Here’s a breakdown of mobile money interoperability in Kenya, its development, benefits, and current status:
What is mobile money interoperability?
Mobile money interoperability refers to the ability of different mobile money services to work together so that customers can transfer funds between accounts across different mobile money platforms or between mobile money accounts and bank accounts.
Mobile money interoperability allows seamless transactions between different mobile money services in Kenya. This means customers can send money, pay for goods, and access services regardless of whether they use M-Pesa (Safaricom), Airtel Money, or T-Kash (Telkom).
This interconnection aims to create value for the users by facilitating seamless financial transactions, regardless of the mobile money service or financial institution involved.
Development of Interoperability in Kenya
Mobile money interoperability in Kenya has evolved in phases:
- 2018: Person-to-Person (P2P) interoperability was introduced, allowing customers to send money directly to each other across different networks.
- April 2022: Merchant interoperability (till numbers) was launched. This lets customers make payments to M-PESA Lipa Na M-PESA Buy Goods till numbers from other networks.
- July 2023: Full interoperability was achieved. Customers can now make payments to Paybills across all three major networks.
Benefits of mobile money interoperability
- Increased Convenience: Customers no longer need to concern themselves with whether a merchant, business, or individual they want to transact with is on the same network as them.
- Enhanced competition: Interoperability fosters competition between mobile money providers, potentially leading to lower transaction fees and better service offerings.
- Financial inclusion: Promotes financial inclusion by making it easier for people to participate in the digital economy regardless of their mobile network preference.
- Boosted economic activity: Simpler, more accessible payments across the board stimulate business growth and economic activity nationwide.
Current status
Kenya currently has full mobile money interoperability in place. This covers:
- Person-to-Person (P2P) transfers
- Lipa Na M-Pesa Buy Goods Till Number payments
- Paybill payments
Key points to note
- Interoperability was driven forward by collaboration between the major mobile money providers and regulatory support from the Central Bank of Kenya (CBK).
- Kenya has become a leader in financial innovation, serving as a model for other countries seeking to implement mobile money interoperability.