AfricaCom: Tanzania has led the way with
interoperability. What role have IFC played in facilitating this process ?
Charles Niehaus: IFC has been the neutral broker for the industry on mobile money
interoperability. This involved initial engagement with the operators to gauge
interest, liaising with the Central Bank of Tanzania to facilitate an industry
led process, initiating a market demand study to asses interest from consumers
and agents, all leading up to facilitated workshops which unpacked the details
around exactly what interoperability means and how it could work.
A: Interoperability was once perceived as
a technical challenge but in Tanzania it would appear that creating a set of
regulations has been the main facilitator – who has been involved in the
process?
CN: Technology enables
interoperability to happen, but without a set of overarching rules operators
have little legal certainty on how the business or interoperability will work.
The process in Tanzania covered facilitated workshops which unpacked firstly
which use cases to start with, and once these were agreed each use case was
broken down into the traditional components that scheme rules or ACH rules cover.
These included the participation criteria, business models, clearing and
settlement arrangements, disputes, and risk and loss allocation. The outcome
was a set of rules for each use case which all participants who decide to join
the interoperability scheme adhere to. It is important to note that the
operating rules and payment regulations are not the same thing and often get
confused. Payment Regulations are set at a market level for all participants in
the national payments environment, while operating rules for a particular
payment scheme have to adhere to the national payment regulations but are only
enforceable between the participants.
A: Have all of the operators in Tanzania bought
in to these set of regulations ?
CN: The rules (not
regulation) for Person to Person transfers have been signed and implemented by
Airtel, Tigo and Zantel. Vodacom is in the process of joining but has not
signed to date (Sep 2015).
A: What role did the Bank of Tanzania play in
facilitating the development of interoperability in Tanzania ?
CN: The regulations in
Tanzania created an enabling environment for industry participants to create a
set of practical and applicable rules. BoT endorsed the process. It is
important to note that BoT did not mandate the process or implementation as
other central banks have done.
A: How does interoperability facilitate
financial inclusion ?
CN: Interoperability
is a means to an end and not and end in itself. Whilst mobile money
interoperability is still in its infancy, parallel industries have shown that
interoperability increases uptake and transaction volume. From a financial
inclusion perspective this would mean more access points and transactional
availability for individuals as well as adding to the journey of cash
digitisation.
A: Is Tanzania now enjoying the mobile money
boom that Kenya had and which other African countries do you think might be
able to embrace interoperability in the future ?
CN: Many African
markets have tried to replicate the Kenyan example with varying levels
of success. The recently published World Bank Group Findex 2014 data show a
very positive development in Tanzania with regards to financial inclusion, with
40 percent of the population now with access to a formal bank account compared
to 17 percent in 2011. In some regards, Tanzania’s journey has been even faster
than that of Kenya and Tanzania was the first industry-led and decided
interoperability implementation in Africa (the others were primarily regulatory
mandated or vendor driven). It may still be premature to agree what the exact
correct approach to interoperability will be, but to date Tanzania is showing
promising signs and is a step towards even greater progress.
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