MTN has switched from a digital-first strategy of acquiring mobile money customers to an agent-led one which better suits their target market in its home country, South Africa.
This is coming at a time when the MTN Group is pursuing a digital operator agenda within the context of its overarching Agenda 2025 platform player strategy. But in a recent interview, the Group President and CEO, Ralph Mupita stated that its fintech strategy is to rope in the unbanked into the financial sector, which will take more that using a digital-first strategy.
Acting CEO of MTN MoMo in South Africa Kagiso Mothibi said the switch from a digital-first methodology of acquiring customers to an agent-led, “boots on the ground” strategy is better suited to MoMo’s target market, which is the unbanked population.
“Initially we were reliant on a digital acquisition strategy, meaning we tried to acquire the customers and convey our proposition via messages. But that is not sufficient for the type of customer we are after,” Mothibi said.
“For our customer base, you have to explain the value, just like how our competitors who have branches were able to do, and that translates into an activity profile that should mimic what you expect.”
According to Mothibi, MTN has observed that customers who are acquired digitally usually respond to a specific product or use case they already understand. A lot of the time, however, their behaviour on the MoMo platform is then limited to that specific behaviour.
MoMo is now using agents and ambassadors to explain its various use cases to the public. Mothibi said this will convey the platform’s utility and build trust too.
He said many of MoMo’s customers use the platform to purchase well-understood services like airtime recharge, airtime advance and prepaid electricity. Part of MoMo’s strategy is to drive these users onto higher margin “advanced services” such as purchases and withdrawals at merchants, and the purchase of insurance products.
Ghana
In Ghana, MTN initially embarked on an agenda to become a complete digital operator by 2023 (two years ago), then later ditched that agenda to align with the group’s Agenda 2025 strategy.
As of last year, MTN’s former Chief Digital Officer, Dario Bianchi was pushing hard to move all customers to MTN’s digital platforms so that it can completely shut down its USSD platforms.
His push was in two ways – MTN offers juicy bonuses to people who use the digital channels for transactions, but gives no bonuses for the use of USSD channels. Secondly, MTN collaborated with some handheld device vendors to launch a buy now pay later (BNPL) initiative to help many customers acquire smartphones.
But Dario Bianchi got a wake up call from his own colleague at MTN MoMo, Sylvia Otuo Acheampong, who pointed out that, out of over 13 million MTN MoMo customers at the time, only about 450,000 used digital channels and the remaining 12 million plus use USSD channels, so there is no way MTN could be thinking off shutting down USSD channels anytime soon.
Besides, MTN’s BNPL program meant people will pay about twice the price of any smartphone they purchase and pay for on instalment basis, which did not make sense for a program supposedly designed to make smartphones affordable for low income Ghanaians.
Again, at the recent 3i Africa Summit in Ghana, Dario Bianchi repeated that MTN was embarking on a drive to go completely digital. But technology expert Ethel Cofie, again reminded him that the population MTN was serving would always need USSD channels as an alternative so MTN cannot completely shut down those channels.
Clearly, in its own home country, where MTN has over 11 million MoMo customers, the company has woken up to the reality that digital-first strategy and a complete digitalization of the MoMo platform for populations like the ones in Africa is not fit for purpose.
Dario Bianchi has moved on from MTN Ghana, and now it is not clear whether MTN Ghana is still pursuing the agenda to completely go digital in the near future. If Agenda 2025 is anything to go by, MTN should become a complete digital operator by next year. We just have to wait and see.
