KENYA: Telkom in push to have cross-network agent dealings
Telkom Kenya is pushing for implementation of agent and merchant interoperability to ease the process of cross-network transfers.
This year, telcos in Kenya implemented technical interoperability — where users are able to send and receive money directly from or into their accounts across the different networks, seen as the first step in levelling the playing field.
“Technical interoperability is just 10 per cent of what needs to be done to ease the process of cross network transfers. There is need for agent and merchant interoperability,” said Telkom Kenya Chief Executive Mugo Kibati in an interview with the Sunday Nation.
If implemented, agent and merchant interoperability would mean that customers for example, on T-Kash will be able to withdraw funds from Safaricom’s M-Pesa or Airtel Money agents and vice versa.
“We need to get to a threshold where agents make money from the float. If this is not doable, then the agents will not allocate float to other players beyond the dominant player,” said Mr Kibati.
Similarly, he stated that the merchant system should be integrated as is the case of the banking system. Despite having a smaller customer base in terms of card usage, customers are able to swipe their cards at pay points regardless of the bank running the merchant’s card reader (PDQ machine).
The integration of wallets, merchants and agents is seen as a first step to evening the playing field that currently has Safaricom dominating the telephone, mobile money and mobile Internet subscriptions in the country.
According to Mr Kibati, the market dominance by a single operator in the telecommunications industry should be broken as recommended by advisory firm Analysys Mason to foster innovation in the industry.
“There is need to implement the dominance report. Customers suffer when the dominant player is so deeply entrenched,” said Mr Kibati.
The government pushed for the seamless cross-network transfers to help level the market and reduce Safaricom’s dominance, ICT Cabinet Secretary Joe Mucheru said when the service was launched.
This however has not been the case as data from the Communication Authority showed that the introduction of cross-network money transfers via mobile phones in April has failed to cut M-Pesa’s dominance.
The reduced cost and ease of receiving cash across networks has not eased M-Pesa’s grip of the money transfer market, which moved Sh2.03 trillion in the three months to September.
The Treasury in 2016 identified technological disaster in the M-Pesa-dominated mobile money sector as a potential fiscal risk for Kenya, saying a blackout on the platform could cost the government “substantial” losses in corporate tax revenue.
The worst case scenario has played out month after Safaricom was hit by an outage estimated to have cost the economy billions of shillings.
A similar outage hit the provider in July and April 2017 cutting off communication for users on the network, pilling pressure on the industry regulator to get a solution.