Recently, Statutory Instrument 80 (SI80) was effected into law and among the big talking points is the fact that all mobile money operators will be mandated to connect to a national payment switch;
It shall be mandatory for every money transmission provider and mobile banking provider shall be connected to a national payment switch, as shall be directed by written notice by the Reserve Bank from time to time that enables interoperability of payments systems and services.S.I 80 of 2020 – Banking (Money Transmission, Mobile Banking and Mobile Money
The most talked-about feature of the national switch is interoperability. You’ll finally be able to send mobile money between EcoCash and OneMoney or Telecash without need for an agent. It’s important to note that this functionality is NOT yet available at the time of writing.
For a long time, EcoCash has resisted interoperability with Zimswitch and has functioned in a vacuum but because of a superior merchant network and the larger user base, they have been able to do so without consequence.
Now that interoperability is a must what are some of the outcomes we can expect?
EcoCash’s omnipresence finally threatened?
The ubiquity of EcoCash has always meant that when the time to choose a mobile-money operator came 9/10 people would choose EcoCash. Why? All your family and friends used EcoCash, every shop accepted EcoCash and so did every vendor which left consumers with very little choice.
Interoperability brings choice back into the equation. If it doesn’t matter which mobile money service your friend is using and shops/vendors can accept all services your choice of service is now determined by other factors. Price-conscious users might turn to the cheapest service provider whilst those less conscious of pricing might opt for the outright most seamless service providers.
Moral of the story is Telecash and OneMoney will have a chance to compete on service delivery and that’s something they’ve never had before. Whether that will actually result in a shift or not is another thing altogether.
Once upon a time in Kenya
In April 2018, Kenyan regulators made mobile money interoperability mandatory. In Q1 of that year, Safaricom’s M-PESA had a market share of 71.9% and the following quarter it dropped 69.1%.
By October of 2019, Airtel had clawed at M-PESA’s market share and it was down to 63.5% whilst Airtel the closest competitor grew from 21% to 24.6%. Not a huge difference but when you consider that Kenya has over 31 million subscribers, the significance of that movement becomes more apparent.
Will something similar happen in Zim? I don’t know. People have always clamoured for alternatives to EcoCash citing high charges but when the alternative presents itself we don’t know what it will look like or whether there’s actual appetite to switch over.
Kwese was one such project. Everyone wanted an alternative to DStv and one presented itself and failed miserably on two fronts – the content wasn’t good enough and the business model wasn’t sustainable.
Maybe being the alternative to EcoCash will come with the same issues, maybe not. Time will tell.
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