Keywords

1 Introduction

The social meaning of money has been discussed in the literature [1], addressing how monetary value goes well beyond its utilitarian nature and is deeply rooted in the culture and social patterns in which money is embedded and exchanged.

As technology mediates money exchange, it affects people’s mental models and social relationships around money. In this paper we reflect on how mobile technology is affecting the way in which person-to-person (P2P) money transfers are becoming increasingly embedded in social communication and discuss implications for design. Building on our extended research on mobile payments in both emerging and mature markets, we argue that there are several learnings we can take from both markets that can inform the design of mobile P2P experiences that better support people’s social communication globally.

2 Background and Related Work

P2P money transactions have been very common across geographies for decades – be it through bank transfers, remittances, or cash. In so called emerging, cash-based economies, the use of mobile technologies for such a purpose has been one of the main drivers towards the shift from cash to digital payments [2]. These economies have embraced mobile payments much earlier than developed economies, since the service enabled users to effectively cope with the risks and costs of physically traveling upcountry to deliver cash to their loved ones. Since 2007 [3] people in Kenya, often unbanked [4], have been able to send money to family and friends through mobile money by simply using their feature phones and USSD applications, through services enabled by the mobile operators. Moving from cash to electronic payments has shown to have a deep socio-economic impact on emerging markets [5, 6], tackling issues around security, cost of money production and transportation, hygiene and transparency [7], just to name a few. Such a shift is not trivial in terms of mental models and related financial behaviors. As discussed by Ignacio Mas [8], a leap from cash to digital economies deeply affects the way in which people think about and store money, plan their expenses, save and manage liquidity. In this sense the design of technology enabling money transfer can have a major influence on people’s interaction with finance and with other people. As shown by Kusimba et al. [9], mobile money has been co-shaping the way in which people nurture their social relationships and communication. For example, male users in Kenya send air-time bundles to women as a form of courtship and gifting [9].

To better understand and analyze day-to-day use of mobile payments in emerging markets, specifically urban areas, the authors conducted qualitative field research in Kenya, Philippines, Brasil and India from 2013 to 2015. We conducted individual and group interviews with over 260 urban, middle-income participants across these countries. In particular, we focused on Kenyan mobile payments, conducting 7 field research trips in 2014 and 2015, interviewing over 120 people. The analysis on emerging markets in this paper is informed by this original research and existing literature.

In addition, for mature markets, the authors of this paper have been researching and designing mobile payments apps for the US and UK market since 2012. This paper’s analysis on mature markets uses findings from research conducted in this capacity. Studies were conducted in London, San Francisco, Los Angeles and New York focusing on mobile payments, with the bulk carried out in San Francisco. Monthly interviews with 4–6 mobile payments users, over 120 participants total, were interviewed during the product development process.

In mature markets the shift from cash to digital transactions, i.e. using “plastic” or “intangible” money, has happened much earlier [10], largely driven by the emergence of debit and credit cards, followed by e-banking and e-commerce services. The adoption of mobile phones for P2P transfers, on the other hand, has only emerged in recent years, through the introduction of smartphone apps like Google Wallet, Venmo, Square, the Paypal app [11], and mobile banking services. Those services have mainly been adopted by so-called millennials [12], i.e. people reaching young adulthood around the year 2000.

The recent uptake of smartphones across mature and emerging markets [24] sets the stage for a new era in which both types of markets will increasingly use mobile phones to exchange money. Given how smartphones have been shaping social communication, we reflect on how this trend is shaping P2P money transfers globally, and argue that it is a time of behavioral convergence between mature and developing economies. Analyzing that convergence and building on our research in mature and emerging markets, particularly in Kenya, we then draw design implications for mobile P2P payment experiences.

In the section below we call out the differences and similarities of how mobile wallets work in the different geographies and discuss how those differences affect people’s mental models and shape social behaviors.

