Mobile Money in Pakistan
Use, Barriers and
Opportunities
The Financial Inclusion Tracker Surveys Project, April 2013
Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Pakistan Country Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Mobile Money Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Mobile money adoption at the household level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Mobile money adoption at the individual level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Pakistani m-money services market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
M-money use patterns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Barriers to and motivators for m-money adoption and registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Households’ financial routines and the role of mobile money . . . . . . . . . . . . . . . . .
Remittances: Sending and receiving patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-remittance payments: Sending and receiving patterns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mechanisms for household savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance and loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
14
18
19
19
Economic shocks and HOW HOUSEHOLDS RESPOND TO THEM. . . . . . . . . . . . . . . . . . . . . . . . 22
Negative economic shocks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Positive economic shocks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2
Mobile Money in Pakistan: Use, Barriers and Opportunities
EXECUTIVE SUMMARY
In 2011, the Bill & Melinda Gates Foundation’s Financial Services for the Poor (FSP) program commissioned
InterMedia to design and implement a project to track the uptake, use and market potential of mobile money
(m-money) services in Pakistan, Uganda and Tanzania.
The findings from the Financial Inclusion Tracker Surveys Project (FITS), which includes annual panel-based
surveys conducted on a national scale, are intended to support the m-money activities of the Bill & Melinda
Gates Foundation, development organizations, mobile operators, regulators and others who play active roles
in m-money ecosystems. The surveys also are designed to facilitate analyses of m-money’s relationship to
household financial behaviors, particularly a household’s ability to manage economic shocks.
This summary presents the key findings from the first annual FITS survey of 4,940 households in Pakistan
conducted in May through September 2012. The first annual FITS Uganda and Tanzania survey reports, as well
as the Pakistan survey report, are available on AudienceScapes, InterMedia’s online research knowledge base,
at www.audiencescapes.org/FITS.
Pakistan and Mobile Money
Based on the survey findings, nine in 10 Pakistani households—including poor, rural and unbanked
households—have access to a mobile phone and a SIM card. However, the rates of m-money registration and
use are low.
The survey results suggest that barriers to m-money registration and/or use differ for those using m-money
through an agent/over-the-counter (OTC) service and nonusers. OTC users feel they have no need to register
because they can access all necessary services through the agent. An insufficient understanding of the
services and the limited number of m-money users within respondents’ social networks (friends and family
members) appear to be additional barriers to m-money registration among OTC users.
Among nonusers of m-money, insufficient awareness (60 percent of nonusers know about the services) seems
to be the most common reason for not using mobile money.
Survey data point to several financial service areas with potential for market growth. Non-remittance
payments provide the largest opportunities for m-money expansion. Ninety-four percent of surveyed
households reported sending at least one payment in the past six months, with the government (69
percent of payments) and utility companies (24 percent of payments) receiving the largest number of those
cash payments. Ten percent of households reported receiving payments in the past six months, with the
government serving as the sender of two-thirds (72 percent) of those payments in the form of salaries and/
or benefits. Currently, only about 1 percent of incoming and outgoing payments reported by the surveyed
households are serviced through m-money; the majority of these payments are delivered by hand.
Another area for potential m-money growth is savings. Two in five households report saving money in one
way or another, including one in five households that save with formal financial institutions. However, even
among households that use m-money, saving on an m-money account is rare (0.4 percent). Since a large
group of households already use traditional bank and microfinance institution accounts for their savings,
these households may be the primary target audience for switching over to m-money as their savings method.
Village-level saving groups and cooperatives might offer additional potential for m-money expansion if
members were allowed to open group m-money accounts to store their collected cash.
InterMedia
3
Currently, markets for remittances, insurance and loans are very small. Among surveyed households, in
the past six months, only 4 percent sent or received money (as opposed to food or other goods), 5 percent
borrowed money and 2 percent owned insurance. However, the m-money experience in Kenya, the pioneer
in m-money development in Africa, serves as a good example of how use can change with mobile money
expansion. Within two years of m-money’s introduction to the Kenyan market (by 2009), Vodacom M-PESA
was able to displace formal and informal remittance-delivery channels previously available to the poor
populations and stimulate uptake in remittance frequency and volume.1,2,3 Moreover, the two leading m-money
providers in Pakistan, Telenor and UBL Omni, are seeing a healthy increase in remittance payments each
month, which confirms that, while currently small, the remittances offer an opportunity for m-money market
expansion in the near future.
Key
Findings
AGENT
Only 5 percent of Pakistani households use m-money. The
most common way to access m-money services is through an over-thecounter (OTC) option in which all transactions are conducted by an m-money
agent on an m-money user’s phone (83 percent of m-money transactions).
Very few households have registered accounts (0.3 percent). The use of m-money via accounts of
relatives, friends and other acquaintances is also infrequent.
Despite a relatively slow pace of uptake, 98 percent of OTC users said they are either very likely
or somewhat likely to recommend mobile money to others. The same percentage is very or
somewhat likely to continue using m-money services in the future.
At the household level, m-money use does not seem to be closely
correlated to either the household’s socio-economic status (banked or
unbanked, poor or well-off) or where they are located (urban or rural).
At the individual m-money-user level, gender is the strongest predictor of m-money
use. Ninety-five percent of m-money users are males and only 5 percent are
females. Aside from females, individuals aged 55+ and those with less than a
secondary education are the least likely to be using m-money.
Telenor Easypaisa has 92 percent of the household m-money market ;
the other three m-money products share the rest of the market.
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Mobile Money in Pakistan: Use, Barriers and Opportunities
Households with m-money users are more likely than households without users
to send or receive remittances, save money and own some type of insurance.
They also are more likely to send and receive monetary remittances and payments
as opposed to sending or receiving food or other goods.
Remittances delivered using m-money tend to have different purposes than
remittances delivered by hand. M-money is mostly used for remittances related to
either business or informal loan payments, and accommodates long-distance
money-transfers (50km and farther) sent by friends and members of households
living elsewhere.
Hand-delivery is generally used to bring remittances to family members
and friends living close by (10km or closer). These remittances are part
of regular financial support or are sent to help with economic shocks (e.g.,
marriage). Most non-remittance payments, insurance payments and loan
repayments also are done in-person.
Thirty-nine percent of Pakistani households save money, but using an m-money
account to do so is uncommon. Households with m-money users are more likely to save with
financial institutions (banks or microfinance institutions) and other people. Households with no
m-money users mostly save with community-level savings instruments or in hiding places.
Twenty-eight percent of surveyed households experienced economic
shocks in the past six months. Receiving remittances in response to
a negative economic shock was rare among households with and
without m-money users. However when remittances are sent in
response to a negative economic shock, they have one of the highest
median monetary values, at $10.90, among all possible financial help
reported by households affected by negative economic shocks.
