East Africa has emerged at the leader in mobile payment over the years, with countries like Kenya having more than two-third of its adult population using mobile phones to transact.
With the mobile money market in sub-Saharan Africa expected to double by 2019, lack of interoperability between telecoms operators and cross-border restrictions has stood out as one of the key challenges that face the growth of the revolution.
According to a Wall Street Journal report, some of the continent’s biggest telecoms are striking deals to allow their customers to make payment across networks and country borders, something that cemented the region as a leader in mobile financial technology.
In January, East African nations of Kenya, Rwanda and Uganda, signed a One Area Network Agreement (OANA) to help improve cross-border telecommunications and expand the scope of mobile money transfers in the sub-region.
“We are now exploring how we can have the One Area Network infrastructure grow from voice to data and mobile money transfer. We want you to be able to move money from your M-Pesa account here to a relative in Kigali and vice versa or from Airtel Uganda to Safaricom in Nairobi,” Fred Matiang’i, Kenya’s Communications and Technology minister, said.
London-based Vodafone Group and South Africa’s MTN Group hatched a deal that allowed their customers in East and Central Africa to transfer money to each other. Millicom also announced it would allow its customers in Tanzania and Rwanda to send money to each other.
These telecoms are eyeing the $48 billion remittance market in Africa that the World Bank estimates is send to the continent every year.
Already Millicom allows its Tigo Pesa customers in Tanzania to access money send from abroad through WorldRemit, a fast growing online money transfer service.
Traditional money transfer avenues such as Western Union and MoneyGram have come under stiff competition in recent years from competitors that are using alternative technology such as Bitcoin transfer and mobile money remittances — increasingly becoming popular in Africa — to reach the consumers at much cheaper costs.
“This innovation means the benefits of mobile money can be extended to cross-border trade, allowing businesses and families to transfer money quickly and securely in East Africa,” Millicom’s President and CEO Hans-Holger Albrecht said at the Mobile World Congress in Barcelona.