float: agents commit to maintaining a certain level the form of 6 months of company bank statements 9
- 10. Building, Incentivising and Managing a Network of Mobile Money Agents: A Handbook for Mobile Network Operators of float (when operators use aggregators, this day’s revenue, to attend the session. However, the responsibility may be assigned to the aggregator advantage for Safaricom is that it is better able to instead) control the content that is presented to agents and can expect the agent’s full attention for the day. Safaricom Termination: operators and agents typically reserve supplements this training with follow up visits (also the right to terminate their relationship at any by Top Image). time and without cause Splitting the difference, Orange in Côte d’Ivoire If an operator has chosen not to appoint masteragents, holds half-day training sessions for new Orange then its agents should be contractually prohibited Money agents in regional hubs around the country, from ceding, delegating, or sub-licensing any of their which are supplemented by in-store visits by staff rights or obligations to any third party. thereafter. How are agents trained? Training Field Registration Agents Training agents is a non-trivial undertaking. Agents Operators who use a separate class of agents for must not only have a good conceptual grip on mobile customer acquisition generally employ a different money, be able to conduct transactions (including training mechanism for them. In Uganda, field following all the associated business processes, such registration agents receive 2–3 weeks of field training maintaining a transaction logbook), and fulfill KYC when they start with MTN (although they are and AML/CFT requirements; they must also be typically paid very little, if at all, during this time). able to explain the service to customers and provide This is mostly spent trailing more experienced agents basic support to them. Every operator with a mobile to learn about the features of mobile money, the KYC money platform needs to develop a training program process, etc. WING in Cambodia, has chosen instead that covers these essential elements. to train its field registration agents in 2–3-day-long sessions before sending them out into the field to Training Cash In/Out Agents start signing up customers. Of course, the content for To deliver this training, operators need to decide these sessions differs significantly from that which is whether to train agents in the field, generally at presented to cash-in/cash-out agents, too: customer the agent’s retail shop, or at some central location. acquisition agents only need to be trained on one In Uganda, new handlers – that is, any new front- transaction type, but may need additional training line employee of a cash-in/cash-out agent for MTN on sales techniques. MobileMoney – receive up to six hours of training in the field. This training is a mix of theory and practice and is administered by representatives of Top Image (a field marketing support agency) that are dedicated to MobileMoney.7 The training culminates in an exam, and if the handler doesn’t pass, the Top Image representative comes back the next day to conduct further training. In practice, however, sometimes new handlers are trained by other employees of the agent. In contrast, Safaricom requires the owner or manager of each new agent to attend a full-day session in Safaricom House in Nairobi, which also culminates in an exam. This does inconvenience new agents and may discourage some small, “mom and pop” shops in remote areas from applying to be agents, since it would require shutting the shop, and forgoing a 10 7 Top Image was used for the first 6 months, but recently MTN moved their functions in-house.
- 11. For further information please contact mmu@gsm.org GSMA London Office T +44 (0) 20 7356 0600