Subsequent FITS survey reports will monitor market growth and measure whether challenges to greater
adoption of m-money have been overcome, particularly among the unbanked and those living at the bottom
of the pyramid.
InterMedia FITS data, reports and related analyses are disseminated to stakeholders in the financial access
community, both in the countries studied and globally, to help inform policies and practices in the field of
financial inclusion. InterMedia also is making the data and analyses available on AudienceScapes
(www.audiencescapes.org/FITS).
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5
Glossary
Banked households—Households that reported saving
money in at least one bank account (including microfinance institutions) in the six months prior to the survey.
Burial societies—A “society” of friends who voluntarily
contribute funds used as life insurance. Funds are paid
out to family members upon the death of a member of
the society for funeral and other expenses.
“Cashbox” or “mattress method”—Saving methods.
Savings are kept in a hiding place at home or on a person.
Chingchi—A motorcycle rickshaw.
Committee system—A group of individuals who
pool their savings. On a regular basis (daily, weekly
or monthly) each individual puts the same amount of
money “into the pot” and, on a revolving basis, one person takes the total amount of money.
Cooperative—Member-only association offering savings
accounts; the accounts do not have an expiration date.
Credit at a local store (e.g., Udhaar per Sauda)—A
delayed payment. A local shopkeeper gives a customer
goods or services without an immediate payment but
with the expectation the customer will pay the bill at the
end of the month, or whenever the household has money.
Economic shock—An unexpected event that has a
major impact on a household’s finances, either positive (e.g., inheriting money) or negative (e.g., spending
money on hospital care for a sick household member).
E-float—When accepting deposits of cash from customers, a mobile money provider issues a commodity known
as “e-float,” measured in the same units as the national
currency and held in a registered account under a user’s
name. When a person sends/receives money through an
agent, the agent has to have e-float (money on the agent’s
account) available to transfer to the recipient’s account.
Otherwise, the transaction cannot be completed.
Gifting circle—A group of individuals, who meet on
a monthly basis and gift each other possessions (e.g.,
domestic appliances or money) or services (e.g., house
construction or land cultivation) to help each other save
money or boost each other’s incomes. Gifts, money and
services are offered on a revolving basis.
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Mobile Money in Pakistan: Use, Barriers and Opportunities
M-money—mobile money.
Mobile money deposit—One of the transactions
m-money users can perform using their own or an
agent’s account to “cash-in” (i.e., put money in the
account). Sometimes, when using an agent’s account,
m-money customers are required to prepay an informal
“deposit fee” in addition to the money they are sending
via m-money and the fees they pay for using the service.
Non-remittance payments—Formal payments sent to
the government, educational institutions, financial institutions (e.g., banks) or private businesses. Non-remittances include payments of taxes, fines or fees, utility
bills, goods, debt or insurance payments. Payments might
include formal credit disbursements and repayments.
Over-the-counter (OTC) transaction—A mobile
money transaction method akin to a Western Union
wire transfer where the customer does not have an
account, but simply hands over cash to an agent. The
agent then facilitates the transaction on the customer’s
behalf using their own mobile money account.
Remittances—Money or its equivalent (food or goods)
sent from one household to another. Remittances include
any informal credit and debt repayments between family
members or friends who live elsewhere, any repayment of
debts, or payments for goods and services.
Rural households—Rural households are defined
according to their location in rural enumeration areas as
prescribed by the Federal Bureau of Statistics.
SIM card—A removable micro-card that contains a subscriber identity module that securely stores the electronic
codes used to verify subscribers’ identities on mobile
phones and computers.
Urban households—Urban households are defined
according to their location in urban enumeration areas
as prescribed by the Federal Bureau of Statistics.
Village-level saving groups—Members deposit small
amounts of money with an informal savings group for a
year. At the end of the year, they share the money they
paid into the account.
Methodology
The InterMedia FITS household studies in Pakistan,
Tanzania and Uganda are three-year panel studies
consisting of annual waves of face-to-face household
surveys (N=4,940 households in Pakistan), and three
telephone mini-surveys per year with the same households, conducted between each annual wave.
The core of the wave questionnaire covering households’ financial behaviors is roughly the same in all
three countries to allow for cross-market comparisons.
Some sections and questions, however, are tailored to
the local context to allow for a more accurate assessment of the development of m-money in different
financial, regulatory and socio-cultural environments.
This report presents the findings of the first wave survey
in Pakistan conducted May-September 2012. Separate
reports address the first wave surveys in Tanzania and
Uganda.
A Note on Data Analysis and Reporting
The InterMedia FITS surveys are designed to collect trend data primarily about m-money use
and overall financial behaviors at the household level - that is, the data represents collective usage
patterns for entire households. The households for this panel were selected from a random sample frame and thus their usage and behavior patterns are representative of usage and behavior patterns of Pakistani households in general.
In addition to the household-level data, the surveys gather data on behaviors and experiences
with m-money services, based on interviews with individual over-the-counter (OTC) users
among members of the selected households. According to the study design, one OTC user was
selected for the interview in each household with OTC users. In households with more than one
OTC user, the user with the most recent birthday was interviewed. The results of these individual
interviews are not representative of individual m-money users throughout Pakistan because the
interviewees were not chosen from a random sample frame.
This report contains no analysis of behaviors and experiences of registered users of any of the
four m-money products because the number of registered users was not sufficient for valid
analysis (n=17).
Throughout the report, the amounts of transaction costs, total amounts sent or received, and various other expenditures are based entirely on the head of household’s reporting about the activities of every member of the household. These numbers, therefore, should be treated as estimates
rather than exact numbers.
InterMedia
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Pakistan Country Profile
General Environment
Pakistan is located in Southern Asia and borders the
Arabian Sea and four countries: India, China, Iran and
Afghanistan. The country is divided into four provinces:
Baluchistan, the Khyber-Pakhtunkhwa (KPK), Punjab
and Sindh. There are also the Federally Administered
Tribal Areas (FATA), the Federally Administered Northern Areas (FANA), and the Islamabad Capital Territory.4
The state of Pakistan emerged in 1947 as a result of the
partition of the Indian subcontinent. In March 1971,
the civil war led to a split between East and West Pakistan and the establishment of two new states: Bangladesh and Pakistan, respectively.5
Pakistan’s population is estimated to be about 190 million6 with approximately one-quarter of Pakistanis living below the poverty line (i.e., below $2 per day), and
about one-half considered illiterate.7 Only 10 percent of
the population reports having a bank account.8
Telecommunications environment
With the help of foreign and domestic investment,
Pakistan continues to grow its mobile sector. In 2011
and 2012, the mobile subscriber base increased by an
estimated 10 percent annually. Currently, the number
of mobile subscribers is estimated at about 120 million.
