The recent decision by mobile operators to fully integrate their payment systems is a welcome relief to many Kenyans. The three mobile networks are Safaricom, Airtel and Telkom, with their mobile money wallets M-Pesa, Airtel Money and T-kash respectively.
The partial mobile money interoperability commenced in 2018. Back then one could send money person to person across networks, thereafter from April 2022 payments were allowed through the till number. From July 2022 the pay bill platform is available to all mobile money customers.
The above development builds on the person-to-person interoperability while at the same time enhancing financial inclusion. According to the Central Bank of Kenya, this development enables mobile money customers to pay for business transactions, including school fees and other essential utilities.
The Communications Authority of Kenya is the regulatory authority for the communications sector in Kenya. Established in 1999 by the Kenya Information and Communications Act, 1998, the authority is responsible for facilitating the development of the information and communications sectors including, broadcasting, cybersecurity, multimedia, telecommunications, electronic commerce, postal and courier services.
According to the CA, there are more than 60 million mobile phones connected to mobile networks in 2022.
The CA report indicates that Safaricom commanded the largest market shares across mobile money, mobile data and mobile broadband at 64.6 per cent, 98.5 per cent and 65 per cent respectively. Airtel follows in second position with 26.4 per cent, 0.8 per cent and 27.9 per cent across the three areas followed by Telkom Kenya, Finserve and Jamii Telecom. The three leading mobile money providers have more than 550,000 vendors countrywide.
The Groupe Speciale Mobile Association is a trade body that represents the interests of mobile network operators worldwide. According to GSMA, mobile connections in Kenya were equivalent to 114.2 per cent of the total population in January 2022. The number of mobile connections in Kenya increased by 3.7 million (+6.3 per cent) between 2021 and 2022.
Mobile money transactions have not increased as envisaged. To buttress the point the CBK specifies that mobile money accounts for only 6.59 per cent of total National Payment System throughput value despite the very high transaction volume.
The following are suggested strategies to increase transaction volumes through the NPS.
First, mobile money providers should sign up with agencies that handle huge cash transactions daily, for example, the Lands offices, police, judiciary, hospitals, parastatals like Kenya Ferry Services, county government revenue departments, private sector, manufacturers, suppliers and retailers, to mention a few.
Secondly, they should design innovative packages for the various categories of clients, including people living with disability who are often excluded.
Third, the mobile money providers should package their products to clients showing the advantages of using their platforms.
Fourth, the mobile money providers ought to consider increasing the transactions limits currently in place.
Fifth, mechanisms should be in place to allow for quick refunds in the event of wrong posting.
Six, mobile money customers should be enabled to access different services in case of technical hitches.
Seven, there should be in place possibilities for clients to change mobile money providers when they so desire.
Eighth, build an environment for seamless interaction among mobile money transfer platforms to create fair competition.
Nine, with fair competition customers are able to enjoy reasonably priced products on offer by the providers. Ten, the mobile money networks should market the special packages to clients showing the advantages of their respective platforms.
Eleven, increase the amount of money to be transacted on a daily basis. This could be on a tiered basis, for example, different amounts for businesses, high net individuals and other customers. Customise the cash ceiling to suit the different clientele.
Twelve, joint lobbying and advocacy for the national government to reduce tax on transaction costs, which are often passed to customers.
Thirteen, there should be established a mobile money Ombudsman to address disputes between mobile money players, other financial institutions and customers. Fourteen, advance policy legislation and regulation that enable safe, sustainable and innovative mobile money sector for all players.
Fifteen, there should be ongoing collaboration between mobile money players and banks through negotiated transaction and termination costs.
Finally, establish a dispute resolving mechanisms among mobile money players and other financial institutions. In addition, have a collective approach to fraud—a major concern for mobile money players.
In conclusion, there are numerous advantages accruing from the stratagems highlighted. These include extra revenue stream for mobile money providers. In addition, the continuous interfaces among mobile money transfer platforms create rational competition and hence lower pricing for customers.
Educator who also practices as a governance and leadership adviser. [email protected]; @GNjauGitu
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