Madagascar has become the second African market after Tanzania with mobile money interoperability. The country's three mobile money providers - Airtel Money, mVola and Orange Money - will now allow transactions to flow easily across networks.
In a statement announcing the move, GSMA's chief regulatory officer John Giusti said that the move had a particular significance in developing markets, where 1 billion people have no formal bank account, but they do have access to a mobile phone.
“In Madagascar and Tanzania, there are more mobile money accounts than bank accounts", the statement added. "Traditional banking infrastructure tends to be out of reach for poorer communities; therefore, interoperable money services will deliver significant long-term benefits to citizens, extending the range of digital financial services provided and ultimately serving as a safer and more reliable replacement for cash as a means of payment in day-to-day transactions.”
“The launch of interoperable mobile money services across all networks in both Madagascar and Tanzania underscores the mobile industry’s commitment to delivering life-enhancing financial services to consumers. Greater financial inclusion will empower the underserved and drive economic growth across the country,” Giusti said in conclusion.
According to the GSMA, which represents the interests of mobile operators worldwide, offering customers access to mobile money leverages the widespread use of the mobile phone, as well as the extensive coverage of mobile networks to enable customers to have a safer, more secure and convenient way to access financial services.
Tanzania and Madagascar have a much more level playing field when it comes to mobile money compared to Kenya which saw US$23 billion transacted last year through mobile money, 95.5% of which was through M-Pesa. Mobile money is a key revenue earner for Safaricom, bringing in US$190 million in revenue, and interoperability is likely to challenge the operator's dominance. As a result, we are unlikely to see similar moves in Kenya, though Airtel Money transfers to M-Pesa are free.
Perhaps the next step after making operators interoperable within countries would be enabling inter-country transfers. At the moment, sending money from one African country to another can be downright impossible due in part to restrictive policies. Operators such as MTN and Airtel which have subsidiaries all over the continent could bridge this gap.