The handheld cellular telecommunication device, most commonly referred to as a mobile phone, has transcended beyond its regular usage to an instrument of utmost ease and convenience. From the basic functionality of making calls after recharging airtime to “one device does it all”, the journey for the mobile industry has been all about innovation and progress. Today, the world boasts around 7.6 billion mobile connections with a global mobile penetration rate of 63%.

Apart from providing additional features like mobile data, mobile operators worldwide are taking steps to ensure that their subscribers receive the best, fastest and most secure services. Traditionally, mobile operators have offered pre-paid scratch cards to their subscribers to recharge their airtime accounts. This method was widely adopted and became the payment norm in the market. However, as a telecom operator in this cut- throat competition, this may mean that your company has entered a lose-lose situation with the subscriber. Here are 6 reasons why:
1. Pre-paid scratch cards are expensive and in-efficient
The complete logistical cost of generating, designing, printing, transporting, warehousing, distributing and managing inventory of scratch cards is overwhelming. To top it off, telecom operators incur a recurring cost of maintaining constant a supply of prepaid scratch card inventory at each and every distributor or reseller just to provide airtime to subscribers!
2. No real-time sales data is collected
With scratch cards sales, you are not able to see the daily impact of a sales promotion in one particular region in real-time. This information helps operators plan their promotional campaigns in a better way. There are also no real-time reports generated on subscriber or reseller airtime recharge data to forecast demand accurately. Identification of top resellers to incentivise or reward them under your loyalty program becomes challenging as well. With scratch cards, no real time airtime sales data is collected or is readily available for use.
3. Shortage of cards – customers maybe turned down
For resellers and retailers, prepaid airtime scratch cards are just one commodity that they offer among the myriad of other products available in their stores. In such a scenario, it becomes difficult to ensure timely refilling of each airtime denomination. If a reseller anticipates higher sales of smaller denominations and only keeps stock of that, he may have to turn down customers demanding higher denominations and vice versa.
4. Risk of theft or lost airtime scratch cards
Security is one of the most common reasons of downfall of prepaid scratch cards. Theft loss or misuse of cards is usual and forces resellers to either keep a low stock level or move towards keeping lower denominations to minimize their risk. This may result in lower average recharge value for your business.
5. Tedious airtime recharging process for the subscriber
The end user may have to wait in long lines to get the scratch card or may get turned down due to unavailability of a particular denomination or entire stock of scratch cards, especially nearing holiday seasons etc. Moreover, as compared to anywhere, anytime convenient electronic topup, the process of recharging through scratch cards doesn’t end here! The user also needs to scratch it and load the pin for the amount to be recharged in his account, thereby, making this method long and inconvenient for the subscriber.
6. Region based promotions, restrictions, offers are a challenging and daunting task
With printed scratch cards rolled out and available in the market, it is an intimidating task to manage region-based promotions. Commissions to resellers or promotion to subscribers can’t be controlled from one platform since reseller management is difficult.
These are the reasons why the once popular scratch cards bought in retail stores are now extinct in most developed economies. It is vital for every telecom operator to take measures to enhance user experience as well as maintain competitive edge by taking cost reducing innovative measures.