Telcos in Rwanda are seeking mobile money interoperability approval from the relevant regulator. This move could see a nosedive in transaction costs in the country.
Airtel Rwanda, MTN, and Tigo Rwanda want to roll out cross-network servicesas has been done in Kenya and Tanzania.
Approval for mobile money interoperability in Rwanda 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.
The National Bank of Rwanda 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, customers in Rwanda will enjoy fewer transaction costs. Subssequently, 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. National Bank of Rwanda director of payment systems John Karamuka said, “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.”
He assserted 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.”