Session 2: Mobile money and industry

Ms. Tumuzoire of MTN Uganda described the industry’s experience with mobile money. As the industry has grown and evolved, so has MTN’s role and products in significant ways. Their transaction base has grown by 117% over the last three years with an average weekly transaction of three per customer and led to higher customer retention. With developments in the industry, MTN is looking at regional cooperation with banks and other telecoms operators, and there is the expectation that there will be greater integration with financial institutions, although regulatory support is critical. For this, MTN says it will need flexible and favourable regulation, but there is room for further enhancing the regulatory environment which will improve the non-exclusivity of agent networks. The challenges they face are around theft and cyber-fraud, especially around identifying the source and utilisation of funds. National ID schemes should help with this. The overarching goal for them, and others, is to allow interoperability across systems.

Providing a view from the banking sector, Julius Kipng’etich from Equity Bank in Kenya, commented on the role for mobile money has in extending financial access to rural areas. He noted that Kenya’s experience, though, was somewhat unique in its success. He claims this was due to a unique market nature which mobile money met. This success brought banks and telecoms operators into direct competition, with banks seeing significant cost-savings with transactions moving to mobile money. However, telecoms rely far more on agents, and regulation that prevents an expansion of agents, holds back mobile money in Uganda. The success of the market will ride not just on regulation but also on the extent of technology, but this is expected to bring substantial change very quickly. This might well bring in unexpected new players from other areas, such as e-commerce or social media.

Moving forward, interoperability is the main factor for a better market, and all actors’ participation is critical for this. What the bank needs from the regulator is: a reviewed, risk-based customer profiles and identification, a tiered agent structure which includes all players, and fair access to infrastructure for all players, including the secure elements of the SIM card.

Ms. Nabisubi of KPMG Uganda drove home the point that our collective challenge is how to develop the eco-system and improve it for the end user.