A Strategy for Mobile Money in Zimbabwe

Interoperability is one of the most prominent future strategies for

mobile moneyThe lack of interoperability between devices and systems

in the mobile money ecosystem is a crucial issue that affects efficiency and quality of service available to

customers.

Interoperability in Zimbabwe

At the Network Inter-connection level:Interconnection is mandated among all licensed public telecommunication service providers, with cross-network mobile money transactions possible among the three MNOs.

Agent level inter-operability:

a. Cash merchant serves account holders of the FSP it represents and provides cash out services to non account holders.b. Cash merchant providing CICO services to account holders of the FSP it represents and account holders of other FSPsc. Cash merchant representing multiple service providers and services the account holders of all, but does it through

multiple agent accounts.

Platform-level Interoperability: Platforms can interconnect: directly or indirectly where a third-party entity which is either owned by providers, owned independently, or owned by the government interconnects platforms.

Interoperable payments platform:

1. RTGS2. ZIMSWITCH offers Shared Services across over 400 Zimswitch enabled ATMs and 5,000 POS terminals through an online payments gateway which is able to accept or process debit card based transactions online.3. ZIMSWITCH Instant Payment Interchange Technology (ZIPIT) enables customers to send funds instantly to any other ZIPIT ready financial institution. Sending money from my CBZ account to my father’s Barclays account. This enables recipients to store received funds, on-send them or use them to make payments. ZIPIT also enables a person to transfer funds from the bank to the mobile wallet4. ZimSwitch Mobile is a shared mobile banking platform and USSD Gateway connecting member financial institutions to all three MNO’s in Zimbabwe, namely Telecel, NetOne and Econet. The platform offers full USSD connectivity for banking related services as well as SMS and Direct Airtime purchases and transfers. Any mobile registered user on any network is able to enjoy real convenience of sending money through ZimSwitch Instant Payment Interchange Technology (ZIPIT).

The Reality in Zimbabwe

Inter-operability

Level Nature of Interoperability

Clearing and settlement

Account to account transfers

POS payments

CI/CO at Agent

ATM Withdrawals

MNO to MNO wallet

1 Theoretical(core electronic banking system).

yes yes yes yes yes yes

2 Technical(Standardized interfaces in place)

yes yes yes yes yes no

3 FunctionalSystems are able to connect based on agreed standards)

yes Yes yes yes yes no

4 Interconnected(Agreements are in place defining fees, rules and risks of the exchange.)

yes yes yes yes yes yes

5 Effectively interconnected Systems. (No affordability issues or technical glitches)

Not sure Not sure Not sure Not sure (off-net transfers are usually more expensive than on-net transfers)

Not sure NO

(Transfers)

Assessing Levels of Inter-operability

Level Nature of Interoperability

Bank to bank

E-wallet to e- wallet

Wallet to bank

Bank to wallet

1 Theoretical yes yes yes yes2 Technical yes No yes yes3 Functional yes No Not sure yes4 Interconnected yes yes yes yes5 Effectively

interconnected Not sure No yes yes

Inter-operability levels are largely driven by consumers and market players who provide

mobile money services.And yet, Mobile money service providers with significant market power in the provision of mobile financial services market having no real incentive to interoperate.

Conclusion

It is necessary to achieve inter-operability of mobile money platforms i.e. as is the case with inter-operable ATM networks. Currently, registered users at participating MFS providers are not able to receive and send money directly to one another’s wallets.

The Desirable Future

1. We would like to witness a situation where funds can be transferred from one mobile account to the mobile account of another service provider. 2. A mobile financial Service Provider allowing customers of another Mobile financial service provider to open an account on either’s SIM card.3. Agents providing service to multiple account holders across multiple networks through a single agent account