Pre-paid airtime distribution
Throughout Africa and southern Asia the vast majority of cellphone users are pay-as-you-go (PAYG) clients.
- Typically a PAYG user only realizes they have zero remaining credit when they suddenly get cut-off
- Rural (and even urban) community doesn’t have personal transport and hence needs to walk / cycle or catch bus or taxi to nearest airtime shop in order to “top-up” at considerable inconvenience.
- Lack of transport means that airtime distributors need to be physically close to the customers they serve so ideally tens of thousands of distributors are necessary for country-wide coverage.
- However the cost of maintaining large-scale distributor network is vast and includes:
• Thousands of handheld or other expensive POS devices
• Huge Stock holding at many levels in the “channel”
• Huge data & infrastructure costs shifting stock around
• Vast employee or contractor relationships
Concept
The Tym2Sell concept: “To allow a distributor of pre-paid airtime to rapidly deploy a distribution network of tens of thousands of airtime sellers throughout a country at near zero cost to the telco / distributor”
This is achieved by:
- Allowing sellers to use their own cellphones (no matter how old) to sell airtime to customers in every far flung village, on every street corner, in every taxi / rickshaw and in every formal and informal market place
- Allowing anyone to become a seller without any physical interaction, contract or credit agreement needing to be established between seller & the telco/distributor
- Promote the rapid viral growth in the seller population by recruitment royalties whereby a seller who recommends another potential seller gets a small portion of that seller’s profit forever should that seller apply and be granted seller status in the system
- The seller’s cellphone is their complete POS solution that can:
• Vend airtime as well as check balances
• Show sales & profit
• Recall previous transaction details
• Recruit other sellers
How Tym2Sell Works – Recruitment
Let’s use an example to see how Tym2Sell’s viral seller recruitment model works in practice:
- Peter runs an informal roadside fruit stall. He also is a seller of pre-paid airtime to his clients on Tym2Sell.
- On Tym2Sell’s screens it constantly tells Peter that should he successfully recruit other sellers to the system that he will earn an additional royalty of 10% (site configurable) on every sale they make forever. This gives Peter a strong incentive to recruit friends he knows will sell lots of pre-paid airtime.
- Using his cellular phone Peter logs onto Tym2Sell and recruits his friend John who is a taxi driver. He does this simply by entering John’s cellular number (nothing else is required).
- The central server records that Peter has recruited a certain cellular number. It then sends that number an “invite” SMS on Peter’s behalf telling John to take a look at Tym2Sell.
- John clicks on the URL provided in the SMS “invite” and reads about the benefits of becoming a Tym2Sell seller.
- Based on what he has read John decides to apply to become a Tym2Sell seller and fills out a simple 4 point application on his cellular phone. This application is either auto-approved or sent to the vendor’s approval personnel for approval.
- Once John is approved on Tym2Sell the system sends John an SMS telling him that he is now an authorized reseller of airtime.
- From then on each time John sells any airtime Peter receives a royalty which is immediately reflected in his balance on his phone and (using the transaction details screen) Peter can see the origin of this royalty i.e. John’s sales.
How Tym2Sell Works - Voucher Selling
Let’s use an example to see how the selling of pre-paid airtime works using Tym2Sell:
- Patricia (a passenger traveling in John’s taxi) is chatting away on her cellular phone when suddenly she is cut-off. A quick check reveals her pre-paid balance to be zero, the cause of the phone call being cut short.
- Patricia asks John for an airtime voucher (or direct top-up) in the denomination and telco of her choice. With just 3 clicks on John’s cellular phone he issues Patricia an airtime voucher and collects her cash for the transaction.
- Patricia can now continue to make calls on her cellular phone whilst John drivers her to her destination.
- Patricia could also have bought airtime for someone else (e.g. her daughter). In this case she has a number of options:
• Give John the mobile number of her daughter so that he can perform a direct top-up of her daughter’s account.
• Give John the mobile number of her daughter and ask him to SMS the voucher number to her phone.
• Ask John for the voucher number and write it down to give to her daughter when the two next meet.
- No matter how the transaction is performed a royalty is immediately paid by the system to Peter (the person who first recruited John.
How Tym2Sell Works – Banking
Let’s use an example to see how a seller completes the sales cycle by making a bank deposit of a portion of the day’s sales proceeds in order to credit their balances on Tym2Sell:
- After each airtime sale, John, the taxi driver, is automatically shown his remaining balance on Tym2Sell.
- At some point John’s balance on Tym2Sell will be too low to make any further voucher sales. At this point John’s wallet should be bulging with cash from the proceeds of all of the airtime sales he has made.
- Tym2Sell displays a screen to John showing him the various banks where he could make a deposit. It also tells him what code to add to the reference area of the deposit slip.
