MM Operators Race to Interoperability Deadline

Mobile money service providers in the country are making last-ditch effort to connect to the National Central Switch (NCS) in compliance with the directive of the Central Bank of Nigeria (CBN), Nigeria CommunicationsWeek has learnt.

Connecting to the NCS means that operations of mobile money service providers are interoperable.

It is basically the ability of the user of one mobile money service to send money directly to the wallet of a user on any other service.

Without interoperability the difficult decision of which mobile money service to choose might be influenced by which members of the customer’s peer group are already using a given service.

People familiar with the workings of mobile money touted as the game changer expect 80 per cent compliance rate by the end of February 28 deadline.

They said that interoperability among operators is responsible for the slow growth of mobile money in the country.

With just days left to the deadline given to mobile money operators to connect to National Central Switch (NCS), revealed that most of the operators in the sector have integrated their system with that of NCS.

Further investigations showed that Nigeria Inter-Bank Settlement System (NIBSS) operators of NCS is testing integrated mobile money operators’ system to ensure that the meet its specification.

Emmanuel Okoegwale, principal associate, MobileMoneyAfrica, said there are different levels to achieve inter operability. It could be platform, agency or even via other channels like merchants.

“Essentially interoperability enables the acceptance of e-money seamlessly across providers, agency network and event merchants. Interoperability for agent revolves around agents ability to meet the needs of subscribers across multiple providers for cash out and cash in service, same way ATMs don’t discriminate between cards of firms that had entered into interoperability agreements at National or even at international level. It significantly reduces the cost for ecosystem players across agency network,” he said.

He added that when interoperability is achieved in the system a subscriber of scheme provider A, can send mobile money from his wallet to subscriber that is enrolled in scheme provider B and the funds in the wallet can be spent directly at a merchant location or cash out at own agent locations.

It would be recalled that Central Bank of Nigeria (CBN) directed the 16 Mobile Money Operators (MMOs) in the country to fully connect to the National Central Switch (NCS) before Feb. 28.

The CBN gave the directive in a circular entitled “Timeline for Interoperability and Interconnectivity”. The circular was signed by Mr. Dipo Fatokun, CBN’s director of banking and payment system.

The circular stated that full connection to NCS would enhance MMOs’ “inter-operability and interconnectivity“.

It added that “for avoidance of doubt, appropriate sanction will be imposed on any mobile payment operator that fails to comply with the circular“.

The CBN issued licences to 16 companies to operator mobile money transactions.
The CBN had said that the MMOs were licensed to accelerate the transformation of the nation’s payment system which would emphasis use of mobile phones.

At the third Mobile Money Expo in Lagos, financial experts wax worriedly because of interoperability challenges.

Mr. Chalapathi Rao Immidi, director and head, Global Business Development, Mfino, said interoperability was needed for providers to share their infrastructure networks, thereby enabling multiple allowances, without which the economy would not grow.

“Imagine all of us not being able to talk to people not on our mobile network, because they are on other networks,” he said.

Rao Immidi said providers would have to operate in unison to make the adoption of mobile money easier.

“This will enable many factors and many people and organizations and banks will be encouraged to participate and there will be more range of products to offer customers,” he said.

According to him, mobile money has a lot to offer apart from the basic sending and receiving of money, as it can be used for government disbursement, salary payment, settling of daily paid workers and more.

He said, “A synergy in operation would offer greater value to customers. Countries that connect though bridges are the one that had their economy grow.

“Once there is connectivity, communication and a common source, there would be a pool of customer expansion, agents will find it easier to run operation, while reducing cost, and there will be general access expansion.”

Nodding agreement, Mr. Lanre Osibona, financial expert, said for interoperability to be achieved, it would have to cut across provider platforms, agents and customers, such that providers could send money to other provider platforms seamlessly.

According to him, agents can serve customers from any provider without having multiple platforms to perform their service; and customers can access any provider irrespective of the SIM card, network or handset they possess.

“The question is, are we mature enough for this? Is the market mature enough for this?”  Osibona asked.

According to him, Nigeria has not exactly done that badly, as Paga, one of the leading providers of mobile money in the country, is ahead of MPesa, of Kenya, if statistics they have presented is to be followed.

Osibona said, “Technology must be open for developers to meet our local challenges. Culturally, we are so into cash and that is a challenge in itself. There needs to be a drive. We need to transform and change the orientation of people.

“You have to make people want to use it. We are doing okay, but we need to do more.”

There are over 20 licensed mobile money operators in Nigeria.

“We need to start thinking of unique ways to address the issue. We are in it and we need to make it work,” Osibona added.