Ninety percent of the population lives within areas with
mobile-network coverage and most have access to a
mobile phone.9
The five leading Mobile Network Operators (MNOs)
—Mobilink, Telenor, Ufone, Warid and Zong10—are
actively competing for a greater share of the subscriber
base and revenue. Pakistan does not currently have a 3G
network and growth in the country’s fixed-line (dial-up,
DSL, broadband and cable) internet remains sluggish.11
The Pakistani mobile money (m-money) market offers
four products: Telenor Easypaisa, United Bank Limited
(UBL) Omni, Ufone Upayments and Muslim Commercial Bank Limited (MCB) Mobile. In addition,
Mobilink offers SMS (text) banking to Citibank, MCB,
Standard Chartered Bank (SCB), UBL and Emirates
Global Islamic Bank (EGIB) account holders. Another
8
Mobile Money in Pakistan: Use, Barriers and Opportunities
Mobilink financial service, Citibank Mobilink Genie,
allows Citibank customers to pay mobile phone bills,
buy airtime, and pay utility bills using their credit cards.
Telenor Pakistan and Tameer Micro Finance Bank
launched Easypaisa in October 2009 as a financial
inclusion vehicle for underserved households in Pakistan. With more than 20,000 m-money agents around
Pakistan, Telenor Easypaisa is the mobile banking service with the broadest coverage. Through its m-money
services, customers can pay utility bills, send/receive
money internationally and domestically, donate to
charities, top-up a prepaid mobile connection, pay for
airline tickets, and receive their pension income. Telenor Easypaisa offers over-the-counter (OTC) services,
which allow customers to use their own mobile handsets to make financial transactions through certified
merchants.12
UBL Omni offers mobile financial services at distribution centers at neighborhood markets in 600+ cities
across Pakistan. As with Telenor, the services are primarily aimed at assisting the unbanked population by
allowing them to use their mobile phone numbers as
account identifiers. UBL Omni customers can withdraw and deposit cash, make utility bill payments,
transfer money domestically and internationally, pay
mobile phone and other bills, and purchase airtime.
Recently, UBL also introduced an ATM card for its
Omni customers.
Ufone Upayments is the mobile banking service offered
by Ufone in collaboration with Habib Bank Limited
(HBL) and Summit Bank. Customers can inquire about
and pay utility bills, buy and pay for prepaid and postpaid airtime purchases, check HBL or Summit Bank
account statements, and transfer money to any bank
account in the Habib Bank and Summit Bank networks.
MCB customers can check their bank-account balances, receive mini-statements, transfer funds, purchase
mobile top-ups, pay mobile phone and utility bills,
make MCB Visa credit-card payments or charitable
donations, or buy insurance.
Mobile money adoption
Mobile money adoption at the
household level
Figure 1. Median monthly spending on various
essentials
Based solely on the reported rates of access to
mobile technologies, Pakistan has great potential for m-money uptake. Most Pakistani households (89 percent) have access to a mobile phone
and own a SIM card (88 percent). The rates are
equally high among rural, unbanked and poor
households.
However, the survey findings show that currently
only 5 percent of households have at least one
m-money user.
Based on the findings, an average family in Pakistan
spends close to the same amount on mobile phone airtime per month as it does on clothing, but considerably
less than what it spends on food and water (Figure 1).
Almost all households own a SIM card and either own
or can borrow a mobile phone. While mobile phone
access and SIM card ownership increase slightly with
income level, 88 percent of poor households, living on
less than $2 a day, can access a mobile phone and 86
percent own a SIM card (Figure 2).
Of the 5 percent of households that have an m-money
user, most use over-the-counter (OTC) services with-
Type of expenditure
PKR
USD
Medical care
0.00
0.00
School fees and other education
expenses
66.67
0.70
Clothing (men, women, children) and
footwear
200.00
2.09
Mobile phone airtime
300.00
3.13
Home heating: kerosene, firewood,
charcoal
500.00
5.10
Food and water
13,332.00
139.24
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
out registering for an m-money account. Only 17
households (0.3 percent) report at least one registered
m-money user (Figure 3).
Among households using m-money services, 85 percent
have only one m-money user, 10 percent have two users
and 5 percent have three to six m-money users.
Household m-money use does not differ by rural
and urban status or level of household consumption,
but banked households are slightly more likely to use
m-money than unbanked households: 11 percent versus
Figure 2. Access to mobile communications, by household demographics
89% 88%
86% 85%
88% 88%
88% 86%
All households
(N=4,940)
Rural
(n=3,369)
Unbanked
(n=4,477)
Consumption,
below $2 a day
(n=4,120)
■ Have or can borrow a mobile phone
96% 96%
98% 98%
Consumption,
$2-$4 a day
(n=679)
Consumption,
above $4 a day
(n=129)
■ Have a SIM card
Source: InterMedia FITS study of households in Pakistan, April-May 2012; N=2,980.
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9
5 percent among unbanked households (Figure 3). The
fact that unbanked households are underrepresented
among households using m-money is not necessarily an
indication of their lack of willingness to adopt m-money
in the future. A number of East African countries
whose populations use m-money have shown that early
m-money adopters are generally wealthier, more urban,
and more likely to be banked than nonusers. Over time,
however, the service spreads deeper into poor, unbanked,
and rural segments of the population.13
Mobile money adoption
at the individual level
Access to mobile services and the use of m-money
differ significantly by demographic characteristics of individual household members. Male
Pakistanis, 35 to 54 years old, and people with
a secondary education or higher, are most likely
to have access to mobile technology and use
m-money services.
The rates of access to, and ownership and use
of, mobile phones and m-money are the lowest
among females and older Pakistanis (age 55+).
Males are three times as likely to have a mobile phone or
a SIM card as females. Similarly, Pakistanis aged 35 to 54
are twice as likely to own a mobile phone or SIM card as
those aged 55 and older. In addition, mobile phone and
SIM-card ownership increase with education.
The rates of m-money use by individual household members follow the same demographic pattern as that shown in
Figure 4. In particular, 95 percent of mobile money users
are males. M-money adoption and use also varies considerably depending on age and educational attainment.
The Pakistani m-money services market
The current Pakistani m-money market is dominated by Telenor. Most m-money users (registered
and unregistered) use Telenor Easypaisa, either
exclusively or in combination with other providers. UBL Omni is the second most frequently
mentioned m-money product, used by 7 percent
of households that use m-money. Ufone Upayment and MCB Mobile each has a marginal share
of the market.
Telenor Easypaisa is the dominant product in the Pakistani m-money market; 89 percent of households with
m-money users use Telenor Easypaisa exclusively and an
additional 3 percent use it in combination with other
m-money products.
