To talk or not to talk to each other
Omen Muza
There is increasing disquiet at the lack of inter-operability among mobile money offerings in Zimbabwe.
The current situation is characterised by mobile network operators (MNOs) having their own wallets that largely don’t talk to each other, in the process creating isolated value propositions that actively compete against each other at the expense of collaboration.
Understandably, there are fears that a lot of infrastructure is being duplicated as a result. Experts, therefore, point to the need for interconnections between wallets for mobile money initiatives, if they are to achieve their full potential.
Along with the need for inter-operability, there is an emerging view that financial services offered as a result of mobile money need to be enhanced through appropriate value-added services.
Moving the banks’ cheese Currently, in their individual capacities, market players’ only interest appears to be to ensure that they are ahead of the pack in all material respects.
For instance, on July 16 2014, Telecel added value to TeleCash, its mobile money offering, by launching the Telecel Gold Card which can be used at more than 5 000 ZimSwitch points countrywide.
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Within two weeks, EcoCash had launched the EcoCash Debit Card, essentially a MasterCard which can be used on MasterCard-licensed ATMs and merchants who accept MasterCard cards, effectively making it an international card meant to eclipse the Telecel Gold Card.
To signify the intensity of this competition, the other day I heard a pro-Telecel radio announcer asking – tongue firmly in cheek – “Why go for the Master when you can get all the Gold?”
Against this hectic competitive backdrop, it is tempting for banks to view themselves as spectators of the spectacle of MNOs slugging it out for market share, but the reality is that the combined effect of the MNOs’ card products, for instance, is eating significantly into the market for bank card products which is traditional bank territory.
MNOs are moving banks’ cheese, or, should I say, eating their lunch.
Whereas in the past I needed to meet stringent conditions in order to qualify for a bank account which ultimately made me eligible for a Visa or MasterCard product, now all I need is a mobile telephone line from one of the MNOs.
Inevitably, some of the cross-border payments that used to be carried out through banks in the form of expensive telegraphic transfers can now be easily carried out through the EcoCash Debit Card for instance, and through the Telecel Gold Card when it eventually gets integrated with either Visa or MasterCard.
Differentiation through value-added services There is no doubt that mobile money solutions such as EcoCash, TeleCash and OneWallet have been instrumental in driving financial inclusion for a large number of people who were previously unbanked or under-banked.
Now that the first phase of the mobile money revolution – putting the infrastructure in place – is done and dusted, everyone is at the same level and there must be a way for MNOs to differentiate their offerings, hence increased focus on value-added services.
Beyond financial inclusion, operators are now actively engaged in driving economic inclusion by merging technology into everyday life, hence the raft of products such as EcoCashsave, EcoCashFarmer, EcoSchool and EcoCash Health and now the card products.
Banks still have a say Although banks pioneered mobile banking, it was mobile operators which introduced mobile money transfer services at a meaningful level in Zimbabwe because of their inherent strengths.
Until very recently, however, the mobile channel has been offering little more than a view of balances and transactions as well as transfers between accounts.
The current regulatory framework, however, makes it imperative for MNOs to team up with banks in order to offer more sophisticated financial products.
This means that banks not only have the opportunity to play a meaningful role in the value-addition framework for mobile money, but also to actually have a huge say in the direction it takes. Why do I say so? Banks have the requisite experience in creating and marketing financial service products and they have the size and scope to back up their financial offerings and manage the attendant risk.
MNOs, on the other hand, have the reach and their penetration into huge swathes of unbanked customers who are looking for affordable banking services that is typically unrivalled.
Between them, MNOs and banks should therefore be able to collaborate in delivering the required value-added services. MNOs or Telcos have no doubt taken the lead, but they can’t forge ahead without banks.
Non-bank players join the fray The quest for value-added services is not — and should not — be confined to MNOs and banks alone.
Other nimble non-bank technology players have joined the fray. In the past few months alone, several have come to the market with products that seek to either integrate or manage mobile money services.
In May 2014, local technology firm Cash Application Universal announced the release of its first version of wholly Zimbabwean Windows-based mobile money management software called CAPU which enables systematic management of mobile money usage.
In June 2014, Kuronda Venture Partners unveiled a platform called wiPlatform that allows real-time mobile transacting at the Point of Sale and also allows retailers to accept withdrawals and deposits on behalf of banks.
In the same month, Zimpost revealed that it was working on a new financial service platform called Financial Switch to be connected to all banks as well as other service providers.
Feedback: [email protected]. Omen N Muza writes in his personal capacity. You can view his LinkedIn profile at zw.linkedin.com/pub/omen-n-muza/30/641/3b8