3 How Mobile Wallets Work

3.1 In Emerging Markets

In emerging markets mobile money services provide a way for people to store value with the mobile service provider. In those markets the relationship between consumers and providers has been traditionally based on a pre-paid format: i.e., users top up their air-time accounts by paying cash at a mobile carrier agent. Differently from traditional financial institutions, mobile carriers have built extended agent networks reaching rural areas: relying on the same network and cash-in model, in 2007 Safaricom in Kenya started offering mobile wallets [3], i.e. the possibility for people to store value with the operator similarly to a bank account and transfer money from a person to another one through that network using their phone.

This works in the following way: people open a mobile wallet account, linked to their phone number, with their mobile operator and top it up in cash at physical location run by an agent. When opening the account they get a PIN. When they want to send money to one of their contacts (e.g. family and friends living in a rural area), they: (1) enter a USSD application available on feature phones and linked to the phone SIM card; (2) enter the phone number of the recipient; (3) enter the amount; (4) enter the PIN. After that, they receive a confirmation over SMS, and the recipient gets an SMS notification that money has been transferred to their mobile number/account. At that stage recipients can: (1) visit an agent in their area to cash out the money; (2) store money in their mobile balance; or (3) convert it to air-time value.

As the model in Fig. 1 shows, mobile wallets in emerging markets build on the concept of a stored value that can be transferred from person to person through a provider. Although mobile money enables and drives the shift from cash to digital, the mental model of mobile money is rather close to how people handle physical, cash-based value.

Fig. 1.
figure 1

The diagram shows the typical conversion flow of money from cash to digital value stored by the operator and further converted into cash. Mobile money is often used as conduit for cash to cash transfers. In some markets this kind of transactions have so frequent that users now increasingly transfer mobile money balances without withdrawing cash immediately [8].

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Mobile wallets in Mature Markets, on the other hand, normally build on a different model, as discussed below.

3.2 In Mature Markets

Mobile wallets in mature markets, e.g. Google Wallet, Apple Pay, Venmo, Square cash, normally rely on a proxy model, where the P2P app serves as a proxy for money transfers between the sender and receiver’s bank accounts.

This works in the following way (see Fig. 2): Users download an app onto their smartphones and link that to their email account and banking credentials in the sign up flow. In most cases the banking credentials are entered via debit or credit card details. The app syncs to their email and social contacts. When a user is sending money to a recipient s/he selects a contact from the ones available or enters a phone number (e.g. in Venmo), enters an amount, and sends. For the recipient to receive the money, she may need to sign up for the app, or receive the money as an in-app stored value before transferring on his/her bank account.

Fig. 2.
figure 2

The diagram shows the typical flow for P2P mobile transfers in mature markets. Differently from emerging markets, the value remains digital throughout the transaction and the mobile app serves as proxy to people’s bank accounts.

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There are three key differences between the mental models of P2P money transfers when comparing emerging and mature markets. First, in emerging markets the conceptual starting point is cash being transferred from one person to another. Whereas in mature markets, digital values stored in formal financial tools like banks and credit cards is the starting point.

Second, in emerging markets, cash must be converted to a digital stored value before it is sent. In contrast, stored values are optional in mature market apps and not required to complete a transfer. But in the mature markets, users must have a formal financial instrument, such as a bank account. Lastly, in emerging markets the ability to quickly convert stored value into physical cash is a necessary feature, whereas in developed markets it is not. People in emerging markets often do not have enough funds [25] and financial stability to be able to open a bank account, which often require minimum balances.

Building on these considerations we analyze other global trends that indicate opportunities for convergence in the landscape of mobile wallets.

4 Converging Trends

One of the evident trends seen at a global scale is the growth of mobile natives [13, 14], i.e. people who experience computing and the Internet on mobile first. Not only the majority of people in emerging markets are more likely to afford a phone than a laptop or a desktop computer, but due to falling smartphone prices in recent years, those have become key entry points for people’s access to communication and information services. 67 % Of phones sold by Safaricom in 2013 were smartphones, far outpacing feature phone sales [15]. In addition, Safaricom has already pledged to phase out the sale of feature phones in Kenya [16]. Furthermore, populations in emerging economies have the fastest growth rates [17], meaning they have a very young population which is increasingly developing social communication behaviors that are similar to young people in mature markets [18].

