As highlighted in our previous blog, researchers often face numerous issues relating to politics, local culture, corruption, natural calamities etc. during field research. While many of these issues can be resolved by instating protocols and processes; at times, however, these can result in changes to the research design, methodology, or the sample. We briefly discuss below how our research team has dealt with different issues during field work in Egypt as well as within India. We also describe how these challenges affected the initial research design of our study funded by Bharat Inclusion Research Fellowship.

Fieldwork context — Cairo, Egypt

Political unrest: After the political unrest in Egypt in 2011, and after the initial research idea had evaporated, the research team decided to capitalize on the networks they had developed on the ground and embarked on a 3-year long journey of discovery. During these three years the research team managed to change the research focus from being on understanding the impact of mobile money on micro-enterprise performance, to understanding the impact of informal property rights on micro-enterprise performance. Although the new research questions were significantly different from the first, the change of focus allowed the research team to develop a deeper understanding of a previously unexplored but nevertheless very important variable, namely informal property rights.

Economic reforms: The devaluation of the Egyptian pound in 2016 led to the loss of 25% of the research sample. At first this seemed like a potential threat to the design of the research study. However, on further thought, the research team discovered that there was potential for a natural experiment that looked at the impact of currency devaluation on ability of micro-enterprises to survive financial shocks. The research team was lucky in that they had already collected a substantial amount of data prior to the change in policy. They are now analyzing this data to identify potential variables that led to the ability of micro-businesses to survive the shock. It is worth noting that the research team changed the research question and focus of their study when they realized that another opportunity had come up.

Fieldwork context — Karnataka, India

Weather: After delays in field work caused by the intense monsoons of 2018 in southern Karnataka (where our sample — coffee and tea plantations — are located), we had to change our research strategy to accommodate the plantation season. October to March is the harvest season and the busiest period of the year at these plantations in Karnataka. We realized that, in order to carry out our initial research plans, while accommodating the slowdown in work due to monsoons and plantation seasons, we would require an additional year of field work. In the face of budget and time constrains, however, we had to rethink the methodology in order to answer our research questions within the time frame. Furthermore, our preliminary qualitative surveys gave us insights into the cultural and behavioural barriers that the plantation workers — who are mostly women — face. Therefore, while our core research objectives remain the same, we have had to modify the design of our study in the face of logistical issues and qualitative survey findings.

While there are many barriers to adoption, including but not limited to high up-front costs in terms of time, money and effort, our preliminary surveys at two plantations in Karnataka have confirmed our initial hypothesis that many micro-merchants are reluctant to adopt digital payments primarily because individuals in their ecosystem — customers and suppliers — are not equipped to transact digitally. This in turn creates a vicious circle where customers, merchants and suppliers are individually unable to as well as less inclined to undertake transactions digitally. In such a scenario, behavioral interventions that aim to change the behavior of the various players in the ecosystem and encourage users to transact more digitally can be effective. Our preliminary findings also suggest that there is a skill gap, particularly among the female customers who could benefit from well-designed behavioral nudges that encourage them to learn about and use digital payment platforms and applications. We have therefore designed interventions that target the behavior of the micro-merchants and female plantation workers with regards to their financial payments. Furthermore, our key research objective is not only to test the impacts of these interventions but also to identify the peer effects of these within our sample.

Interventions

Our aim for this study is to test the impacts of low-cost scalable interventions at both the customer and merchant end.

Supply Side Adoption — Merchants. Most digital payment platforms offer financial incentives to users through cash back or discount coupons. While many users join these platforms to avail of such cash benefits, the regular usage of the platform can be limited for such users. For first time users, however, financial incentives can be an effective way to get them on board a digital platform. By initially allowing merchants and customers to try out digital payments to avail of financial incentives, transacting digitally can be turned into a habit through further behavioral interventions.

For our study, we will have merchants offer discounts to customers who pay digitally. We will not only reimburse the merchants for the discount, but also provide them with financial incentives to adopt digital payment in the first place. This will nudge both the merchants and their customers to adopt digital payments. After a month, we will discontinue the discounts, but create an artificial demand by requesting regular customers (plantation workers) to ask merchants whether they accept digital payments. This could be something as simple as “Do you accept payment through POS?” or “Do you accept payments through X/Y Apps?” Our aim is that by increasing the demand for digital payments, we would encourage merchants to continue to offer digital payments to their customers.

Demand Side Adoption — Customers. Our preliminary qualitative findings show that many users, especially women, feel uncomfortable using digital payments. However, the children and husbands of many women are often more tech savvy and familiar with transacting digitally. We therefore believe that if the women can be nudged by their husbands and children, it can greatly enhance their skills as well as improve their confidence in using digital platforms. Furthermore, we believe that this can have a snowball effect within their peer network, and encourage other women to start using this technology as well.

Our study is going to compare the impact of being nudged in a formal setting versus being nudged in an informal setting by your family members and peers. Compared to formal settings where these workers are informed about new technologies by people from outside their community, we argue that having a family member as the source of information will be more effective for two reasons. First, the women plantation workers will be better able to relate to the source of information (i.e. family members) which in return could reduce the resistance to change their behavior. Second, if the source of information is a family member, continued support will be guaranteed. A disadvantage of receiving this information from people outside the community is often that there is lack of continuous support until the behavioral change becomes a habit. Also, there might be issues of trust where the women plantation workers are unable to relate to the person providing the information. This could be reduced if the source of information or nudge is from the family and can answer questions whenever needed, until comfort with using the technology is achieved. Moreover, such training can have a chain effect among peers. Once some women workers in the plantations start using digital payments, it can motivate their friends and neighbors to learn about the technology and adopt it themselves. As we have already discussed, if individuals believe that others who are part of the same socio-economic group use a particular technology, then the fear of falling behind might encourage them to gain knowledge about that technology, and learn to use that technology. We aim to measure the peer effect of these nudges through our endline surveys.

Summary

Through this research, we aim to study the digital payment behavior of (mostly female) plantation workers and the micro-merchants they interact with regularly. Although we have changed our research design due to logistical issues as well as the preliminary qualitative findings, our key research question remains testing the impact of behavioral interventions and their peer effects in encouraging low-income consumers and micro-merchants to adopt digital payments.

This research was developed as part of the Bharat Inclusion Research Fellowship.