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TANZANIA:Life easier with closer cooperation of mobile telecoms and financial institutions
Upon not too long ago when mobile telephones had already started taking root into people’s live and the mobile financial services were just gaining momentum, receiving money from another service provider was practically unheard of.
Today thanks to benefits of interoperability, all this is possible and for business people especially, it is making a lot of sense and cents. Interoperability is basically the ability of a computer system to run application programs from different vendors, and to interact with other computers across local or wide-area networks regardless of their physical architecture and operating systems. Interoperability is feasible through hardware and software components that conform to open standards such as those used for internet.
Mobile telephone companies, banks and financial systems are increasingly co-operating, bringing down the barriers and cut-throat competitions. Unlike companies offering commodity goods and products, banks and telecommunication companies fully understand that without these peer-to-peer (P2P) linkages, they cannot succeed in the market.
The Bank of Tanzania (BOT) in February this year announced that Tanzania was the first country in the world to achieve full interoperability after mobile operator Tigo, reached an agreement with Tanzania to allow mobile money transfers between the respective mobile networks.
The full interoperability achieved in Tanzania is consequence of WB International Finance Corporation Financial Sector Deepening Trust (FSDT) and BOT efforts to advice and support Tigo and Airtel to reach a tariff agreement in accordance with the electronic wallet interoperability rules in September, 2014, and between Tigo and Zantel in December, 2014.
A report from the Tanzania Invest website cited that according to BOT’s Financial Stability Report released in December, 2015, payment systems operated by mobile phone recorded high rates of growth in volume and value, positioning Tanzania at the top of the world in terms of registered users.
Tanzania’s registered users of mobile payment services increased to 41,380,791 as of December, 2014, from 31,830,289 in December, 2013, marking a growth of 30 per cent and reaching a ratio of 84 per cent of adults using mobile phones for money transactions that surpasses Kenya’s rate at 68 per cent according to the WB.
It is for this reason that the Central Bank recently set a new financial inclusion target for Tanzania of 80 per cent of adult population using a financial access point by 2017, after the country exceeded the target of 50 per cent by 2016 under the National Financial Inclusion Framework (NFIF 2014/2017) with 55 per cent financial inclusion in 2014.
The full mobile money interoperability complements cross-border agreements reached by Tigo Tanzania in 2014 to allow its mobile money platform to transfer money with customers of the same network in Rwanda and Vodacom’s agreement with Safaricom Kenya in 2015 to allow transactions between their users.
During the recently held GSMA 360-Africa international conference in Dar es Salaam, the Tigo General Manager Diego Gutierrez noted that progress can only be achieved through interoperable co-operations.
It is the best way for companies to operate – competing through co-operation and linkages that cut across all the mobile phone networks and financial institutions. “Interoperability simply means that the game-plan has changed.
It means working with other mobile operators for it is not only good for the company but for the market as well.
It has signaled competing through cooperation and what is more interesting and of huge significance is that the customers are the better for it,” he said during a plenary discussion at the summit. He further said that there is more to be gained when the whole financial ecosystem is interoperable.
Key to that is the fact that it allows room to grow the market share, along with other players. As an operator, interoperability means that the market space of influence shifts not from just the customer base but to the entire population of mobile wallet carriers in Tanzania and it is a healthy business practice.
“This is good for the business, it is good for the industry and of course the customers who are the reason for all these innovations. From a Tigopesa perspective, interoperability has pushed us to evolve our customer value proposition to elevating and engaging our customers on what really matters to them in this whole MFS discourse – they want to send and receive and pay for goods and services with minimal inhibition” he added in his keynote address. Peer-to-peer interoperability is growing at an exponential rate.
One of the key and most positive indicators is the reduction in customer sending vouchers - an SMS code that can be redeemed at the sending operator’s agent for cash effectively as a Cash Out.
The benefits of using transactions other than vouchers are convenient, user-friendly and save money for both the user and the mobile company. There are a number of user cases that through interoperability will improve customer user experience and further drive the adoption of mobile financial services by governments, businesses and individuals.
“We have seen our growth in Voucher (Off-Net) transactions slow down from 34 per cent in 2015 to 3 per cent in 2016 whilst interoperability in 2016 have shown a 5 per cent acceleration on P2P growth.
The volume of interoperable transactions tripled in H1 2016 on H1 2015,” a statement from the company says. Interoperability of Bulk Payments or Business to Customer transfer will be a key driver where companies or institutions could distribute value or pay salaries irrespective of the mobile operator that the individual is using.
Another area that will require interoperability and industry collaboration is merchant payments where merchants could receive payments conveniently from any mobile operator’s customers.
Africa is projected to have twice as many affluent consumers as the UK by 2020 despite the varying socioeconomic demographics across the continent.
This optimism stems from the growth of telecom and financial services and the exponential spread of internet; more Africans have been noted using mobiles e-commerce apps.
SOURCE:DAILYNEWS
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