Firstly, is platform-level interoperability, which allows users of one service to send money to customers of another service? It may also be defined as wallet-to-wallet interconnectivity.
Second, is what is referred to as agent-level interoperability, which permits agents of one mobile money service to serve customers from a rival telco.
Thirdly, is customer-level interoperability, a case in which customers can access their mobile wallets through any SIM card.
The Communications Authority (CA) of Kenya as the industry regulator- needs to move in and enforce the first two types of mobile cash interoperability.
It appears Kenyan telcos have chosen to hide under the cover of USSD to frustrate real mobile money interoperability.
Interestingly, Analysys Mason, the firm hired by the regulator to conduct a market study into the competitiveness of Kenya's telecoms sector, also called for enforcement of seamless mobile money interoperability.
The consultant's report concluded that CA needs to develop, beforehand, regulations on use, pricing and access of USSD and SIM application tool kits to tame anticompetitive behaviour.
It also called on seamless wallet-to-wallet mobile money interoperability and agent-to-agent interlink — recommending that agents use the same float for all platforms. A mechanism to settle or clearing house for the telcos should be set up.
Implementing these recommendations will greatly enhance competition and quality of service in Kenya's vibrant mobile money space.
Despite earlier opposition from commercial banks, bank-to-mobile interoperability has already been achieved in Kenya. The link has turned out to be a win-win for both banks and telcos as they rake in handsome fees and commissions from the service.
NAOMI THOIYA, Fintech Communication Specialist.