Earned reward applications: Users’ perspectives from India

This post was written by Gayani Hurulle and Helani Galpaya, LIRNEasia

“If someone clicked on that link, it was a lottery for him.” Sidharth*, a 19 year old undergraduate from Delhi, is not referring to an online casino, but instead to Taskbucks, an application that has allowed him to earn free data by referring the app to his friends.

Provision of free and subsidized data has become a key talking point in the internet policy arena. Indian policy makers prohibited its telecommunications service providers (TSPs) from providing zero rated content, what users recognized as “Facebook Fridays” or “WhatsApp Packs”, in early 2016. Its rationale was that TSPs should not be able to act as gatekeepers and subsidize access to selected websites or apps as it violated the principles of net neutrality.  The Telecommunications Regulatory Authority of India (TRAI) subsequently began searching for alternative means of providing free data, just without intervention from the TSPs.

mCent, Ladoo, Taskbucks, Champcash and Databack are examples of a workaround which we call “earned reward applications”. These services’ basic premise is that users will first download the app, and then engage in a series of micro-tasks through the application (app) to earn rewards.

How do users earn rewards?
Earned reward apps are varied and have different incentive structures– characteristics of a few are shown in Table 1.

Table 1: Earned reward applications: micro-tasks to earn rewards and type of rewards**

Name of app Micro-tasks to earn rewards Type of reward
Downloading/using sub-apps Referring app to friends through messaging services Funds to mobile wallet Mobile recharge
Main balance (Talk-time/SMS/data) Talk-time only Data only
Databack
Freecharge
Hike
Ladoo
Mango
mCent
PayTM
Taskbucks

Source: Google Play Store, LIRNEasia qualitative research (2017)

Providing mechanisms to earn rewards was the principal use of a number of apps. Many apps in turn allow users to download other-apps through it, to earn rewards — mCent, for example, rewards INR 37 (USD 1) to those who downloaded the Amazon app through its app. Apps like PayTM transfer rewards to mobile wallets. Some others provide mobile recharges; some apps will only provide data or talk-time recharges, while others recharge the “main balance” which can be used towards talk time, data and SMS.

Users’ perspectives were discussed through a series of focus group discussions in which 83 poor and middle-income respondents in Delhi spoke of their internet use experiences. The research commissioned by Mozilla was conducted by LIRNEasia, a regional think tank focusing on ICT policy and regulation, in December 2016.

1. Cost conscious consumers were skeptical
A number of respondents had heard of earned reward apps but were reluctant to use them. Soniya* spoke of how distinguishing between those which were authentic and those that were not would take too much time. Others were weary of the constant notifications they could receive once they signed up with the app.

Some said the data requirement to first download the app was too high.  The information asymmetry caused by users not knowing the data allowance required to download the app caused them to hypothesize as to whether the potential reward would exceed the cost. A respondent noted however, that it would be worthwhile if the app could be downloaded via a public Wi-Fi connection. This would allow him to download the app without incurring additional costs and then earn rewards, which could be used towards purchasing data in the future.

2. Difficulty in retrieving rewards and lack of content preventing long-term use
Sidharth* who likened his early experiences with an app to a lottery, spoke of how the returns from using the app had diminished over time and was thus disillusioned. Some respondents had little success in obtaining the rewards promised. Such experiences could have been due to a number of factors ranging from a faulty app to the users’ skills being insufficient to retrieve the reward.
Rishi* spoke of how the lack of sufficient sub-applications to download prevented him from using the earned reward app for a sustained period of time. He had used it a year prior to the fieldwork but had stopped subsequently as he had earned all the rewards. Sustainability in the use of applications may arise, particularly where users are rewarded for downloading sub-apps rather than for using them. Also, limitations may arise as users have to refer friends in order to earn rewards, since most “pyramid-like” reference systems have a limited shelf-life before collapsing.

Others complained about needing to keep a downloaded app for a certain period of time before rewards could be earned – a difficult thing to do for those who had phones with very limited memory.

3. Mobile e-commerce popular following demonetization– rewards earned through referrals
The use of mobile apps to engage in e-commerce was commonplace among respondents. In our sample, the use of PayTM was triggered largely by demonetization that occurred a month prior to fieldwork. Khushbu* stated that “The current use of PayTM is greater because of the currency issue. There is such a long queue in the banks.”

Some respondents used the referral system of PayTM and Freecharge to earn rewards; some used these apps to pay monthly utility bills, for which they received a rebate of INR 100 (USD 2).

Implications on Net Neutrality
TRAI banned TSPs from providing zero-rated content because it did not want TSPs to act as gatekeepers. At first glance it seems a new set of non-TSP gatekeepers have emerged – the earned rewards apps “nudge” users towards using and promoting certain apps, at least in theory. Yet our research showed that at least as of now, none of the users limited their Internet experience to the promoted ads. In fact they were savvy users, who “play the game” (i.e. download the promoted apps, referred friends) purely in order to earn monetary rewards, which they then converted to talk time/data/e-commerce transactions. In fact, their “regular” use heavily skewed towards social media and appears to not have changed due to these earned-rewards apps and the relevant rewards. So far, fears of a “tunnelling effect” on users seem premature.

*name changed
** at time of fieldwork