Telecoms, regulators must fix cross-network mobile money transactions

Thursday August 22 2019

 Innocent Kawooya

Innocent Kawooya 

By Innocent Kawooya

When Nick Hughes, and Susie Lonie, under the leadership of former chief executive officer and current chairman of Safaricom, Michael Joseph, founded M-Pesa in 2007, their key outline was to make money transfers seamless, efficient, affordable and accessible to all.
They set a new revolution, which in 2009, MTN clutched onto to become the first telecom in Uganda to venture into what would later be christened - mobile money.

Since then, a lot has happened and trillions of shillings is moved annually through mobile financial services.
Financial markets have changed a lot since 2009, mainly driven by innovations in Fintechs, a number of which are anchored on presenting new experiences with mobile money and Internet banking.

Key innovations, driven by government institutions such as the Central Bank, have also been adopted with the aim of improving financial markets as well as realigning them around particular deliverables that are within some government targets.

In 2017, the Central Bank directed telecoms to implement mobile money interoperability, which would subsequently enable cross-network and cross-border mobile money transactions.
This, in a way eased and saved customers both money and time because it meant that a mobile money subscriber on MTN would easily send money to another on Airtel Money in real time, although at a slightly higher rate.

Unfortunately, however, this service (cross network money transfers) has since June been unavailable, with both Airtel and MTN citing technical failures for the unavailability.
Minus being a clear step backwards, the on-going suspension, which the Central Bank is aware of, has been an inconvenience to customers and some have had to lose money in the process.

For instance, in one scenario and this I know for a fact, an MTN mobile money subscriber transferred money to an Airtel Money user recently, however, the senders account was never debited yet the money had been received on the other end.


Three weeks later, the money was deducted and a message which I will reproduce for purpose of this article, was sent through informing the user of the deduction.
“An adjustment has been made and (amount in UGX) has been withdrawn from your mobile money account at 2019-07-05 ..." the message reads in part.

But the chaos did not end at that. A week later, Airtel also debited the recipient’s account and a visit to an Airtel service centre was a shocker in itself.
The subscriber was told that whereas he had received and withdrawn the money, MTN had not remitted the same to Airtel.

In another case, an MTN mobile money customer initiated a transaction to an Airtel Money customer.
However, on this occasion, no money was transferred but a few days later, the account was debited on the understanding that MTN had processed the transaction on its end but was blocked by Airtel.

An inquiry about the matter required the complainant to present mobile money statements (for his account and that of the receiver) to prove that the transaction was indeed unsuccessful.
Luckily, within a few days, a refund was effected after it was verified that indeed the transaction was blocked.
In both examples, it is the customers at pain, taking the blows for a failing system.
True, we appreciate the challenges of technology, but there is no justification for an indefinite suspension of a service that involves movement of billions of shillings from one end to another.
It is surprising that no public explanation has been provided yet many users are not aware of what is gone one.

For whatever reason, the current impasse is unwarranted, more so at a time when mobile money has become the key mode of transaction.
Beyond this, there is need for Uganda to get on the global stage. For example, MTN and Orange already signed a joint venture that will enable subscribers transact across networks in Africa.
Therefore, more stakeholders must join in to advocate for seamless mobile money transactions.

As Digital Impact Awards Africa, we have been involved in sensitisation drives that seek to get the best out of technology such as mobile money interoperability.
Operators in Uganda must move faster to build relevant and cost-effective services that have a goodwill aspect in them.
MTN and Airtel should ensure that cross-network mobile money services are restored given the role they play in the financial markets.
The Central Bank and other regulators such as Uganda Communications Communication must as well take interest in sorting the current failure to assist the industry.

Mr Kawooya is the project lead at Digital Impact Awards Africa.