Page 338 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

understand usage of OTC difficult. Further research into this area is certainly warranted. We have outlined
some early conclusions and considerations based on current data below.

In Bangladesh, Pakistan, Tanzania, and Uganda, where OTC is offered in addition to mobile money accounts,
the majority of mobile money users seem to prefer OTC. This appears to be driven by two factors: 1) Needs
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based behaviour: when asked why they prefer OTC, generally users respond by saying OTC fulfils their needs,
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and do not cite reasons related to the awareness of mobile money accounts, or issues with registering. Indeed
many implicitly or explicitly refer to service and risk related issues as the reason why they prefer to use an
agent to make the transaction.) Service promotion: In countries such as Bangladesh and Pakistan, the service
providers also promote OTC more than the mobile money account.

To further understand why users prefer OTC to registering for accounts in some markets, a market segmentation
of account adoption can provide a helpful context.

4.1 Market segmentation of account adoption

Generally, we can segment the market into three large groups:

1. Innovators and early adopters that are quick to use the service (usually young, urban, salaried males,
who are likely to register early when given an OTC option);
2. The early and late majority that usually come later and take some convincing. (A bigger portion of the
population, but probably not as wealthy as the innovators and early adopters. They will likely register
but it is unclear if an OTC option will increase or decrease that timeline); and
3. Late adopters, or those who are never going to adopt (Impoverished, rural, women, and illiterate
populations which in many countries can be the majority of the population), who may not perceive a
need for a mobile money account, even once they understand it, but might want to make the occasional
transaction over the system, and may be enticed by future, more appropriate, products. They will likely
be more comfortable transacting with an agent, may not see utility in registering for a mobile money
account, and even if they are forced to, will probably just use it at an agent location anyway for the
foreseeable future.
InterMedia (2016), provides a helpful glance across five leading markets, noting digital finance usage as a
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proportion of the population in the pie charts, and then segmenting further into registered and non-registered
(OTC) usage in the figure below.

41 Financial Inclusion Insights by InterMedia observes that users are more likely to make a transaction through OTC versus using an
account, reports from Financial Inclusion Insights are available at: http:// finclusion. org/ reports/
42 InterMedia (http:// finclusion. org/ datacenter/ ). Results are discussed in more detail in this section.
43 See InterMedia at: http:// www. intermedia. org/

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