Mobile Banking Iptake: Sim Card vs. Phone, Ownership vs. Use

Is it possible to experience the core benefits of mobile phone ownership without having a mobile phone?

In contexts where income is highly variable people living on the poverty line are more likely to be forced to sell off assets in order to buy essentials such as food. The mobile phone is such an asset. The net result is that there are people with a sufficient technological literacy to understand what a phone can do, a nuanced understanding of the communication norms, own an active SIM card but no mobile phone and most likely live in a community where people understand the variability of income and ownership. In these contexts it can be socially acceptable to ask peers, even strangers to borrow their phone, take out their SIM, insert their own and send off text messages or make calls – since the monetary costs are passed on the SIM card owner.

The increasing prevalence of dual-SIM card supporting mobile phones and the tools to manage current calls costs (Benner et al., 2006a, 2006b) make this an interesting space to watch since it lowers the barriers to sharing, whether for personal or profitable reasons.

With poor, highly price sensitive customers a useful distinction to make is between ownership of a mobile phone and its expected use. For any aspect of phone use that costs money assume that the consumer will actively consider cheaper alternatives such as using phone kiosks, waiting until lower tariffs kick in before sending a text message or delivering messages through other channels. Whilst convenience is certainly valued, it is not necessary in every instance. Practices driven by more social motivations are stickier simply because the decision to opt out of using the technology becomes one of whether to opt out of society.

Multiple Sim Card Use

The use of multiple SIM cards is a relatively common practice in emerging markets: primarily driven by a desire to save money – calls terminated on a different network cost more hence the smart user that can afford to do so will carry one SIM for each network operator; a desire to separate personal and work communication and/or personal from very personal e.g. extra marital affairs; and because one network operator doesn’t offer the necessary network coverage. In addition the monetary cost of obtaining a new pre-paid SIM card is minimal. Know your customer (KYC) requirements for anti-money laundering (AML) and counter-terrorism financing (CTF) means that the effort required to set up a new account should be non-trivial – through anecdotal evidence from the streets shows that in practice it varies from culture to culture and that these measures can be relatively easy for the user to circumnavigate. Given that, with the right permissions it is relatively easy to trace an accurate picture of a user from the content and recipient of their communications, it is relatively easy to retroactively know your customer.

One of the primary drivers for using multiple SIM cards – saving money, takes revenue out of the pockets of the network operators it should come as no surprise that they don’t distribute products that undermine their business model. Hence the mainstream mobile phone manufacturers, many of who rely on the network operator’s distribution channels have not brought products that support multiple SIM cards to market. Realizing this opportunity numerous 3rd tier Chinese shanzai or ‘bandit’ phone manufacturers have started offering dual SIM card devices that dynamically switch between two network operators without having to reboot the phone. In addition mobile phone street-hack repair services now also offer a hardware hack that enables two SIM cards to be placed into one physical SIM card form factor that allows the owner of any unlocked GSM phone to switch between two carriers (Chipchase, 2008b). Software versions are available supporting between 6 to 16 virtual SIM cards in one physical SIM card. The street hack services are particularly interesting in that they highlight the marketplaces ability to innovate from the ground up to offer services for which there is obvious user demand despite from a user perspective, artificial barriers.

How will the adoption of multiple-SIM card devices change over time – and how might this affect the practices around mobile money services?

-Jan Chipchase