Telcos in Rwanda are seeking approval from the relevant government body in the country to roll out mobile money interoperability. The telcos, Airtel Rwanda, MTN, and Tigo Rwanda want to be given the go-ahead to roll out the cross-network mobile money transfer service which is already being implemented in Kenya.
Approval for mobile money interoperability will allow the service providers to begin commercial negotiations, “agree on tariffs and sign agreements with an independent switch provider,” and offer services across networks.
In Kenya, the service was rolled out in April following the completion of a two-month interoperability pilot carried out between Safaricom and Airtel which started in January.
In Rwanda, the National Bank has advocated for interoperability for years, but the telcos have continuously failed to reach an agreement. Tigo and Airtel, for instance, interoperated Tigo Cash and Airtel Money but MTN Mobile Money refused to link with them to date.
Should mobile money interoperability be approved in the country, customers will enjoy fewer transaction costs. Subsequently, it will promote financial inclusion.
Financial inclusion is part of Rwanda’s government’s agenda. It intends to link mobile money operators and financial institutions, in order to reach the financially excluded population.
Rwanda is likely to use the spoke-hub model of interoperability, where an independent investor operates a switch that facilitates off-net mobile money services.
“The spoke-hub model has the advantage of economies of scale. We are not only linking mobile money operators but also banks and microfinance institutions.” National Bank of Rwanda director of payment systems John Karamuka said.
He asserted comprehensiveness and inclusivity of the model because low-income people can use the service at affordable costs as is.
National e-payment switch of Rwanda, RSwitch Limited, is already connected to all banks in Rwanda, and this will play a major part in linking financial institutions and mobile money operators. Utilising RSwitch will help mobile money operators and financial institutions invest less into making mobile money interoperability a reality.
RSwitch chief executive Jean Claude Gaga said, “Financial institutions will only invest in the front desk of their systems translating into much lower transaction fees for the consumer and also a seamless user experience.”