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Agency banking for merchants takes hold in Morocco


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​​​​​​- How a WSBI programme is being rolled out in Morocco- Al Barid Bank pilot connects merchant agents with customers via mobile app ​​

The following piece was published on the Mastercard Foundation blog. that will be featured in the upcoming April edition of News & Views.

BRUSSELS, 26 April 2018

Updated: 22 November 2018 (Includes programme branding changes. Replaces MTripleSW with Scale2Save)​

A Mastercard Foundation partnership with WSBI is working to enable access to financial services for at least one million low-income people in six African countries. The account below shows how the program is being rolled out in one of those countries: Morocco.

By Céline Stevens, Programme Manager, Scale2Save​, WSBI

Agency banking, when a third party (agent) provides financial services outside of bank offices, took its first, tentative steps earlier this year in Morocco following new regulations enacted in 2017.

I saw first-hand the potential for agency banking to improve access to financial services after spending two days with Al Barid Bank, the postal bank in Morocco. It is a partner financial institution in the WSBI programme Scale2Save​, which is a joint initiative with the Mastercard Foundation.

ABB had invited me to attend meetings to launch the agent banking pilot in Ben Guerir, a small city of about 90,000 people and a provincial capital in central Morocco. Ben Guerir is home to a Moroccan Air Force base and two ABB branches.

ABB had its first merchant recruited for the pilot in this city. A small grocery owner, the merchant represented the start of a bigger goal: to sign up 5,000 new consumer clients and 100 merchants in Ben Guerir. The project aims to harness the use of an app on local merchants’ smartphones that would enable ABB customers to make purchases, to cash in/out, and to make other transactions — a technical first in Morocco and for ABB.

From the experience with this first “pilot” merchant came plenty of “ah-ha” moments.

Challenging assumptions
During my visit, I met with the director of one of the ABB branches, who demonstrated real local knowledge despite having only two workers — one manager and one customer advisor. Even with such slim staff levels, there was that one merchant who had already agreed to take part in the program. But it didn’t go off without a hitch.

At face value, the merchant sign-up would seem rather simple. First, candidate merchants must already have an account at ABB. Second, they must be willing and able to load the ABB merchant app on their smartphone to receive online payments. The app allows merchants to connect wirelessly whenever a customer with the ABB mobile app comes into the store. The store customer mobile app “talks” to the merchant app either through a QR code or via SMS. This, however, is easier said than done.

On the day of our visit, the candidate merchant received a team from ABB headquarters and the local branch. Joining the group was the branch customer advisor, whose computer was just uploaded with software designed to track merchant agents who sign up for the app.

Loading the app on the merchant’s smartphone proved a bit of a challenge. It didn’t work the first time, so ABB took the smartphone back to the branch and uploaded the app there. The problem was solved simply by a better internet connection during upload. Lesson learned: faster bandwidth required.

Image at left: Screenshot of Al Barid mobile app

The merchant and the ABB people then returned to the merchant’s grocery store to show him the new app and how it works. But, even after training, the merchant remained unconvinced. Security concerns popped into his head, especially if the smartphone was stolen or if he was to forget it somewhere. That’s where the branch director had sway over him, that local touch that no one from HQ would dare to attempt. The branch director explained that the phone will have a key, just like the door in his store. The merchant was put at ease. Lesson learned: local knowledge counts.

Ambitious objectives
Beyond that first merchant in Ben Guerir is a rather vast set of merchants that ABB would like to pursue, including those working in a big open-air market. On the customer side, the ABB team would like to tap into the military community at the nearby base as most of these people have an account with ABB. That requires getting the word out to military personnel through targeted marketing and word of mouth. ABB must make the case that the ABB mobile app connects them to their families who are often not living on or near the base.

Another benefit for the military personnel is savings. By adding a savings product, the economies gained by sending money to family members also using the app can be put aside for the future. That’s a big selling point because most of a soldier’s salary is sent to dependents. Families avoid high-fee wire transfer services. That leads to savings, our main goal. Lesson learned: demonstrate savings, the need to connect.

Beyond technical glitches faced when setting up the first merchant agent, we know that access issues will still surface. Right now, merchants need a Google account to download the app. Is that enough? With apps come updates which will need to be thought through, as well, before bringing the app project to scale.

An identity issue may be problematic on the customer side, too. Not so much in Morocco, I’ve been told, but more so in other parts of Africa because it is not always the person who owns the phone who also owns the chip installed in the phone.

Data is another challenge: not necessarily how to harvest it but what to do with it. Will it help fine-tune agent and customer use to get people to take up the offer? Will it help provide real savings for customers?

Recruiting the first merchant is a big step but there is plenty of work ahead. ABB aspires to scale up and eventually attract 5,000 merchants and 250,000 customers to its mobile accounts. Half of these people are seen as opening savings accounts.

We are in the early days of this project, but if some of the initial roll-out bumps can be smoothed over, the road ahead may well turn out to be productive and profitable for clients and banks involved in the Scale2Save programme.​