Namibia: Unfairness Alleged in MTC Money

MARCH 12,2014.

NAMIBIAN.

SOME Namibian companies involved in electronic money (e-money) operations allege that MTC Money has an unfair advantage and claim that its use goes against the country's competition law.

MTC Money, which was launched last month, is a product owned by the mobile operator, MTC, and the electronic payment systems company, MobiPay.

There are about five primary electronic systems payment providers in Namibia while the rest - about 15 of them - are subcontractors.

Company officials, who refused to speak on record because they use MTC for their mobile services, say the Bank of Namibia, the Namibian Competition Commission (NaCC) and the Communications Regulatory Authority of Namibia (Cran) should not have allowed the product to go on the market.

They allege that MTC Money violates some provisions of the Banking Act, and that while they pay for MTC services, MobiPay is getting them for free, a fact they argue, goes against fair competition.

Another contention is that since their data goes through the MTC network, it could be passed on to MobiPay, which could then use the information for its marketing and growth strategies. This, they argue, is the reason why South African mobile operators run their own mobile finance services and are not in partnerships with other companies.

They further question why the Bank of Namibia provided a payment licence to MobiPay, which is now being marketed as MTC Money. They are wondering if the central bank approved the MTC Money name or whether it is permissible to obtain a licence under one name and operate under a different name.

Bank of Namibia spokesperson Ndangi Katoma said although MobiPay has an e-money licence, the central bank has not awarded a banking license to MTC/MobiPay.

"MobiPay is an authorised issuer of a payment instrument, that is electronic money," he said, adding: "MobiPay is a non-bank payment institution, whereas FNB and Standard Bank are bank payment institutions. It is not MTC that is allowed to do financial transactions, but MobiPay, by virtue of it being a Bank of Namibia authorised issuer of a payment instrument."

Katoma also said MobiPay has been authorised, in terms of the Payment System Management (PSM) Act, to issue a payment instrument.

He said the act makes provision for both bank and non-bank institutions to provide payment services.

In a written response to questions sent by The Namibian, NaCC corporate communications officer Dina Gowases said they could not approve the transaction between MobiPay and MTC because according to the provisions of the Competition Act 2, it is not a merger.

Gowases said a merger occurs when one or more businesses directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another company.

"This is not a merger as defined in terms of the Act. Therefore, it is not a notifiable transaction to the Competition Commission," she explained.

Asked whether MTC's access to other companies' data bases, and at the same time being a partner of MobiPay, was not against the Competitions Act, she said the Commission is empowered to investigate conduct that relates to anti-competitive practices received through a complaint or information.

"It is our role to promote and maintain fair competition in Namibia in order to enhance economic growth and development of the country," she said. "In addition, if businesses are dominant on the market and are accused of abusing such dominance, the NaCC can investigate and penalise should they be found in violation of the competition law."

Gowases further said no complaint or information relating to MTC Money has been received so far.

"If the NaCC receives a formal complaint and information relating to such conduct, the Commission can decide to investigate the allegations, pronounce its decision and impose a penalty on the guilty parties. We strongly discourage anti-competitive practices such as price fixing arrangements, collusion, market allocation and tender rigging," Gowases explained.

MTC spokesperson Tim Ekandjo has defended MTC Money, saying its partner, MobiPay, has a Mobile Payment Issuer Licence and that if they did not have this licence, the Bank of Namibia would never have allowed MTC Money to operate.

Cran corporate affairs consultant Kay-Leigh de Sousa said the matter is not under their jurisdiction since it is a financial service and, therefore, falls under the Bank of Namibia's regulations.

De Sousa said companies that feel discriminated against may lay a complaint with Cran.