- John deposits money into the bank and branch most convenient to him.
- Within an hour John’s deposit will be reflected on his Tym2Sell balance and he will be able to continue selling airtime.
Viral Adoption
- Tym2Sell requires virtually zero marketing costs in order to rapidly recruit a nation-wide network of airtime sellers.
- Each seller has a powerful incentive to actively recruit more sellers as they will forever receive a royalty on each sale made by the sellers they had recruited.
- A seller’s royalties earned from the airtime sales of their recruited sellers are immediately reflected in their statements and balance on Tym2sell allowing them to use this to sell additional airtime in order to monetize this royalty.
- The operators of Tym2Sell can vary the pace of this nationwide viral spread via the adjustment of business rules in the system. These are:
• The royalty percentage earned by the recruiting seller.
• The number of recruits any one seller can gather.
• The seller approval cycle. This can be varied from a totally autonomous automatic approval of any seller to a process involving background checks etc.
• The cost (if any) to a recruiter to recruit another seller.
As can be seen, the Tym2Sell business process can be varied to any degree from creating a steadily increasing adoption all the way to a virally spreading network of sellers creating a nationwide network of sellers in a matter of weeks.
Distribution Models
- Tym2Sell typically has a flat single level distribution model whereby each seller is responsible for managing their account balance and replenishment thereof by depositing cash into one of the available bank accounts.
- However there may indeed be instances where certain sellers are too remote from any bank to visit on a regular basis and where they therefore act in a cooperative fashion.
- This cooperative model may also be forced where village elders insist on appointing “authorized” sellers in their area and perform banking on their behalf.
- There may also be practical instances where sellers may collaborate such as when a number of sellers are “working” an event such as hawking airtime at a stadium hosting a soccer match. One seller may run out of credit due to the increased volume and in exchange for parting with some cash could get a credit “top-up” from another seller so that the seller may continue selling.
- As shown on the next slide, Tym2Sell allows sellers to act in a collaborative fashion by allowing any seller to transfer all or a part of their available balance to other sellers.
Technology Used
- Tym2Sell uses a unique fusion of WAP, XHTML-MP and compression to produce lightning fast transaction speed and ultra-low data usage on almost any cellular phone manufactured in the last 6 years.
- The entire application is language enabled and all screens, labels and messages can be easily customized by client support personnel and simultaneously displayed to sellers speaking a variety of languages.
- Sellers are sensitive to cellphone data-usage as they typically pay for it by kilobyte. Tym2Sell’s design uses a miniscule amount of cellphone data usage.
- If a seller goes through the entire menu system (multiple levels) and then selects a voucher to sell and sells it, the whole navigation and selling process involves just a single roundtrip to the server and just 4,200 bytes of data usage. In most countries 4,200 bytes of data will cost the seller around 0.1 USA cent.
- Database design closely coupled with server-side application allows a small server costing less than $10,000 to easily handle 15,000 sellers selling hundreds of thousands of airtime vouchers per day, all with sub-second response.
System Extensibility and Customization
Tym2Sell has “extensibility exit points” built into both the database (able to be customized by database administration personnel) as well as into the object model (able to be customized by programming staff) which allow full site customization by a customer to perform the following:
- Automatically feeding an external financial system with real-time sales data
- Allowing various discrete types of seller discounting models based on sales volumes / minimum target levels or level in the distribution chain.
- Allowing multi-level recruitment royalty schemes to be implemented. These could be based on receiving royalties from more than one level of recruits or schemes whereby royalty percentages increase depending on the number or quality of recruits.
- Adding some additional incentives (such as weekly prizes) based on certain sales or recruitment targets being met.
- Performing some additional sales validation. Such as not allowing certain sellers to sell certain items or only allowing certain sellers to sell in a certain way (e.g.. SMS of voucher numbers only).
Savings
- No data network costs (tiny cost carried by seller)
- No handheld or other devices (sellers use their own existing cellular phones)
- No fixed lines
- No shops, stalls or other formal infrastructure required
- No contracts (no trust needs to be established between seller and cellphone company)
- No credit exposure (as sellers must maintain positive balance)
- No equipment maintenance & insurance (the seller’s cellphone is their POS)
- You get a massive distribution network of tens of thousands of sellers spread to the most distant and remote regions of any country within weeks as it virally spreads with an almost zero investment in infrastructure or marketing.
- Stock holding is kept to minimum (all airtime voucher stock is on central server) – no stock held at various points throughout distribution network.
- Positive cash-flow turns into a huge asset.
Conclusion
Using a viral profit-based referral model Tym2Sell can build a country-wide airtime distribution model consisting of thousands of sellers in just a few weeks and with an almost zero investment in infrastructure or marketing!
This PowerPoint presentation provides a more detailed picture (including animations) of everything explained above. |