Telecoms and Regulators Must fix Cross-Network Mobile Money challenges.


Innocent Kawooya.

When Nick Hughes, and Susie Lonie, under the stewardship of Safaricom CEO Michael Joseph founded M-pesa in 2007 in Kenya, key on their agenda was to make money transfers seamless, efficient, affordable and accessible for everyone; the rich, middle class and the poor.

Then in 2009, MTN became the first telecom in Uganda to venture in to the financial sector with the roll-out of MTN Mobile Money.

Since then, a lot has happened; underscored by millions of Ugandans transacting trillions of shillings through mobile financial services annually.

In a bid to further broaden the mobile money transactions coverage and also enhance financial inclusion, Bank of Uganda (BoU) in 2017 directed telecoms offering mobile financial services (MFS) to implement mobile money interoperability.

Digital Impact Awards Africa defines Interoperability as “the ability for mass market users of digital financial services to perform transactions between accounts at/of different providers, for the case of this article sending money from Airtel to MTN and vice versa.”

Both MTN and Airtel heeded to the BOU directive and subsequently enabled both cross-network and cross-border mobile money transactions.

For over one year, this new service saved customers both money and time in additional to mitigating safety threats that come with handling hard cash.  An MTN customer intending to send money to an Airtel Money customer could do so automatically from his/her phone thus eliminating the hustle of withdrawing cash from an MTN Mobile Money agent and then sending to the intended receiver’s account through an Airtel Money agent.

Unfortunately, Mobile Money Interoperability amongst Uganda telecoms was indefinitely unavailable between late June and 23 August 2019, with both Airtel and MTN citing technical failures as the root cause of this impasse.

Minus being a clear step backwards, the on-going standoff between Airtel and MTN Uganda which has been brought to BOU attention has seen customers directly lose their hard earned money and waste a lot of time. Let me give just two examples.

In one scenario, an MTN Mobile Money user sent money to an Airtel Money user; the latter received the money but for some reason, MTN didn’t deduct the money from the former. Three weeks later, MTN deducted the money and communicated the same in a message which copy I was showed and can reproduce here and now.

“An adjustment has been made and (amount in UGX) has been withdrawn from your mobile money account at 2019-07-05 ………..”

Surprisingly, a week later, Airtel Uganda also deducted the same amount from the recipient. When he visited an Airtel service centre to find out why his money was deducted from his account with no explanation, he was told that while he received and used money on his account, MTN hadn’t remitted the same to Airtel thus this latest cash withdrawal.

In another scenario, an MTN Mobile Money customer initiated a five figure transaction to another Airtel Money customer, the latter didn’t receive but a few days later, money was deducted from the former’s account because MTN had processed the transaction on its side. But Airtel blocked the same and thus the intended receiver didn’t get anything.

When the original sender shared his grievances with MTN Uganda, he was asked to present mobile money statements (for his account and that of the intended receiver) to prove that the transaction was unsuccessful, after which MTN would gladly do a prompt refund. Luckily, within a few days, the sender was able to get the two signed account statements and his money was promptly refunded.

In both examples, the customers are at pain because the systems are not communicating. As a technology advocate, I appreciate tech and its shortcomings. I know for sure that there are always system failures and downtimes every once in a while. But this doesn’t justify the indefinite suspension of mobile money interoperability services between these two giant telecoms to date.

Nonetheless, for whatever reasons that were given to explain this confusion, the complete switch off of the service was unwarranted, more so at this point in time when interoperability is attracting a high level of attention from digital finance experts across the continent.

For example, with support from Global System Mobile Association (GSMA) and Bill & Melinda Gates Foundation’s open-source platform Mojaloop, MTN and Orange in 2018 launched a joint venture to enable interoperable payments across Africa.

Code named Mowali – mobile wallet interoperability; it is open to any mobile money provider in Africa, as well as to banks, money transfer operators and other financial services providers. Such is happening across Africa and Uganda must never be left out.

Digital Impact Awards Africa which drives sensitization of technologies to better Interoperability over the last year has further spread the gospel for better technologies such as Mojaloop to ensure more reliable interoperable services. Operators in Uganda should move faster on these technologies’ adoption.

With goodwill, both MTN and Airtel can, and should ensure that Mobile Money Interoperability works because cross network transactions are critical in enhancing financial inclusion for the poor.  Bank of Uganda and Uganda Communications Communication should also take interest to see to it that this happens.

Update : On 23rd August, Airtel Uganda communicated that it had fixed the technical issue and thus Airtel Money customers could once again send and receive money from MTN Mobile Money customers. It took over 2 months for this to be fixed unfortunately. 

The writer (Innocent Kawooya) is the CEO HiPipo, also project lead – Digital Impact Awards Africa.

The writer is the CEO HiPipo, also project lead – Digital Impact Awards Africa.