Telkom CEO Mugo Kibati. FILE PHOTO | NMG
Telkom Kenya is pushing for implementation of agent and merchant
interoperability to ease the process of cross-network transfers.
This
year, telcos in Kenya implemented technical interoperability — where
users are able to send and receive money directly from or into their
accounts across the different networks, seen as the first step in
levelling the playing field.
“Technical
interoperability is just 10 per cent of what needs to be done to ease
the process of cross network transfers. There is need for agent and
merchant interoperability,” said Telkom Kenya Chief Executive Mugo
Kibati in an interview with the Sunday Nation.
If
implemented, agent and merchant interoperability would mean that
customers for example, on T-Kash will be able to withdraw funds from
Safaricom’s M-Pesa or Airtel Money agents and vice versa.
“We
need to get to a threshold where agents make money from the float. If
this is not doable, then the agents will not allocate float to other
players beyond the dominant player,” said Mr Kibati.
Similarly,
he stated that the merchant system should be integrated as is the case
of the banking system. Despite having a smaller customer base in terms
of card usage, customers are able to swipe their cards at pay points
regardless of the bank running the merchant’s card reader (PDQ machine).
The
integration of wallets, merchants and agents is seen as a first step to
evening the playing field that currently has Safaricom dominating the
telephone, mobile money and mobile Internet subscriptions in the
country.
According to Mr Kibati, the market dominance
by a single operator in the telecommunications industry should be broken
as recommended by advisory firm Analysys Mason to foster innovation in
the industry.
“There is need to implement the dominance report. Customers
suffer when the dominant player is so deeply entrenched,” said Mr
Kibati.
The government pushed for the seamless
cross-network transfers to help level the market and reduce Safaricom’s
dominance, ICT Cabinet Secretary Joe Mucheru said when the service was
launched.
This however has not been the case as data
from the Communication Authority showed that the introduction of
cross-network money transfers via mobile phones in April has failed to
cut M-Pesa’s dominance.
The reduced cost and ease of
receiving cash across networks has not eased M-Pesa’s grip of the money
transfer market, which moved Sh2.03 trillion in the three months to
September.
The Treasury in 2016 identified
technological disaster in the M-Pesa-dominated mobile money sector as a
potential fiscal risk for Kenya, saying a blackout on the platform could
cost the government “substantial” losses in corporate tax revenue.
The
worst case scenario has played out month after Safaricom was hit by an
outage estimated to have cost the economy billions of shillings.
A
similar outage hit the provider in July and April 2017 cutting off
communication for users on the network, pilling pressure on the industry
regulator to get a solution.
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