• The urban/rural breakdown and poverty status of
Telenor Easypaisa users closely match the characteristics of all households in the sample. Sixty-five percent
are located in an urban area and 80 percent live below
the poverty line.
• Telenor Easypaisa users are somewhat more likely to
have a bank account compared with all households in
the sample: 16 percent versus 9 percent, respectively.
• Three-quarters of households using Telenor Easypaisa
live in Punjab; one-quarter live in Sindh.
Figure 3. M-money use by household demographics
7% 7%
5%
4%
5%
4%
0.3%
0.3%
All households
(N=4,940)
Rural
(n=3,369)
■ M-money user in a household
5%
5%
4%
0.3%
0.3%
Unbanked
(n=4,477)
■ OTC user in a household
4%
Consumption,
below $2 a day
(n=4,120)
Consumption,
above $2-$4 a day
(n=679)
■ Registered m-money user in the household
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
10
0.6%
Mobile Money in Pakistan: Use, Barriers and Opportunities
6%
5%
0%
Consumption,
above $4 a day
(n=129)
Figure 4. Access to mobile technologies and use of m-money services among selected members of
households, by demographic characteristics
96% 95%
67%
56%
50%
38%
29%
Male
58% 55%
52%
Female
41%
Ages
15–34
■ Have or can borrow a mobile phone
Despite having
access to mobile
technology and
services, females
and older
Pakistanis (55+)
are the least likely
among demographic groups to
use m-money
services.
41%
37%
32%
23%
Ages
35–54
Age 55+
36% 33%
19%
No formal
education
Primary
education
Secondary Post-secondary
education
education
■ Have a SIM card
95%
69%
52%
43%
Male
Female
14%
17%
No formal
education
Primary
education
6%
5%
Ages
15–34
Ages
35–54
Age 55+
Secondary
education+
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
Figure 5. Market share of mobile money service
providers among households with at least one
m-money user (n=256)
Figure 6. Percentage of Pakistani households who
use m-money (n=256), by region
KPK
(n=680)
0%
Ufone only, 1%
MCB only, 0.4%
2+ providers, 3%
UBL only, 7%
Telenor only, 89%
Punjab
(n=2860)
7%
Baluchistan
(n=250)
1%
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
Sindh
(n=1150)
5%
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
InterMedia
11
Figure 7. Demographic profile of households with
over-the-counter users
Consumption,
more than
$2 a day
Banked
22%
17%
21%
9%
Urban
OTC users are
more likely to be
urban and banked
than those in
surveyed
households in
general. They also
are better off
financially.
40%
33%
■ Households with OTC users (n=234)
■ All households (N=4,940)
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
M-money use patterns
Most m-money users in Pakistan (83 percent) use
the OTC option to conduct m-money transactions. OTC m-money transactions are conducted
by an agent on an m-money user’s phone.
• OTC customers have no account and thus no mechanism to store, access or accumulate funds. Without
an account, customers cannot be connected by direct
deposit or automatic withdrawal to other institutions
(e.g., employers, insurance providers) who might wish
to establish ongoing relationships with them. OTC
is thus a “pure-play” payments tool which offers no
vehicle to deliver savings, insurance, or other structured financial products.
• Households with OTC users are more likely to be
urban, banked and well-off than sampled households
in general.
• Based on individual interviews with OTC users, most
(85 percent) use mobile money once a month or less.
However, more than one-half (55 percent) noticed
their frequency of use had increased since they first
started using mobile money.
12
Mobile Money in Pakistan: Use, Barriers and Opportunities
Barriers to and motivators for
m-money adoption and registration14
All households (n=4,940)
The study revealed that many OTC users feel
no need to register an m-money account as they
Households
OTC
(n=234)
have access to the services
they with
need
tousers
make
transactions. Insufficient understanding of the
services and a limited number of m-money
users in respondents’ social networks appear to
be additional barriers to m-money registration
among OTC users and m-money adoption among
nonusers.
• OTC services solve a key problem or “pain point,” in
that they give customers the ability to transfer money
instantaneously (the same solution that fueled initial m-money uptake in East Africa). For this reason,
OTC services also have proven popular in Pakistan
where other money transfer options are of limited
utility. However, it appears that the use of OTC services makes it harder to launch a successful accountbased service because the value proposition is less
clear: Why sign up for a new product that will require
learning how to use the services when people can
already pay bills and transfer money by simply walking up to an agent and giving him/her the funds?
Educating OTC users on the practical uses of registered m-money accounts might stimulate viral
adoption of m-money by creating advocates of the
services, who are capable of educating and persuading others within their respective social networks to use m-money.
When asked why they did not register for an m-money
account, most OTC users15 (59 percent) said they
did not see the need to do so as the services available
through agents served their needs (Figure 9).
Some OTC users said they did not know they could
register, indicating insufficient knowledge/understanding of m-money services and m-money registration.
Among nonusers of m-money, insufficient knowledge
about the service was the most common reason for not
using mobile money. Almost one-half of nonusers said
they either were not aware of the services or did not
understand them (Figure 10).
Figure 8. The top five sources of information about
m-money among OTC users (n=234)
Recommendation
from another
person
Billboard
Do not need
to register
69%
Television
Newspaper
Figure 9. The top five reasons OTC users have not
registered for an m-money account (n=234)
20%
7%
3%
Radio 1%
59%
Nobody among my friends and
family is a registered user
12%
Did not know it
was possible
12%
Friends and family
play an important
role in raising
awareness of
m-money services
and stimulating
registration.
Did not have
necessary document
6%
Do not feel it is secure
5%
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
The survey data suggest that a personal social network
of OTC users plays an important role in m-money
uptake both as a driving force and as a potential barrier
to registration.
OTC users’ perceptions of m-money underlined
insufficient clarity about the practical applications
of m-money services. Most OTC users (88 percent)
described mobile money primarily as a way to send and
receive money. A small portion viewed it as a way to
make payments (10 percent), while very few described
it as a way to store money (2 percent).
• One in five OTC users first learned about m-money
through a recommendation from another person,
although a larger percentage of OTC users were
informed by the media, particularly TV. At the same
time, the absence of registered m-money users within
their personal social networks (friends or relatives of the
respondents) was the second most frequently cited reason
OTC users did not register for an m-money account.
• Among nonusers, most viewed m-money as primarily a way to send and receive monetary remittances.
Smaller percentages described it as a way to save
money, make non-remittance payments, or perform
other financial operations. Thirteen percent of nonusers thought m-money did not offer any of these
financial operations.
Ninety-eight percent of OTC users said they are either
very likely or somewhat likely to recommend mobile
money to others. The same percentage is very or somewhat
likely to continue using m-money services in the future.
