Kenya: Telecommunications Companies Tasked to Set Up Shared Cash Transfer Platform


Mobile phone companies will be required to develop a common system for facilitating mobile money transfers across rival networks, a move that could cut the cost of sending money and increase the availability of the service countrywide.

A task force set up by the Prime Minister's office has recommended that mobile firms should create a seamless mobile money transfer system regulated by Central Bank of Kenya.

Mwaura Nduati, the head of the national payment system at CBK and also a member of 12-member team that formed the task force, said CBK would not force any of the mobile firm's operators to share its mobile money network agents. "What we are asking of the mobile phone operators is similar to the banks' settlement payment system," said Nduati.

A central clearing house for mobile phone payments is likely to increase usage of the service just like sharing of ATMs by banks has increased uptake of debit cards, Mwaura said.

The clamour for a common mobile money transfer system follows a request by Airtel in February to have a seamless withdrawal mobile money transfer service, but the market leader Safaricom said this was likely to kill innovation in the money transfer industry as subscribers may not receive money sent to them instantly.

Currently, recipients of money across networks receive an SMS notifying that money has been sent to them and then use the message to withdraw from an agent of the transmitting operator. The Prime Minister's office left the system formation to the operators.

"The Task Force recommends that this aspect of the industry be regulated through inter-operator co-operation just like the case of banking sector", read part of the task force report, adding; "The operators should get together to model a settlement system based on international best practices."

On Tuesday, Airtel Managing Director Rene Meza said operators should be discouraged from entering into exclusive agreements with the agents in order for this to be achieved.
"Most of the agreements drawn between the operators and agents are exclusive in nature; therefore restricting the agents from conducting business with the operators' competitors, with huge inconvenience to customers"

Airtel says that the operators need to support the inter-operability and that regulators CBK and CCK take leadership to implement this with a time-bound plan while sensitizing operators on the benefit to the economy at large.