Hear from the team: What we learned launching merchant prepayments

Interview by Ann Kim, edited by Eva Hoffmann and Abi Steinberg

This is one in a series of blogs about a prepayment product that IDEO and Mercy Corps Ventures have been building over the last few months in conjunction with Sokowatch, an informal retailer logistics platform. We launched a prepayment product that enabled Sokowatch’s retailers in Rwanda to make prepayments into Sokocash and earn bonuses. They could redeem Sokocash for products on the Sokowatch platform to sell to customers.

Picture this. You need to launch a pilot program for a new financial tech product.

Straightforward enough, right? Gather research, prototype the solution, gain more insights, refine it, and keep moving forward.

Except…The market for your product is in another country. And to make things more complicated, there’s a global pandemic going on, restricting your ability to travel.

This is the situation that we found ourselves in, alongside our partners, Mercy Corps Ventures and Sokowatch.

The path through these obstacles?

Alice Igisaro, Emmanuel Irumva, and Gloria Kanyage: our team on the ground in Rwanda who spearheaded critical research and implementation of our pilot program.

One big takeaway? Money isn’t rational. Talking to merchants about their aspirations was much more valuable to drive adoption.

As Alice shared in our interview:

“What’s in it for you in this program is not only money, or bonuses, but challenging yourself to change a way of life that you have been wired to. We are bringing in a new perception of saving to merchants.”

This insight spurred our exploration into bigger, more impactful questions. Like:

How might we scale savings products that are framed around improving informal retailers’ lives and unlocking their aspirations?

This work wasn’t possible without the efforts of an incredible team passionate about customer experience and the lives of informal retailers. We asked them to share insights around what they learned, loved doing, and might change when it comes to launching a savings product. We’ve captured their thoughtful responses below, edited for length and clarity.

What were some highlights of working with informal retailers in this pilot?

Alice: I loved working with informal retailers, because I was approaching the community in a new way. I was approaching them in a way that challenged them to act on their everyday life [and change their behavior]. And I love that part.

I recruited a female merchant, who wanted to be in the program, but she was not sure since she had to talk to her husband. At first when she talked to her husband, her husband was not very fond of the idea. She was still really excited about it and asked me to talk to her husband. I took some time and went there. The shop really belongs to both of them, so we just talked. The husband actually accepted! [The wife] was like, ‘just trust me, and whatever comes, you can blame it on me.’

After the merchant deposited and gained her first bonus, she called me. She was so excited and happy. She told me she was glad that she made the choice [to join], because it was a good choice, and she really got the bonus — the offer was for real.

And I love that after that she got the products she had saved for, she told her husband, ‘You see. I made the decision, and I got the bonus and the products on time!’ I felt very moved by that. I love that in providing the service that we had promised, we increased her self-confidence in taking financial decisions. She took a risk and she didn’t suffer from it as much as her husband worried.

Gloria: There was this one client who had won a phone as a bonus. I went alone to deliver it, and I told him I was coming. He said, “Okay,” like it wasn’t a big deal. But when I got there, his kids, his wife, they were all there, and he had prepared a meal for me [to celebrate]. It was really exciting, I appreciated it.

Did you learn anything that surprised you during the pilot?

Gloria: I was surprised that not everything is about money or bonuses. Many merchants weren’t really interested in the bonus. They were like, ‘No, first give us a great service, any bonus will come after.’ You know that not everything is about money — some people just need great service from you.

Emmanuel: One day I was out with a merchant showing them how to use their [Sokocash] balance, and a [Sokowatch] delivery agent found me there. He told me that most delivery agents see a loss during reconciliation, counting money. Cash disappears. He told me that if they had a chance to take products to merchants without taking cash, merchants might never have that loss. I realized that what we were offering — digital prepayments — could solve this problem if everything was aligned well. We could help delivery agents that were facing personal losses when collecting cash. Every delivery agent wanted this program to run, even when we faced issues or challenges.

How difficult was it navigating a pilot where you needed to support merchants in the midst of COVID lockdowns?

Alice: The hardest part was having to keep track of orders and coordinate everything through only phone calls. We’d be calling delivery agents, merchants, delivery agents again — some wouldn’t pick up the phone. I wasn’t able to go look at someone in the face, I had to just call.

Gloria: Calling merchants without being there in-person was really stressful. Some thought we were scammers. And the curfew [during the pilot, Rwanda imposed a curfew to stem the tide of COVID] was really hard. It wasn’t easy knowing you had to go to a merchant very far away, maybe a 3 hour journey, and be back by 7 pm. It really required planning.

Emmanuel: Merchants were affected by COVID-19. Covid affected their daily performance in selling products. Daily revenues were low and not everyone was comfortable releasing their cash to the company as a pre-payment. Everyone was thinking, if in the next lockdown, my money is stored in Sokocash — what if I need to use that money somewhere else?

During COVID, merchants aren’t earning as before but everything else is the same: taxes and house rent the same, other expenditures are the same. Many merchants tend to invest everything they have into their shops. They don’t have other cash because they want to get other products — that’s the reason many don’t want to set cash aside because they need to invest it into their business.

Imagine we turned back the clock, and started this pilot from scratch. What advice would you give the team?

Alice: This product was created to help merchants understand savings and introduce it into their lives. We are challenging their culture to create change in people’s lives. If we framed our prepayment product around changing culture, even my approach to merchants would change — it wouldn’t be a sales approach anymore.

I would approach the merchants in a way that shows them that what’s in it for you in this product is not just money or savings bonuses — you are challenging yourself to change a way of life that you have always lived. I would talk about how what we’re really bringing is a new perception of saving.

Stay tuned for the next blogs in this series, where we’ll go into more detail around how we designed the pilot and what we learned in execution.