It is barely 6.30 a.m. when the first points of sale for Mobile Money services start to open in Soubré, a cocoa-growing town in the southwest of Côte d’Ivoire, in the Bas-Sassandra district. We can easily see above small kiosks lined up along the main arteries of the small brand new blue signs with a penguin mascot jostling the eternal black-orange signs.
In the current decade, Mobile Money and agent networks are positioning themselves as a lever and a link to promote economic, social and financial inclusion of the last mile. With an extended banking rate of 30.8% , and the penetration rate of Mobile Money services of 73%, Mobile Money continues to play an increasingly important role in the financial inclusion of Côte d’Ivoire. .
According to the ARTCI quarterly report (March 2021), the Mobile Money offer was until then held in Côte d’Ivoire by the three main mobile phone operators with shares of 48.3%, 41.1% and 10.6% respectively for Orange, MTN and Moov. Orange CI was the leader in offering Mobile Money services in Ivory Coast and competition was weak in the market until the arrival of Wave in April 2021. Two months after the launch of Wave’s activities, in the ARTCI report (June 30, 2021), the market shares of Orange and MTN fell respectively by 8.7% (despite a 3.2% increase in the number of mobile telephony subscribers) and 1.7%. And the aggregate of the three operators indicates a decline of 4.6%.
The current competition (Wave and existing MNOs) in the West African market in the offer of deposit, withdrawal and transfer services (Mobile Money) has not only had consequences on market share. Mobile money service providers have embarked on a price war that impacts transaction fees and agent commissions.
Wave, an innovative model but not very friendly with the rural population …
Wave’s service model is innovative and takes into account many issues that agents have been complaining about for several years.
The registration process for smartphone owners is simpler and faster (via an application that provides a QR code). But for holders of basic telephones, it is necessary to go to an agent who registers and gives a QR code card to bring to each transaction, one more requirement compared to OTMs. With a 152% telephony penetration rate, basic telephones are the most numerous in rural areas of Côte d’Ivoire. Note also that it is difficult to consult your balance on your Wave account with this type of phone. To do this, you must also go to a Wave agent.
Wave has positioned itself with its policy of eliminating double pricing. To the surprise of the Ivorian population, with Wave, deposits and withdrawals are free and only the national transfer at 1% and the transfer to neighboring countries at 1.5%. As the philosopher Seneca puts it, The fear of war is even worse than the war itself , and to deal with this far below average price point, all the pricing tables of other operators have adjusted to that proposed by the new entrant.
No one is surprised by this price adjustment for a long time offered on the Ivorian mobile money market. “ So these operators have been cheating on us all this time. If today they can lower their prices, they are not being honest. They don’t like us. Welcome to Wave ”. is surprised Fabiola, a saleswoman at the large Soubré market. This price adjustment can be seen as a small victory for Wave as declared by Ms. Coura Carine SENE, CEO WAEMU of Wave Mobile Money: “(…) Wave is delighted with the alignment of mobile money players with a business model which was so much criticized. ”If the populations have so far been successful in this battle, it is by far for some agents in the rural areas of Soubré.
Support to offer services, but impacted commissions
Some rural agents believe that Wave is that operator who understood their liquidity needs by offering a fund and a phone to start the business and the actor created panic in the Mobile Money market. Certain decisions taken by operators have influenced the activities of agents in rural areas.
“ We blocked my transaction chips from certain agents (mine included) and not others for 2 weeks, and I should go to Abidjan (around 410km) so that access is restored” confirms me a agent . All operators have changed their commissions except Orange, which has notified that these commissions will be revisited after the cocoa period.
Wave’s commission model is based on the volume of daily transactions unlike other operators who apply remuneration per transaction, a model preferred by agents. The preference of the population for Wave transactions has shifted a significant number of transactions from other operators. Changes in commission levels and the preference for Wave trades create uncertainty in the total package of commissions earned by agents monthly.
It emerges that the entry of Wave on the market had the other consequence of reducing the transactions of other operators to its profit. According to agents in rural areas, this shift negatively impacts their commissions. Faced with this perception, agents in rural areas are faced with a dilemma between the preferred operator and the commissions offered by this operator.
In a perspective where the questions are the fair price and the needs of customers, all stakeholders in the model benefit from it and not that they have no other choice but to be partners, profitability based on impact is significant, however, many people wonder about the performance and viability of the Wave model. Since there is no universal definition of a “performing” agent network, it is still too early to come to a conclusion about the Wave model. However, according to Microsave’s reports on successful agent networks and the key elements that determine the success of agent networks, certain indicators such as a clearly defined value proposition and a good knowledge of the competition allow digital financial service providers to set up a network of agents that will help them achieve their objectives.
Microsave Consulting has supported several entities in improving their strategies, operations and agent network processes, conducted research to understand the environment of banking agents, their motivations, trained professionals in the management of banking agents. ” a network of agents and offered training and support to agents in order to significantly increase transactions and their efficiency. This support is based on interviews conducted with more than 40,000 agents around the world to identify the factors responsible for the success or failure of agent networks. This helps our clients to improve their agent network strategies, liquidity management systems, agent selection training and recruitment approaches. More importantly, in a context of strong competition, they made the value proposition for agents more attractive and reduced the rate of inactivity and abandonment.