Telecommunications giant MTN Uganda recently realized mobile money interoperability, implying that millions of Ugandan digital bankers can now send money from MTN to other networks operating mobile money in Uganda.
These networks are Africell, Uganda Telecom and Airtel. According to a 2017 report by Twaweza East Africa, MTN Uganda claims more than 50% of the mobile money market in the country.
With this new interoperable mobile money system, you can send money from MTN to other networks in Uganda in real time just as you’ve been doing with phone calls and short message services.
Also, important to note, the system also allows MTN mobile money users to receive money from other mobile network operators.
How it works
Previously, to send money from MTN to other networks, you had to visit a mobile money agent to carry out the transaction on your behalf after which you’d pay them Shs1000.
But now, you can initiate and complete the transaction from your cell phone.
To send money from MTN to other networks in Uganda, you’ll dial the USSD code *165*1*1#.
On dialing the code, a pop-up will appear asking you to feed in the number you want to send the money to.
The process after here is the same as what you’ve been doing to send money to a fellow MTN mobile money user: verifying the name of the receiver and entering your PIN code.
To spice up its mobile money system, MTN Uganda also partnered with MTN Rwanda and Safaricom to facilitate regional cross-network mobile money transfers.
To use this service, you’ll dial *165*1# and then select ‘International Transfer’.
Benefits of mobile money interoperability
Now, you might be asking yourself why governments across the globe are ordering telecommunications companies to facility cross-network mobile money transfers.
In Africa Tanzania, through Airtel Tigo, Zantel and Vodacom, Tanzania was the first country to implement the service followed by Madagascar (Airtel, Orange and Telma). Other countries are Nigeria, Ghana, Kenya, Rwanda and Egypt.
With an interoperability system, a mobile money user sends money directly from their wallet to the receiver’s wallet in real-time thus cutting out intermediary steps.
Without interoperability, senders and recipients of transfers need to visit multiple agents to make transactions with different networks and must cash out or in, each of which is subject to fees.
So when a digital banker sends money from MTN to other networks using this system, they’ll have saved time on visiting the mobile money agent and the charges encountered in the process.
The recipient gets instant access to digital money. This makes the process safer as there is already a growing body of research that shows that when a society uses less cash, the rate of crime goes down and the sense of personal security.
Interoperability also drives customer stickiness and user experience by facilitating quick and easier money transfer. It also provides operators with a treasure trove of data on financial transactions which may help them to drive further use cases in credit banking, insurance and so on.
On a broader level, by lowering the usage of cash in the society, interoperability will help the government to lower the cost of managing cash, which takes up as much two per cent of the GDP in many countries.
In case of system glitches like what happened with Safaricom recently, customers can still transfer funds.
The implementation of interoperability will, however negatively affect businesses that have created apps to enable interoperability.