Mobile money has increasingly become a critical part of every Kenyan’s everyday life.
The challenge is therefore no longer about the uptake of this service but ensuring that the industry maintains momentum and continues to deliver more value to Kenyans and the economy at large, through both reach, and creative innovative solutions.
Already, the service has had great impact in facilitating person-to-person transfer of funds, making payments for goods and services, as well as many other applications across the ecosystem, such as mobile banking and other financial services.
Huge opportunity also exists in mobile money systems becoming interoperable. By making the systems interoperable, the velocity of money transactions across mobile wallets will be greatly enhanced, irrespective of whether the sender and receiver are on different operators’ systems, translating into great economic benefits for the country.
It also sets the foundation of interoperability at a larger scale, e.g. between the mobile money interoperable systems, as those of the banks, to create an even larger ecosystem and wider financial inclusion.
At the moment, transfer of money across mobile networks is both tedious and inconvenient for consumers. The recipient does not receive the cash in his e-wallet and can only withdraw the money from the sending network’s agents.
Further, he must draw the entire amount in cash, within seven days, otherwise it is returned to the sender. This creates inconvenience for both the sender and the recipient.
Interoperability eliminates these hurdles as the consumer now receives the money directly into his e-wallet irrespective of what other network it originated from.
Another obstacle that currently exists for the consumer in sending money across networks is that such transactions attract higher charges than those within the network and this is not what mobile money users want.
Subscribers want to have a seamless system with uniform costs for transactions across networks, best delivered under an interoperable regime. In the absence of this, players who already command a significant market share control the behavior of the market.
The Kenyan industry has already made strides towards interoperability, working together to deliver on this for all customers. Telkom, that has long been in favour of a cross-network money transfer system, is pleased to have participated in driving this process since its inception.
Fortunately, these are not entirely uncharted waters. Tanzania offers great lessons for taking this strategic direction through industry-led initiative. About two years ago, four operators came together to interconnect their mobile money services for person-to-person.
This had been heralded by bilateral agreements between players. A 2016 study by global industry body, GSM Association, found that the move had translated into interoperable person-to-person transfers contributing up to eight per cent of the total value and volume of transactions. This impact is expected to grow further.
Interoperability of mobile money platforms is the future of Kenya’s mobile money industry, not only for person-to-person transfers, but also Agent and Merchant transactions.
It is the only way that we can consolidate the gains that we have made, earning the country global attention and admiration for the penetration and growth of mobile money.
ALDO MAREUSE is CEO, Telkom Kenya.