Figure 10. Reason nonusers do not use m-money services (n=4,684)
40%
34%
Do not know
about it
Do not need it
(do not send or
receive money)
7%
6%
5%
Do not
understand it
Do not own
a mobile phone
No network
available
3%
Too
complicated
5%
Other
reasons
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
InterMedia
13
Households’ financial routines
and the role of mobile money
When reporting on their financial activities in
the past six months, households with m-money
users were more likely to say they sent or received
remittances, saved money and owned a type of
insurance than households with no m-money
users. They were also more likely to be banked
(Figure 11).
Households with m-money users were three times more
likely to report sending or receiving remittances in the
past six months (30 percent) than households with
no m-money users (11 percent). Households that use
m-money services also are more likely to own insurance
and have savings.
Ninety-six percent of households with m-money users
and 94 percent of households without users reported
sending at least one non-remittance payment, such as
a utility or tax payment, in the past six months, while
only 10 percent in each group received any type of
payment, including wages. Reports on money-lending
practices were scarce and might not reveal the potential difference between households with and without
m-money users.
Remittances: Sending and receiving
patterns
The current Pakistani remittance market is dominated by non-monetary/in-kind transactions.
Twelve percent of all households16 sent or received
remittances of any type (including money, food
or other goods) in the past six months; 4 percent
sent or received money.17 The example of Kenya,
however, shows that the relatively small size of the
market might not accurately reflect the demand
for safe and affordable financial services that can
accommodate remittances.18
Households that use m-money were more likely
to send and receive monetary remittances (18 percent and 11 percent, respectively) compared to
households that don’t use m-money (1 percent,
each).
Figure 11. Households’ financial activities in the past six months
Basic Financial Activities
Regardless of their m-money status, very few
Pakistani households engage in advanced
financial activities.
96% 94%
46%
39%
21%
9%
13%
Enhanced Financial Activities
20%
8%
10% 10%
Sent
Received
Sent non- Received nonremittances remittances remittance remittance
payments payments
■ Households with m-money users (n=256)
Saved
money
9%
5% 2%
3% 5%
Banked
Owned
insurance
Owed
money
1% 0.4%
Was owed
money
■ Households with no m-money users (n=4,684)
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
14
with no m-money
users
Mobile Households
Money in Pakistan:
Use, Barriers
and(n=4,684)
Opportunities
Households with m-money users (n=256)
Households with no m-money users (n=4,684)
Households with m-money users (n=256)
Common methods of sending and receiving
monetary remittances
Distances for monetary remittances
sent or received
A slim majority (53 percent) of households that
sent or received monetary remittances in the past
six months19 used hand-delivery by themselves or
by friends/family members. Two in five households
used an m-money account to deliver remittances.
The distance between senders and recipients of
remittances appeared to be related to the choice of
remittance-delivery methods. Seventy-three percent of hand-delivered remittances were sent to
or received from less than 10 km away. A similar
percentage (78 percent) of remittances delivered
via an m-money account were sent to or received
from at least 50 km away (Figure 13).
Thirty-eight percent of all households that sent20 and
44 percent of households that received21 monetary
remittances in the past six months used an m-money
account to deliver money.
The household account was mostly used for sending
remittances (23 percent of sending households) and an
agent’s account was utilized more frequently for receiving remittances (29 percent of receiving households).
• When sending monetary remittances, 14 percent
of sending households also used an agent’s account
and 1 percent used an account of a friend, relative or
acquaintance.
• When receiving monetary remittances, 15 percent of
receiving households used a household account, few
households used an account of a friend, relative or
acquaintance.
Hand-delivery was the most common remittance-delivery method. Fifty-five percent of households that sent
and 44 percent of households that received monetary
remittances in the past six months had remittances
delivered by a member of the household or a friend.
All remittances reported by households in the past
six months were to destinations within Pakistan.
Choice of different remittance methods
Most households that sent or received remittances
in the past six months22 used a specific method
because it was easy to use (cited by 66 percent),
safe (21 percent) or fast (8 percent).
While safety is one of the important concerns, only one
household said their remittances were not delivered in
full.
There were only five cases where both remittancesending and remittance-receiving households had
a registered m-money account. In all of these, an
m-money account was used to deliver monetary
remittances.
Figure 12. Top three methods of sending and receiving monetary remittances in the past six months
Households that received
cash remittances (n=66)
Households that sent
cash remittances (n=114)
■ Hand-delivered (by self or by friend)
44%
15%
55%
■ M-money household account
29%
23%
12%
14%
8%
■ M-money agent’s account
Households with m-money
users were more likely to
engage in remittancesending activities than
households with no users.
M-money was among the
top two methods of
remittance-delivery.
■ Other
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
InterMedia
15
Figure 13. Distance travelled by remittances sent or received using hand-delivery and an m-money account
47%
Hand-delivery
45%
M-money
33%
26%
22%
15%
6%
3%
less than 2 km
■ M-money account (n=163)
2-9.9 km
5%
10-49.9 km
1%
50-199.9 km
0%
200+ km
Abroad
■ Hand-delivery by self or by friend (n=140)
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
Figure 14. Top three reasons for choosing a delivery
method to send or receive monetary remittances
71%
62%
Based on households’ reports of the most recent
monetary remittances they sent or received,
the median monetary amounts transferred via
m-money, delivered in person, or using a bus
ranged between $20 and $47 (Figure 15).
Households that received monetary
The costs associated with m-money transfers
Households that sent monetary rem
might be considered a disadvantage
since other
common delivery methods (i.e., hand-delivery
and delivery by bus) are reported to be free.
25%
15%
7%
Easy
Safe
9%
Fast
■ Households that sent monetary remittances (n=114)
■ Households that received monetary remittances (n=66)
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
Figure 15. Cost of sending and receiving monetary remittances using selected delivery methods
(n=171 households)
Last three remittances (aggregate amounts) sent/received
Delivery method
% of households
using this method
Amount sent/received
(median)
All-inclusive cost of delivery
(median)23
PKR
$
PKR
$
Hand-delivery (by self or by friend)
53%
2,000
20.76
0
0
M-money delivery via household’s account
(any provider)
19%
3,125
32.44
240
2.49
M-money delivery via an agent’s account
(any provider)
19%
4,000
41.53
100
1.04
Bus delivery with a friend or a driver/courier
5%
4,500
46.72
0
0
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
16
Mobile Money in Pakistan: Use, Barriers and Opportunities
Figure 16. The top three reasons for the last three
monetary remittances sent and received using an
m-money account
Figure 17. The top three reasons for the last three
monetary remittances sent and received using
hand-delivery
Households tend to use m-money and hand-delivery for different types of remittances
39%
34%
32%
24%
28%
22%
26%
18%
24%
21%
17%
12%
Business
To pay
No
health particular
expenses reason
Regular
No
Business
support particular
reason
■ Monetary remittances sent (n=95)
■ Monetary remittances received (n=68)
Regular
support
Help for
No
marriage particular
reason
Regular
No
Emergency
support particular
reason
■ Monetary remittances sent (n=102)
■ Monetary remittances received (n=38)
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
Common reasons for
remittance-related activities
Common groups of remittance
senders and recipients25
Remittances delivered using m-money tend to
have somewhat different purposes than remittances delivered by hand. In particular, remittances sent using an m-money account24 are more
likely to be for business reasons, while hand-delivered remittances are likely to be a part of regular
financial support.
