Oxford, U.K. — (METERING.COM) — February 3, 2012 – Africa’s mobile communications revolution presents a promising new approach to improve the financial performance for water service providers, according to a new report from researchers at Oxford University.
With an annual financing gap to meet the African water supply and sanitation Millennium Development Goal of US$9 billion, mobile water payments also offer time and cost savings to water users, and increased customer loyalty for mobile network operators.
The report, Mobile Water Payment Innovations in Urban Africa, reviews mobile payment activity at 20 urban water service providers serving over 12.5 million customers in Kenya, Uganda, Tanzania and Zambia.
The findings reveal low mobile water payments adoption rates with only one water service provider achieving over 10 percent uptake from its consumer base. Key barriers to adoption include delayed reconciliation of billing systems, limited customer awareness, lack of physical proof of payment, high transaction tariffs, and convenience of alternative pay points.
However, all these barriers can be overcome, as exemplified by one small, privately run scheme in Kenya where 76 percent of customers had adopted the mobile bill payment option. In this case, high time and cost savings were revealed as the principal motivations, with women benefiting most from time savings. There was no evidence that levels of wealth, education or water service satisfaction are significant predictors of choosing to pay by mobile transaction. However, mobile water payers were more likely to be already paying their electricity bill via a mobile transaction or in full-time or self-employment, thereby reinforcing the time and cost saving benefits.
According to the report, despite a compelling value proposition for a range of actors, technological, behavioral and structural constraints currently hinder greater customer uptake of mobile water payments throughout the region, and work is now needed to tackle these.
“Creative innovation is also required to unlock mobile money solutions that can directly benefit low income, unconnected water users,” the report continues, adding: “Ultimately, any transformational change will depend upon the institutional, financial, operational and regulatory responses that put this tool to good effect.”