A typical mobile money agent in Kenya today is, more often than not, likely to have another existing business.
The agency is usually run within a butchery, kiosk, grocery, hotel or other such micro-enterprise. That a standalone mobile money agency is a rarity, is perhaps the clearest demonstration of just how uncompetitive it is to operate this kind of business on its own in Kenya.
Despite the admiration that the mobile money revolution in Kenya continues to generate globally, parts of the ecosystem, such as its network of agents, does not seem to be benefiting as much.
Granted, the mobile money agency network, currently estimated at about 185,000 agents, according to statistics from the Communications Authority (CA), has created opportunities for individuals to earn livelihoods.
However, they still operate at a bare minimum, their huge potential notwithstanding. The opportunity lies in unlocking the potential of today’s mobile money network by rethinking the ecosystem to prepare it for the next phase.
The future mobile money agency is network neutral. It is one that will accept and process transactions initiated by subscribers from whichever network.
This will empower agents to generate more returns from their investments; since locking them to just one operator denies them the opportunity to make more money. For the subscribers, such an arrangement opens up the entire mobile money agency system and puts it at the disposal of the 28.2 million mobile money subscribers in the country, according to CA statistics.
An interoperable system delivers unquantifiable benefits to the entire ecosystem – from subscribers to agents and even operators. To the agent, an interoperable network means more revenues that can justify their agency operating as a standalone business.
To the consumer, it will deliver convenience, since they will not be boxed into a single platform as they can freely transfer money to users on other platforms.Thus, the challenge now is for the industry to facilitate this transition into the future of mobile money.
This is the only way to unlock the full benefits of interoperability, already started with wallet-to-wallet interoperability that is currently being implemented, albeit with some teething problems.
Of importance will be the need for a sustained regulatory nudge and support for this system to thrive. Operators will also need to co-operate in operationalizing agent-to-agent interoperability, just as they have been doing for wallet-to-wallet.
The future involves more than just infrastructure fueled competition – it will have to be on innovation and value. Infrastructure, for instance, would have to be put up and maintained under a joint industry initiative.
Once infrastructure has been put up, any player can use it. Operators, in the background, would have arrangements on how they compensate each other for agent acquisition. However, agents would not need to maintain different floats for different networks – one will suffice.
This way, the agent becomes a money point, sorting out all mobile money challenges of any subscriber.
The best comparison for this is what is happening with bank Automated Teller Machines (ATMs). They are interoperable and withdrawals are possible from any machine.A mobile money agent with similar capability would create more meaningful jobs and generate more substantial wealth for the entrepreneurs.
A major drawback stems from fears by players already commanding substantial portions of the mobile money market in Kenya that opening up the agency network would erode their competitiveness and eat into their market shares.
Operators should not derive benefits by protecting their turfs, at the expense of consumers and agents. Whereas agent interoperability is still at its nascent stages internationally, Kenya has every reason to lead the wave. After all, isn’t this the cradle of mobile money?
Kenneth Basanga, Nairobi.