FEATURES

USSD real time solutions to bridge the credit gap

The African marketplace is one where enthusiasm for mobile services is very high, but where the disposable income of subscribers is unfortunately very low.
Growing interest is being shown by African operators in payment solutions for low-income ends of the population. Since the easy churn phenomenon sparked by number portability, attractive payment solutions are a strong incentive for astute, easy-churn Africans.

Africans need flexible payment solutions
With a GNP per capita of around 250 euros, 46% of the population in French speaking Burkina Faso lives under the poverty level, determined at 1 US dollar per day. Neighbouring countries Benin, Togo and Côte d'Ivoire have similar figures. In fact, only a minority of around 5 % of high-ranking officials, businessmen and black marketers can enjoy a similar standard of living to that of Europeans.

In Nigeria, despite a relatively large GNP, 80% of the population lives on less than 2 US dollars per day. At the top end of the scale, middle-class South Africans, ranked 20th in World Purchasing Power Parity (PPP) can reasonably expect to be able to use their mobile phone without weighing up the financial consequences and compromising on more vital daily needs. However, the rich-poor divide in South Africa translates into a poverty level of 35 %, meaning that one third of the population has dire financial difficulties when using a mobile phone.

USSD Reverse charging to keep in touch
A new solution for low-income customers and which uses cost-free USSD string requests has hit the African market. Called "Pay4Me" by Sicap, it allows subscribers, both prepaid and optionally post-paid, to initiate reverse charging calls. Call-back is ordered by the customer through USSD sequence or by dialling a call initiated prefix. The intended receiver of the call is asked to accept reverse charges. For prepaid subscribers this means that they can make calls even when out of credit, as USSD is not charged. Call detail records (CDR) are automatically generated with all information necessary for proper billing and collection.

The Pay4me system can be extended to handle reverse charging calls to and from other networks, subject to network operator agreements. This means that family and friends abroad can support the cost of keeping in touch. It also means that collect calls are possible even while roaming. An advanced option for operators is the automatic trigger of Pay4Me calls when the prepaid billing system detects a call attempt from a subscriber with insufficient balance.

Pre-paid vouchers could soon be a thing of the past
Another innovative payment solution by Sicap is the 1-to-1 TopUp. It cuts out the voucher or "scratch card" system altogether, making the whole process of credit transfers electronic. The solution allows subscribers to pre-pay for airtime directly from other prepaid accounts, in small amounts. The creditor simply sends a USSD string or SMS with the amount to be credited to the subscriber account. Both parties are notified of the successful transaction and an updated account balance is provided to the customer by SMS. The cost for a reseller of handling an electronic credit transfer of very small amounts is much more financially viable than issuing vouchers of an equally small amount. For operators, physical prepaid voucher cards carry significant production, distribution and system management costs. It is hard to market a denomination low enough for users who get by on a day-to-day basis.

Street vendors, postmen, bartenders, anyone with the business idea of offering prepaid account refills can become a credit reseller. On an informal basis, mobile users can deal with any other mobile prepaid user to buy a small share of his credit from him. This greatly increases the accessibility to airtime credits especially for people living in remote areas where prepaid vouchers are not easily available. Likewise, anybody willing to accept a collect call can enable communication from a mobile user with no credit.

Self-care
USSD requests can be used for account-related activities such as balance enquiries, account top-ups, credit transfers, change of subscription information and subscription to new services. Because users can handle their requests without help, the obvious financial gain for operators is that calls to customer care services are greatly reduced. USSD short codes work from all over the World and there are no interoperability issues, so access is seamless, even when roaming. The advantage for customers is that they have readily available information at their fingertips at all times. The menu is easy to use and self explanatory. A return message for a USSD request takes 2-3 seconds! Moreover, all handsets, even the most basic models, support USSD, so service availability is never an issue.

Integrating mobile-based and conventional transaction services
Sicap and Paybox have combined their technologies to extend USSD type payment options available for African users. End customers can for instance transfer any mobile phone into a virtual bank, serving all basic banking services that are needed for environments where electronic payment systems are rare. Across Africa, payment specialist mTranZact is using such technology in a variety of contexts. The aim is to create low cost payment ecosystems in emerging markets - with operators, financial service providers, retailers and a community of service providers - to bank the unbanked.

Bridging the Credit Gap
Providing alternatives to vouchers is not the only motivation for operators to opt for Sicap solutions. In terms of ARPU, it makes sense to maintain service for mobile users who temporarily run out of credit. Pay4me and 1-to-1 TopUp constitute immediate and convenient solutions for customers to bridge the credit gap. By making mobile services very affordable, operators can significantly increase their subscriber base and overall mobile penetration in their particular market. The simplicity of managing USSD services in the network and the resources saved compared to traditional IVR customer care are ultimately passed-on to mobile customers, who perceive the changes as tangible service benefits.

Case Study: the Vodafone group
Originally commercialized under the name of Oskar in the Czech Republic, the Vodafone group has benefited from Sicap's USSD solutions since 2004. Oskar launched the new USSD self-care service in June 2005 with fast and simple interactivity that would be available to the whole customer base. Oskar supported the launch with a demo section on their web site where end users could experience the new self-care interface. The launch was backed by the "Self-care in your pocket!" advertising campaign.

Experience in implementing USSD solutions and a quick, flexible organisation were paramount for Vodafone Czech Republic. Shortly after launch 10% of all self-care requests were made through the Sicap USSD gateway. It not only met the original self-care targets set, but also opened up a new marketing opportunity. VF CZ used the USSD gateway to facilitate customer access to its portfolio of value added services such as information alerts via SMS or MMS. As expected, a stronger take-up of VAS via USSD was also observed.
"We opted for Sicap because of their long and substantial experience in implementing USSD solutions and their professionalism during the tender process. They responded to all our requirements in a reliable and highly efficient way," commented Elliot Jalley at Vodafone Czech Republic a.s.

Sicap solutions are deployed across the continent. Since taking over Swapcom in 2006, Sicap has extended its presence and now has offices in Johannesburg and Dakar.