Mobile financial services trials kicks off, setting stage for lower cross networks transactions costs.
Cabinet Secretary Ministry of ICT Mr. Joe Mucheru addressing the press during the media briefing at the Ministry of ICT headquarters. With him is Cabinet Secretary Treasury Mr. Henry Rotich (right) Principal Secretary Broadcasting and Telecommunication Mr. Sammy Itemere (2nd left) and CA Ag. Director General Mr. Christopher Kemei.
The cost of sending money across networks is set to come down following announcement of a pioneering agreement between the Mobile Network Operators to send money to each other whether using Mpesa , Airtel Money or Telkom money on their handsets.
Under the agreement the three mobile network operators will have a seamless interaction of the mobile money services -technically referred as interoperability- that is expected to deepen Kenya’s financial sector.
The pilot, which begins next week between Safaricom and Airtel, follows a similar agreement by mobile network operators, Airtel, Tigo and Zantel of Tanzania in June, 2014. Kenya has envisaged to have seamless cross boarder money transfer services after successfully implementing the interoperability locally.
Telkom Kenya is expected to sign an agreement with the two leading operators by mid February.
Joe Mucheru, Cabinet Secretary Ministry of Information Communications and Technology said the agreement will also foster competition in the sector.
“During the trial period, the operators wont levy each other the termination rates, however after the trials they will have to agree on the rates and the amount they will charge consumers,” Mr. Mucheru during the media briefing.
“We expect this to bring in competition and lower the costs or transacting across the networks,” Mr. Mucheru added.
The briefing was attended by Christopher Kemei, acting Director General, Communications Authority of Kenya, Henry Rotich Cabinet Secretary Treasury , Sammy Itemere, Principal Secretary Telecommunications and Broadcasting. Also present were representatives from the three mobile operators.
Although it has been possible to send money through various mobile networks, interoperability will now allow their customers to send and receive money across networks and the e-money goes directly to the respective subscriber’s e-wallet account.
Beyond that, interoperability in Kenya will allow consumers the ability to access different services in case of technical hitches.
Mobile financial services sector has experienced phenomenal growth since its inception in 2007. This sector is served by over 184,537 agents and in the three months to September 2017 had 28.1 million subscribers.
During the period a total of 537.2 million transactions (sending and withdrawals) were made which was valued at Kshs.1.65 trillion. Mobile commerce transactions which include Customer-to-Business (C2B), Business-to-Customer (B2C) and Business- to-Business (B2B) stood at 352.4 million and were valued at Kshs.714.3 billion. Additionally, Person- to-Person (P2P) transfers amounted to Kshs. 544.1 billion.