The most common groups of senders and recipients of hand-delivered remittances, and remittances sent/received using m-money are the same:
friends, peers, acquaintances, or members of an
extended family permanently living away from
the household.
Remittances also are used to help other households cope
with financial hardships.
Seventy-two percent of money transfers among friends,
peers and acquaintances26 were sent for no specific reason. The second and third most common purposes were
informal lending (6 percent) and business (3 percent).
• For example, 26 percent of hand-delivered remittances were sent to help with marriage expenses. Eighteen percent of remittances sent via m-money services
were intended as a help in paying health expenses.
Ten percent of friends, who exchanged remittances,27
used m-money accounts to deliver money.
Aggregated responses of all households engaged in
remittance-related activities, show that most monetary
remittances were sent or received for no specific reason.
• About one in eight remittances were sent or received
as a part of informal lending practices.
InterMedia
17
Most non-remittance payments were hand-delivered. Other types of money-delivery, including
m-money, were used by 1 percent (or fewer) of
households.
Figure 18. The top three groups of monetary
remittance recipients and senders
Friend, peer,
acquaintance
43%
28%
Neighbors
Other relative
permanently living away
All households that reported a payment in the past six
months sent or received money.
20%
Friend, peer,
acquaintance
67%
Other relative
permanently living away
Parent
permanently away
25%
More households with m-money users than households
with no m-money users made or received non-remittance payments in the past six months.
• Households with m-money users were likely to send
or receive fewer payments than households with no
users. For example, 39 percent of households with
m-money users sent more than six payments in the
past six months compared with 56 percent of households with no m-money users.
3%
■ Monetary remittances sent (n=205)
■ Monetary remittances received (n=121)
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
Non-remittance payments: Sending
and receiving patterns
Generally, the senders and recipients of payments as
well as the reasons for the most recent payments were
similar for all households, regardless of their m-money
status.
Non-remittance payments appear to provide the
best current opportunity for m-money expansion. Ninety-four percent of surveyed households
reported sending at least one non-remittance payment and 10 percent received payments in the
past six months.
• Of all non-remittance payments sent by households
in this survey,28 most were made in response to either
a fee-based bill (tax, fine or fee) or a non-fee bill (not
tax, fine or fee). School and government were the two
most frequently named recipients of non-remittance
payments.
Figure 19. Top-three groups of payment recipients
and senders
Figure 20. The top three reasons for payments made
and received in the past six months
The top three groups of
payment recipients and senders
72%
Government
19%
Employer
Government
program
Government
Utility
company
School
4%
69%
24%
The top three reasons for
payments made and received
Government
is the leading
sender and
recipient of
payments,
mostly as
wages and
payments for
non-fee bills,
respectively.
Wages
Benefits 3%
Payment
for goods 2%
Pay a
non-fee bill
Pay a bill (tax,
fine or fee)
5%
■ Payment received (n=1,429)
8%
Rent 1%
■ Payments sent (n=13,980)
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
18
94%
Mobile Money in Pakistan: Use, Barriers and Opportunities
91%
• Seventy-two percent of non-remittance payments
received by households in the past six months29 were
money transfers from the government (72 percent,
including wages and benefits) or a governmentsponsored program (4 percent). Employers were the
second most frequently named source of non-remittance payments (19 percent of all payments received
by the households). Almost all reported payments
were wages (94 percent) with only a few households
reporting receiving benefits or payments for goods.
Based on the reports of the households engaged in
payment-related activities in the past six months, there
were negligible costs associated with sending/receiving money regardless of which type of money-delivery
they used (Figure 21). In addition, all payment-delivery
methods appear safe as not a single household reported
their payments lost or stolen.
m-money. In particular, households with m-money
users are more likely to save with financial institutions and with other people than households without
m-money users (Figure 22).
• Households with no m-money users are equally likely
to save in a hiding place or with a community/neighborhood group; but the likelihood of them saving
with a financial institution or another person is low.
• For both groups, a hiding place is one of the two
most common savings instruments.
The safety of household savings does not appear to be
a major concern. Of households that save money, only
2 percent had lost some money from their savings or
had it stolen in the last 12 months. None of the savings
instruments stood out as the most safe or most risky.
Mechanisms for household savings
Insurance and loans
Two in five Pakistani households save money;
the majority uses only one or two savings instruments. Households that use mobile money
are more likely to save; but using an m-money
account for savings is not common (0.4 percent of
households using m-money).
Among households that engage in lending-related
activities (5 percent of all surveyed households),
45 percent use m-money for money transfers,
mostly to make payments on the money they borrow. Among the lenders who received payments
via m-money, the top three were their immediate
family (cited by 40 percent of borrowing households that used m-money services in relation to
their loans), employers (28 percent) and shopkeepers (16 percent).
Aside from being more likely to report savings, households with m-money users also use different approaches
to saving compared with households that do not use
Figure 21. Costs of sending non-remittance payments via selected delivery methods (n=4,686 households)
Last three non-remittance payments (aggregate amounts) sent
Delivery method
% of households
using this method
Total amount sent (median)
All-inclusive cost of
sending (median)30
PKR
$
PKR
$
Hand-delivery (by self or by friend)
92
700
7.3
0
0
M-money delivery via an agent’s account
(any provider)
1
1,000
10.4
0
0
Bus delivery with a friend or a driver/courier
1
800
8.4
0
0
Source: InterMedia FITS study of households in Pakistan, April-May 2012; N=4,940.
InterMedia
19
Figure 22. Savings instrument used by households, by type of m-money user in the household
Few households used an m-money
account for savings because the
number of registered accounts was
small.
Households with m-money users
were equally likely to save in a hiding
place or with a financial institution.
46%
39%
22%
Any type of savings
instrument
18%
Hiding place
■ Households with m-money users (n=256)
22%
9%
With a financial
institution
14% 17%
Community level
savings
14%
6%
With another
person
0.4% 0.1%
M-money account
■ Households with no m-money users (n=4,684)
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
M-money does not play a large role in the insurance sector. Of all households that owned insurance at the time of the survey,31 11 percent
delivered payments via an m-money account.
General patterns of borrowing behaviors of surveyed
households show that most borrowing happens at a
local level with loans coming from either employers or
immediate family (Figure 24).
