Leveraging Social Cues to Encourage Digital Payments

Digital payments systems become exponentially more valuable for users as they expand, bring in new players, and reach scale. Further, such systems are only useful if there are merchants who accept them, and merchants will only accept digital payments if there are enough customers to use them. It’s a challenging “chicken and egg” scenario.

In Tanzania, Juntos and Tigo Pesa partnered together to scale Tigo’s digital payments, focusing on merchant acceptance of digital payments. In initial user research, Juntos discovered merchants were hesitant to accept Tigo Pesa payments in part because of the perceived risks of accepting digital payments instead of cash. Merchants expressed concern over the costs and shared stories of being scammed by buyers.

Photo Credit: Logan Dickerson, 2015 CGAP Photo Contest

Social proof, a psychological phenomenon that describes the tendency of people to adopt behaviors they see in others, has been one of the successful strategies Juntos has employed in the past to build confidence in mobile money technology. All financial technologies involve some element of risk, but people are more likely to take the same kinds of risks their peers have taken. Because people have fewer examples of others using digital payment technologies, the risks take on a disproportionate importance in the decisions people make. Social proof gives people a cue about what risks are worth taking by sharing with them the outcomes and experiences of their peers. This can be a more salient and powerful reference point for people than broader data or evidence that is not as easily linked to their personal context. In order to do this, Juntos leverages two-way interactive SMS to increase transactions, account usage, and overall engagement with customers.

In one research project, Juntos collected mobile money usage stories from merchants to share with other merchants to build trust in merchant payments. Merchants were aware that their stories would be shared, under conditions of anonymity, to help spread best practices. During a five-week period, Juntos messaged merchants with some of the stories they collected, with the purpose of reducing the perceived risks involved in accepting Tigo Pesa payments.


Perhaps one of the best examples of success is this merchant’s response, after being asked to share his Tigo Pesa merchant story (message has been translated from Swahili to English):

"It started getting me more customers that I had failed to reach previously, because it was difficult at that time when a customer would say they want to pay by Tigo Pesa and I failed to accept because I was afraid of being charged cash out fees. At that time, I was not yet a registered Tigo merchant. But now since I was connected to Tigo Pesa, I have been making the right choices regarding accepting Tigo Pesa payments from my customers and I now enjoy the Tigo Pesa life."

Social proof, delivered through Juntos’ SMS system, demonstrated to Tigo Pesa merchants that the perceived risks of the new payment system were worth taking. In fact, as a result of these types of messaging to merchants and users, Juntos saw a 26% higher number of customers making a merchant payment when compared to the control group. In addition, the number of merchant payments per customer increased by 30% when compared to the control group (see white paper Appendix, below, for additional details on how such statistics were developed, including a more contextualized assessment of robustness). This research suggests that by sharing similar interactive user stories, through SMS or otherwise, could be used in other markets to drive comfort with and use of digital payment systems.

More details about Juntos’ partnership with Tigo Pesa, including sample SMS conversations, can be found here: Juntos + Tigo TZ


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