Vodacom and MTN have teamed up in East Africa to deliver an interconnected mobile payment system that promises to jump-start the mobile banking revolution sweeping through the African continent.
The two mobile phone network operators have reached an agreement which will allow their customers in East Africa to transfer money across the two networks in a movement termed interoperability. Vodacom operates the the M-Pesa product while MTN runs with the MTN Mobile Money.
This is a big deal in a continent that is largely relies on mobile payment systems to do basic banking. Being able to transfer money across networks and states will make life much more easy.
Interoperability is picking up momentum in the East African region. There was a remarkable development in Tanzania last year where the country’s mobile phone network operators, Tigo, Airteal and Zantel, achieved financial “interoperability”. With the help of the Bank of Tanzania and the Bill and Melinda Gates Foundation, Tigo’s Pesa, Airtel Money and Zantel’s EzyPesa launched an initiative in June last year which allowed customers to transfer monies across the three networks.
Cross country transfers became the next target. Orange has launched a cross country money transfer platform in East Africa.
Vodacom and MTN are joining this movement. A joint statement said this interconnect collaboration between the region’s two biggest mobile money operators will enable convenient and affordable international remittances between M-Pesa customers in Kenya, Tanzania, Democratic Republic of Congo and Mozambique, and MTN Mobile Money customers in Uganda, Rwanda and Zambia.
Under the terms of their Memorandum of Understanding, MTN Group and Vodafone Group will also share best practice and work together to define the rules and standards of mobile-based remittances in Africa.
Vodafone Director of Mobile Money Michael Joseph said “Our agreement with MTN to connect our mobile money wallets in East Africa is a fantastic example of co-operation and interoperability between competing mobile operators. By working together, we will deliver cheaper, faster money transfers, improving the lives of many people living in the seven countries involved.”
MTN Group Head of Mobile Financial Services, Serigne Dioum said “After successful launches in Ivory Coast and Benin in West Africa, we are looking enthusiastically at the collaboration with Vodafone in East Africa. Together, we aim to build a scalable model that will accelerate remittance roll-out across the continent.”