Few households in Pakistan engage in loan and insurance activities. Currently, 2 percent of surveyed households own any type of insurance and 5 percent of all
surveyed households reported any credit-related activity. Significantly more households borrow (5 percent)
money than lend (1 percent) money.
Among the households that borrowed or lent money
in the six months prior to the survey,32 45 percent used
m-money to transfer loans and/or payments: 2 percent
used m-money to lend money/receive payments and 43
percent to borrow money/make payments.
• Households that owned insurance at the time of the
survey were more urban and financially better off than
the average household in the sample, while households that had an unpaid (or recently paid) debt were
more likely to be disadvantaged—rural, poor and
unbanked—than the average household (Figure 23).
• Households with m-money users were more likely to
report having insurance. Loan activity did not differ
by households’ m-money status.
20
Mobile Money in Pakistan: Use, Barriers and Opportunities
• Almost all households that reported an unpaid debt
received their loans in person (93 percent). However,
almost one-half (46 percent) used m-money to send
payments to the lender—the same percentage as those
who delivered payments in person.
• The frequency of loan payments was similar for both
households that hand-deliver their payments and
those who use m-money for loan payments
(Figure 25).
Figure 23. Demographic characteristics of households that owned insurance or had an unpaid loan at the
time of the survey
Households with insurance were less likely and households with an unpaid debt
were more likely to be rural, poor, unbanked and have no m-money users.
83%
91%
95%
89%
95% 98%
89%
79%
67%
60%
46%
All households (n=4,940)
■ Rural
Households with an unpaid loan (n=237)
■ Poor ( living on less than $2 a day)
■ Unbanked
48%
Households with insurance (n=119)
■ No m-money users
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
Figure 24. The patterns of activities related to loans received/extended in the past six months
(n=237 households that borrowed money)
PROXIMITY OF THE TOP
THREE LENDER
LOCATIONS
This village/town, 80%
This district, 10%
This region, 4%
TOP THREE LENDERS
Employer, 39%
Immediate family, 33%
Hire purchase, 10%
TOP THREE METHODS
FOR SENDING PAYMENTS
In person, 46%
M-money (any account), 46%
Bank transfer, 0.4%
TOP THREE METHODS
FOR RECEIVING LOANS
In person, 93%
M-money (any account), 6%
Bank transfer, 2%
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
Figure 25. How often do you make a payment [on your loan]?
Most households repay a loan in one single
payment regardless of whether they pay
in-person or via an m-money account.
61%
59%
30%
19%
20%
1% 1%
Daily
3%
Weekly
4%
1%
2%
Monthly
■ Households that hand-deliver loan payments (n=110)
Annually
One single payment
0%
Other
■ Households that use m-money to deliver loan payments (n=108)
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
InterMedia
21
ECONOMIC SHOCKS AND HOW
HOUSEHOLDS RESPOND TO THEM
Twenty-eight percent of all surveyed households
reported at least one economic shock in the six
months prior to the survey. Receiving or sending
remittances in response to an economic shock,
however, was equally rare among households with
and without m-money users.
Among households that experienced economic
shocks,33 91 percent experienced one shock, 8 percent
experienced two, and 1 percent reported experiencing
three or more economic shocks.
The unspecified illness of a household member was the
most frequently cited economic shock. The percentages
of households that reported any other economic shock
were negligible at 2 percent or lower (Figure 26).
Of households that experienced an economic shock, 2
percent gained money as a result of a positive shock,
and 41 percent needed money to respond to a negative
shock. Fifty-eight percent of households that experienced an economic shock responded by saying they were
not sure of the effect the shock had on their budgets.
Negative economic shocks
Receiving remittances in response to a negative
economic shock is very rare. Only one household
with m-money users (3 percent) and nine households without m-money users (2 percent) received
remittances to help them cope with the loss of
money. Remittances, however, had the third highest median response value at 1,050 PKR ($10.90)
among all possible responses to negative economic
shocks.
Depleting the household’s savings was the most frequently chosen response to a negative economic shock.
More than one-third of households affected by negative
economic shocks were forced to reduce their expenditures, including spending on various necessities (28 percent) and food expenditures (11 percent).
22
Mobile Money in Pakistan: Use, Barriers and Opportunities
Figure 26. Most frequent economic shocks
(% of all surveyed households)
Illness of a
household member
Birth in the
household
23%
2%
Livestock died
1%
Death of a
household member
1%
Accidental injury
1%
Source: InterMedia FITS study of households in Pakistan,
May-September 2012; N=4,940.
• Fourteen percent of households that reported negative
economic shocks borrowed money from other people,
including relatives and friends, to cope with negative
shocks; about one in 10 households prayed.
The three responses with the highest reported median
monetary value were the removal of children from
school (saved 5,000 PKR/$51.30 in tuition costs), the
employment of a previously non-working member of
a household (a one-time gain of 2,750 PKR/$28.21),
and remittances from other people (a one-time gain of
1,050 PKR/$10.90).
Limited use of m-money during times of financial hardships signals a missed opportunity for m-money providers to help poor households mitigate the ill effects
of negative financial shocks. As an example, a national
survey in Kenya showed that access to a digital payment system allowed households to gain financial support from larger informal networks.34 The survey found
M-PESA users were able to fully absorb major negative
Figure 27. The top five responses to negative economic shocks
(n=569 households that reported a negative shock)
43%
28%
14%
Spent cash savings
Decreased other
expenditures
Borrowed money from family,
friend and other sources
11%
Decreased
expenditure on food
8%
Prayed
Source: InterMedia FITS study of households in Pakistan, May-September 2012; N=4,940.
shocks to their income (e.g., severe illness, job loss or
harvest failure) without any reduction in household
consumption. In contrast, statistically comparable
households that weren’t connected to M-PESA experienced, on average, a 6 to 10 percent reduction in consumption in response to similar shocks.35
In addition, households with access to M-PESA were
more likely to: receive a remittance; receive a larger
total amount of remittances; receive funds from a larger
network of senders; and receive funds from senders
who are located further away. Digital payments thus
appeared to improve risk-sharing across households.36
Positive economic shocks
Among households that gained money as a result
of a positive economic shock, no household sent
gifts or remittances to other people or households. About one-third each increased savings or
increased expenditures on various essentials.
Among all possible ways to spend extra money gained
as a result of positive economic shocks, working less
required the highest median investment at 5,000 PKR
($51.30). Increased spending on food and medications
were the second and third highest investments at 625
PKR ($6.41) and 250 PKR ($2.56), respectively.
InterMedia
23
Conclusions
Although most households in Pakistan have access
to mobile phones and SIM cards, only 5 percent use
m-money. With most users choosing over-the-counter
(OTC) services, m-money registration is low at 0.3 percent. According to the survey findings, there are several
reasons for the limited use of m-money.
