This case study looks at how M-Pesa, a service that originated in Kenya, was tweaked for India and whether it can succeed.
EXPERT VIEW:
OPTIMUM ADOPTION OF M-PESA WILL TAKE AT LEAST TWO YEARS
“M-Pesa’s adoption has been low owing to factors such as awareness and lack of information and communication technology”
SANCHIT VIR GOGIA
Chief Analyst & CEO, Greyhound ResearchFinancial inclusion is the need of the hour in a country like India and it has been emphasised enough by government, companies and individuals. The RBI’s pilot project on M-Wallet has been an important factor within the e-commerce industry and I believe it is heading in the right direction.
Talking about M-Pesa, which is Vodafone’s M-Wallet offering, the adoption has been low owing to factors such as awareness and lack of ICT (information and communication technology) networks. For this platform to thrive it is imperative that India also reaches a healthy stage of digital inclusion, that is, connectivity for all. Adoption is a key factor for such a service. It is important to understand that for any new service, a mind-shift to use that particular service takes time. This will happen when the government brings vendors, suppliers and the customer on a single platform to promote M-Wallet or, in this case, M-Pesa.
Word of mouth is the greatest tool for influencing people. If the service picks up in tier-1 and metropolitan cities, it is bound to have a ripple effect in tier-2 and tier-3 cities. However, the success and the growth of M-Pesa will depend on the merchants who will promote and integrate M-Pesa with their business needs. We still need to understand the fact that there are many uneducated people in the tier-2 and tier-3 markets who do not understand the concept of M-Wallet in its complete functionality. Educating them is a primary concern for vendors. If this problem is approached strategically, it is only then that M-Pesa can achieve its optimum growth.
Therefore, Vodafone needs to approach the Indian market very strategically by ensuring that people are digitally educated on the advantages and convenience of a platform like M-Pesa. In order to achieve optimum adoption of M-Pesa platform, Vodafone needs to give at least two years.
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