Author: Neil Davidson
One of my first posts for this blog explored how mobile operators could exploit the network effects that characterize mobile money services by “subsidizing” early adopters—that is, by rewarding those who sign up and use a service early with deep discounts or bonuses to make up for the fact that there aren’t many other people on the network to transact with. It’s a classic pricing strategy in networked markets.
Recently, Airtel in Kenya launched a new promotion offering Airtel Money (formerly known as Zain Zap) customers free money transfers to both registered and unregistered customers. Although slated to run only for a short time, this promotion is a clear illustration of an attempt to subsidize participation in a network that has far fewer users than its competitor M-PESA, the most famous and well-established mobile money service in the world.
Read More: http://mmublog.org/blog/free-money-transfers-in-kenya/
About the author:
Neil Davidson is a Manager for the GSMA's Mobile Money for the Unbanked programme. His role is to support mobile network operators that have been awarded grants from the MMU Fund as they develop and deploy mobile money services. Neil has worked for Kenya's second-largest microfinance institution, K-Rep Bank and as a consultant for McKinsey & Co.