In a traditional mobile payment implementation, Cash-Out is an expensive service where the service provider charges extra fees to perform a Cash-Out request.
Its a fact that you may have a big revenue churn generated only from Cash-Out service, and you still have an edge compared to other traditional and old fashion money transfer services. But sooner you will discover that you were another victim for this poisoned apple!
However you will have an edge from the fees side compared to other alternatives, but you will not have no chances to compete against other competitors from the same industry.
And when the prices war starts, you will notice that you don’t have any loyal customers. Customers will join multiple wallet services in their region and will simply transfer through the lowest rate offered and they will be your promotion period users-no more!
To avoid this critical situation you will need to activate your Anti-Cash-Out filter even before you launch your service commercially. Your day to day activity should include a detailed analysis for the Cash-Out transactions to understand the customer behavior and needs more. In order to detect the weakness points, which needs to be tackled to lower Cash-Out count to the minimum possible number. Zero should be your ultimate target!
Why Cash-Out should be considered as a poisoned apple?
Imagine Adam who Cashed-In 100$ and transfer it to his wife Diana, your system now collected 1$ as transfer fees and Diana’s wallet is now loaded with 99$. Diana went to the nearest agent and Cashed-Out 97$ after deducting 2$ fees, leaves you with 3$ profit.
This should be great, but you should consider that Diana was in need to purchase some books from the library, the librarian collected the money and went to the nearest restaurant for lunch, the restaurant guy went to the barber shop to get a hair cut, the barber visited the grocery to buy his weekly needs and so and so …
Lost opportunities:
You should be wondering now how much potential revenues you missed once you were focusing on the Cash-Out as your main revenue stream. It might be only 50 cents -0.5$- fees applied on purchase service but you should consider that there are unlimited purchase transactions around you and each new transaction will drop a penny in your pocket which means more and more profit.
Focus on your goals,
Cash-Out ends your system relation to the Cashed-Out amount and prohibits your from generating any extra revenue. It’s very risky ,, as Cash-Out service is a onetime terminal transaction, while purchases and financial trading will always be unlimited. A single Dollar might be traded million of times and the expected revenue will surpass the Cash-Out fees value regardless how large it was.
Conclusion,
- Cash-Out is a poisoned apple and you should hear the audience shouting Don’t eat .. Don’t eat!
- To limit the Cash-Out you must avail a robust and rich eco-system to support your customer needs and help them spending for their daily needs using your wallet service directly
- Always balance between the services availed in your service and the Cash-Out fees
- It not just a matter of count; services must touch real needs for your customers and should be a result of extensive market research and customer surveys
- Fast, secure and easy should be considered in each new service implementation
- Balance between day to day services and new fancy and innovative ideas, and make sure to develop in two parallel tracks
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