At the same time, young people in mature markets are learning to interact with computing and the Internet on mobile touch-screen devices from an early age. Across the two type of markets, it is clear [13, 18] how messaging (e.g. Whatsapp, Line), social networks (e.g. Facebook, Instagram) and entertainment (e.g. YouTube) are the main drivers of mobile services usage. Recent research has also shown how the millennials in mature markets are less likely to use credit cards and other services from formal financial institutions [19]. Similar to what can be observed in emerging markets, this is due to either lack of financial stability and fixed income, or to a sense of mistrust in traditional financial institutions that is growing in some mature markets [4].

Lastly, messaging apps like Whatsapp, Line and WeChat have seen a great growth especially in some emerging economies [20], and obviously amongst younger users. Some of these apps already offer the opportunity to purchase digital stickers and games that users can exchange as gifts in their social communication. Many of these apps are planning to support P2P payments [21].

5 Design Implications

Based on the considerations above we claim there are learnings we can derive from the way smartphones are supporting people’s payment and social behaviors in both markets to design P2P payment experiences that are globally relevant.

5.1 Learnings and Implications from Emerging Markets

Physical Storage and Attachment Metaphors.

As discussed above, people in cash-based economies tend to have a mental model of mobile wallets similar to the physical storage of money, e.g. like the jars in which they would store cash to save for a specific goal [8]. At the same time, millennials in mature markets have less access to and familiarity with the proxy model of bank cards, and are more likely to deal with cash and bank transfers for P2P payments.

In terms of user interface design, this suggests that using the metaphor of an attachment to a message could leverage that same mental model around stored value, resembling the experience of sending money to a friend in an envelope, or attaching a stored file to a text message. The same metaphor has been used by Google, where users “attach” money to emails in Gmail [22], but we believe there are even greater opportunities to embed that behavior and related ones in real time communication.

Already today people are using messaging apps to enhance their communication by combining multiple media, e.g. sending each other stickers-enhanced photos (e.g. Line Camera), videos, and audio files. From a design perspective this seems like a good opportunity for design to enhance people’s P2P behaviors by allowing them to “wrap up” the value they want to send to each other in visually engaging forms. For example, WeChat changes its visual design for Chinese New Years to resemble traditional red money envelopes, which recipients “open up” in the user interface to claim their money, carrying the feeling of receiving and opening a physical gift, into the mobile app environment [23].

The Notion of a Visible Stored Balance.

For people with inconsistent funding and financial instability, being aware of the balance they have available at a specific point in time is particularly relevant. While the notion and perception of available balance is rather clear in the physical and stored-value models, it is less so in the proxy model. Apps like Square Cash, for example, make debit transfers directly from the sender’s bank account to the recipient’s account, but does not display bank account balances for either. One of our investigations through Google Consumer Survey, polling 2000 young adults from the US who used mobile financial apps, indicated that checking bank account balances was the most frequent activity, and heavy users sometimes checked their balances multiple times a day to make sure they could afford purchases.

This observation suggests that for users of mobile P2P payments it is valuable to have an immediate access to their available balance in the user interface. In mobile money services in emerging markets today, users need to look up their SMS history and go through the service notifications, or initiate a query in the USSD app to check their balance. Only recently some smartphone apps like M-ledger (see Fig. 4a) have become available in those markets and provide a simpler access to the users’ balance in the mobile money account. Similarly, Venmo in mature markets displays the user’s mobile wallet stored value (i.e. the Venmo balance), however, it does not display the user’s bank account balance and most of mobile payments apps don’t either (see Fig. 4b).

Our recommendation is that considering the type of users who are adopting these services across markets - i.e. people with fluctuating income - it makes sense to consistently show in the interface the balance that is most relevant to users, to support people’s awareness of the amount they have at disposal and are able to share. In emerging markets, that might be the balance in their the mobile money account, whereas in developed markets showing the bank account balance may be more useful.

5.2 Learnings and Implications from Mature Markets

Visual Cues for Real Time Communication.

