I know some executives over at the State owned Telecoms companies will be drooling from the mouth at that thought. Just hold on, that interoperability has not come to Zimbabwe just yet, it is now a reality in Kenya though.
We know Kenya as the pioneers of this mobile money movement and Econet’s EcoCash came to be so dominant from studying the Kenyan models. Safaricom’s M-Pesa are the frontrunners and have been dominant since launch in 2007.
The other telecoms companies in Kenya launched their own mobile money solutions but M-Pesa maintains a marketshare of around 80%. That’s dominant but not EcoCash dominant, Econet’s mobile money solution has a 97% marketshare in Zimbabwe.
In an effort to promote competition in the country, Kenya’s telecoms regulator has made mobile money interoperability mandatory. In Zimbabwe, that kind of interoperability would mean users would be able to send money from an EcoCash wallet straight into OneMoney or telecash wallets or vice-versa.
What is happening in Zimbabwe is that if you send money to someone not registered with your mobile money company, they only get an SMS notifying them that they have received money but it’s not transferred into their own mobile wallet.
If you, an EcoCash subscriber, send money to a telecash user for example, they still have to find an EcoCash agent. They will need to cash out from the EcoCash agent and then cash it into their own telecash wallet or just use the cash, obviously. Most would just use the cash, why cash in so that you can be charged when you eventually spend that money?
In that scenario, although the person you sent money to is a Telecel subscriber, registered for their telecash service, Telecel have no share in the transaction. Econet get to charge the sender both the transfer and cash out fees and Telecel is mostly a spectator.
That inconvenience is also the reason why a good number of Netone and Telecel subscribers have Econet lines on the side so that they can use EcoCash. Now if it was made so that any cross-transfers would be straight into mobile wallets, well, that changes a lot for many Netone and Telecel subscribers.
You can clearly see that Econet would not be too keen on this kind of interoperability. It gives the competition a glimmer of hope. If a OneMoney subscriber received money from an EcoCash user and it went into their OneMoney wallet would they still need an EcoCash wallet on the side?
If the money goes straight into the OneMoney wallet, the subscriber can choose to keep it there, cash it out or transact with it without needing to visit an EcoCash agent to cash out first. That OneMoney subscriber might just decide they nolonger need an EcoCash account.
Interoperability will ensure that people are not limited by a closed network, they will be able to send money to anyone on any network and receive money from anyone, without going through inconveniences.
It would not be a home run for the competition though. Telecash and OneMoney, with 78,180 and 51,440 subscribers respectively, compared to EcoCash’s 3,738,056 are a bit too behind.
A good number of merchants that accept EcoCash do not accept the other two. The little tuckshop in your neighbourhood probably doesn’t accept telecash for example. Some bigger supermarkets also do not accept telecash and OneMoney. That would mean the EcoCash account will still need to be kept active.
That may be the case but Econet will probably fight with all they have to make sure interoperability does not come to Zimbabwe. There have been accusations that that is the case. If it does come, they might make sure people don’t get comfortable sending money across networks by charging steeply for that privilidge.
Sometimes you have to feel for Econet even when on the surface it seems like they are just exploiting their monopoly position. They invested millions into their service but you could counter that they probably have recouped it many times over. What you can’t do however is bet your lifesavings that Telecel and Netone will pay the inter-change fees on time and without the courts getting involved.
We will see how the interoperability works in Kenya and we can get an idea of what it will look like in Zimbabwe. We hope our own regulator POTRAZ and the Reserve Bank of Zimbabwe will be following any developments closely. Tanzania and Rwanda have already implemented mobile money interoperability and it has worked well. Kenya will be interesting because of M-Pesa’s dominance, which mirrors EcoCash’s in Zimbabwe.