Among nonusers these include low awareness and their
lack of understanding of m-money’s practical applications. OTC users do not see the advantage of a registered account over using an agent’s services. They also
demonstrate an insufficient understanding of m-money
services.
• Currently, most OTC users and nonusers of
m-money perceive m-money as a service for sending
or receiving informal cash transfers. Few OTC users
and nonusers know that m-money can be used to save
money, make non-remittance payments or perform
other financial activities. Subsequently, few households with m-money users take advantage of the full
range of m-money services.
24
Mobile Money in Pakistan: Use, Barriers and Opportunities
• OTC users also seem to rely on members of their
social networks to recommend the use of m-money
services.
TV advertisements appear to have good reach for providing initial information about m-money services. In
addition, OTC users’ satisfaction with m-money services and their willingness to recommend them to other
people contribute to the success of word-of-mouth
promotion of m-money.
Households that use m-money are more likely than
households with nonusers to engage in a large number
of financial activities. However, their use of m-money
is currently limited to money transfers within their network of friends and relatives, which might be a reflection of the informal economy in Pakistan.
endnotes
FinMark Trust (2009): FinAccess National Survey
2009: Dynamics of Kenya’s Changing Financial Landscape.
1
FSD-Kenya (2007a and 2009a) http://www.fsdkenya.org/insights/10-10-13_FSD_Insights_M-PESA_
issue_01.pdf.
2
3
Ibid.
https://www.cia.gov/library/publications/the-worldfactbook/geos/pk.html.
4
https://www.cia.gov/library/publications/the-worldfactbook/geos/pk.html#top.
5
https://www.cia.gov/library/publications/the-worldfactbook/geos/pk.html#top.
6
http://www.fco.gov.uk/en/travel-and-living-abroad/
travel-advice-by-country/country-profile/asia-oceania/
pakistan/?profile=today.
7
Global Findex 2011, http://microdata.worldbank.org/
index.php/catalog/1226/datafile/F1.
8
9
Ibid.
http://www.indexmundi.com/pakistan/cell-phonecompanies-in-pakistan.html.
10
16
n=567
17
n=171
FSD-Kenya (2007a and 2009a) http://www.fsdkenya.org/insights/10-10-13_FSD_Insights_M-PESA_
issue_01.pdf.
18
19
n=171
20
n=114
21
n=66
22
n=171
Cost of delivery includes fees for sending and collecting the money as well as transportation costs for both
sender and recipient of a remittance.
23
24
n=163
The “remittance recipients” question is asked of those
who sent remittances. The “remittance senders” question is asked of those who received remittances.
25
26
n=1,655
27
n=358
28
n=13,980
29
n=1,429
http://www.budde.com.au/Research/Pakistan-Telecoms-Mobile-Broadband-and-Forecasts.html.
30
http://telenor.com/investor-relations/company-facts/
business-description/telenor-pakistan.
31
n=119
32
n=252
33
n=1,376
11
12
Suri and Jack (2011). “Risk sharing and transaction
costs: Evidence from Kenya’s mobile money revolution.” Working Paper.
13
The analysis in the section on motivators for and barriers to the adoption of m-money services is based on
the results of the interviews with individual OTC users,
one per each household with OTC users. In households
with more than one OTC user, one user was selected
for an interview using a last-birthday method. The
number of registered users (n=17) was not sufficient for
a valid analysis.
14
n=234 randomly selected individual members of the
surveyed households. The findings are not representative of the individual users in Pakistan.
15
Cost of delivery includes only the fees for sending the
money for a non-remittance payment.
Suri and Jack (2011). “Risk sharing and transaction
costs: Evidence from Kenya’s mobile money revolution.” Working Paper.
34
Using regression techniques, the researchers perform
several tests to rule out alternative explanations (like
higher income) which are correlated with M-PESA
usage.
35
Suri and Jack (2011). “Risk sharing and transaction
costs: Evidence from Kenya’s mobile money revolution.” Working Paper.
36
InterMedia
25
About InterMedia
InterMedia (www.intermedia.org) is a nonprofit consulting group with expertise in applied research and evaluation. We
help clients understand, inform and engage people worldwide—especially in challenging environments. InterMedia’s
offices are located in Washington, D.C., London and Nairobi, and we work with a global network of research partners.
Clients active in international development, global media and strategic communication come to us for insight on
how people gather, interpret, share, and use information from all sources and on all platforms. We provide guidance
and impact assessment for strategies focused on engagement, behavior change, content delivery and the use of communication technologies for social good.
InterMedia promotes knowledge-sharing through a range of online and offline resources, including AudienceScapes
(www.audiencescapes.org)—a research dashboard providing data and analysis of media and communication environments
in developing countries. We are also committed to strengthening research capacity in the countries where we work.
Contact us at: generalinfo@intermedia.org.
Acknowledgments
About the author: Anastasia Mirzoyants, Ph.D., is associate director of research at InterMedia and principal author
of this report. She leads implementation of the Financial Inclusion Tracker Surveys (FITS) project in Uganda, Pakistan and Tanzania. At InterMedia, Ms. Mirzoyants specializes in research focused on assessing financial services for
the poor, and understanding the impact of traditional media and digital communications in developing markets.
She received her doctoral degree from the University of Toledo, Ohio.
This report could not have been prepared without the contributions of a number of InterMedia staff who provided
additional research and support for the project:
Tim Cooper, Director of Research
Peter Goldstein, Director of Foundation Relations
Hugh Hopestone, Research Consultant
Max Richman, Research Analyst
Michelle Kaffenberger, Research Manager
Research Support Team
Data quality control: SwissPeaks | Editor and Graphic Designer: Mary Ann Fitzgerald, Diane Buric
A special note of thanks and gratitude goes to InterMedia’s data collection partner on this study: PIPO in
Islamabad, without whom this project would not have been possible. InterMedia also would like to acknowledge
Sonja Gloeckle, former senior research manager at InterMedia for all of her work during the initial stages of
this project.
In addition, InterMedia would like to thank the Bill & Melinda Gates Foundation’s Financial Services for the
Poor program, and personally thank Dr. Jake Kendall, Senior Program Officer, Innovation and Research, Financial
Services for the Poor, as well as Dr. Tavneet Suri, Associate Professor, MIT Sloan School of Management, for the
productive partnership on this project.
This study was carried out with funding from the Bill & Melinda Gates Foundation. All survey materials and data
resulting from this study are the property of the Gates Foundation, but the findings and conclusions within are
those of the authors and do not necessarily reflect the foundation’s positions or policies.
This report was published by InterMedia, April 2013.
26
Mobile Money in Pakistan: Use, Barriers and Opportunities
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