As shown in the diagram in Fig. 3, people in mature markets are evolving their usage of mobile devices for real time social communication into mobile wallets. In emerging markets the use of mobile money has traditionally been based on SMS protocols, i.e. on asynchronous communication. When a person sends money to another one via mobile money, she needs to receive an SMS confirmation to be reassured that the payment has gone thorough. In our field research in Kenya and the Philippines we have also observed how people often switch to voice, calling the recipient, to make sure that s/he has actually received the money and there were no mistakes in the number that was typed to indicate the recipient.

Fig. 3.
figure 3

This diagram illustrates how social interactions and mobile payments have evolved in mature markets and emerging markets. The two developmental paths differ, but are converging – social apps are incorporating payments, and payments apps have increasingly begun to incorporate UI patterns from social apps, such as chat bubbles (see Fig. 4d).

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Based on these considerations we believe there are design opportunities for making the mobile P2P payment experience feel more immediate and familiar to the way people already use social apps. Examples for that are visual cues that provide a notion of presence, sending and receipt status similar to the cues used by apps like Whatsapp or Hangout. Additionally, a conversational UI similar to messaging apps builds on existing mental models around P2P and group communication that can be easily enhanced by enabling the sharing of money in the same fashion.

Square Cash and SnapCash are already moving in that direction (e.g. see Fig. 4d) and, as mentioned above, social apps are planning to include payments in their services [21]. Based on our research (see next section) while a conversational UI is promising, it is also important that it doesn’t simply consist of speech bubbles sending money to each other. For payments to be embedded in the social communication they need to maintain the richness of the social context in which the money exchange is embedded: e.g., enabling thank you messages in the same thread, or connecting the payment to a group event people have contributed pictures and videos to.

Fig. 4.
figure 4

User interfaces of different mobile payment applications. (a) M-Ledger, available in Kenya; (b) Venmo app; (c) Google Wallet app; (d) Square Cash app

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Paying a Contact vs. Paying a Business.

In order to better understand how a conversational UI similar to the Square Cash one (Fig. 4d) would be perceived in comparison to a list-based one more conventionally associated with financial tracking, similar to the Google Wallet (Fig. 4c) one, we ran a qualitative study with 7 college students from the US who had no or limited experience with mobile wallet apps. In the study we asked them to send money to someone with both interfaces and we collected their feedback around usability and overall experience. For all participants a conversational UI felt natural in a conversational context, i.e. in a messaging app, but would feel less secure and too casual in a payment app. Additionally, they felt like they could imagine using the conversational UI for sending money to their contacts, but they couldn’t’ imagine using it for paying a business.

This insight is consistent with our field research in Kenya, where people talk about paying a business as a “transaction” vs. paying a person as a “social experience”. In 3 of the focus groups we ran in Kenya, we found that participants distinguished between: (1) sharing money with friends and family; and (2) paying a merchant at a store and went as far as to use different verbs: “sharing” described P2P payments, and “paying” described merchant-customer payments.

Overall, people across markets seem more inclined to use a social payment experience to send money to family and friends, but they wouldn’t necessarily want the same interface to send money to a business. These observation suggest that while embedding payments into social conversations is promising, further research into a classification of payment types would be helpful to understand design implications around users’ perception of security and privacy.

6 Conclusion

By highlighting global trends around social and payment mobile services, and building on our research in the field across mature and emerging markets, in this paper we argue that the convergence of users’ behaviors calls for converging design solutions. To that end we have identified design opportunities for creating mobile P2P payment experiences that build on the learnings from both markets and strive for more engaging and globally relevant interfaces.

We believe there is scope for further embedding payments in mobile communication by gathering a deeper understanding of how P2P payments networks map to social communication ones. Research has been done on M-PESA, especially in Kenya, [9], but more comparative research is needed across regions of varying market levels. Along the same line, it is important to understand how cultural differences related to gifting, allowances and bills sharing might influence people’s behaviors and expectation with regard to the interaction with the mobile service.

To that end, we aim at conducting further investigation across markets to identify and compare what type of connections people send money to, the frequency, amounts and reasons for sending, and how the communication patterns around that may vary. In doing so, we believe we can drive further insights to inform the design of mobile P2P payment services that are globally relevant, useful and engaging.