In the latest Executive Insight video supported by Mahindra Comviva, MEF talks to Christian de Faria, Executive Chairman of AIRTEL Africa, about interoperability, and the future of mobile money.
In 2016, it became possible for any mobile money user In Tanzania to send money to any other user, regardless of operator. So, in other words, and Airtel Money customer could transact instantly on mobile with a customer of Vodacom, Tigo or Zantel.
This is no small achievement – the first in which all telcos are covered by one scheme.
The operators had to put aside their competitive instincts and agree certain technical criteria to make this happen. But the long term benefits should be considerable. Mobile money makes it easier to do business, and that is good for users, operators and the country as a whole.
Christian De Faria, executive chairman of Airtel Africa, is proud of his company’s participation. He spoke to the MEF as part of its Executive Insights series and says interoperability is key for the future of mobile money.
He says: “In countries where you have many operators, you must have interoperability, so you can can send your money to a competitor’s wallet…and mobile money becomes a way of life. This is important for us, not just for our own revenue, but for the way it can increase the circulation of money around the country and boost economic activity.”
“We don’t see our financial services as competitive to the banks… We will go where the bank can’t – or won’t – because of profitability issues. We are serving the unbanked in areas where banks won’t even open a branch. So this is really about inclusion.”
In fact, Airtel has been a major driver of mobile money in Africa since 2012. Its Airtel Money service lets users:
- Send and receive money across networks
- Top up and send airtime
- Make payments for utility bills, goods and services
- Link to a bank account
- Make card-free withdrawals from ATMs
As with all such schemes, most users can pay in (and withdraw) cash from a network of agents.
Airtel Money is now available across 16 countries in Africa (Burkina Faso, Chad Congo B, DRC, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Rwanda, Seychelles, Sierra Leone, Tanzania, Uganda, Zambia). And when users travel between any of these countries, they can use Airtel Money as if at home. As of early 2016, it had nine million customers.
In the past, some observers have painted the growth of mobile money is Africa as a story of ‘operators versus banks’.De Faria doesn’t see it this way. This much is implicit in the product description above, which shows that Airtel Money includes the option to link to a traditional bank account.
However, De Faria does argue that telcos can bring financial services to previously excluded groups, whose income is too small and whose homes are too remote to interest large banks.
“We don’t see our financial services as competitive to the banks,” he says. “We will go where the bank can’t – or won’t – because of profitability issues. We are serving the unbanked in areas where banks won’t even open a branch. So this is really about inclusion.
“We have developed a network of dealers to cash in and out, and merchants where you can pay with the wallet, so we’ve seen tremendous progress.”
In fact, Airtel’s ambitions for Airtel Money go beyond making it easier for users to settle small debts or pay bills from a USSD menu. The company is actively building savings products for example – another area in which the small sums saved by previously unbanked users would have been uninteresting to traditional banks.
A good example comes from the Seychelles. Here, members of the Seychelles Pension Fund can now pay their pension contributions from the Airtel wallet.
Another similar deal is the one with United Bank of Africa (UBA Bank) in Kenya. This lets Kenyan subscribers open and operate a savings account which earns up to seven per cent a year, entirely from their Airtel Wallet. Contributions start from as low as five shillings.
Similarly, Airtel has worked hard to ease international mobile transfers. The operator says Airtel Money is the only mobile money service that lets subscribers transfer money across Rwanda, Zambia and DRC from and to its mobile wallet. It’s also combined with third parties on making transfers easier. Last summer, Airtel Rwanda signed a partnership with Western Union the means Airtel Money subscribers can receive money through the service at no cost. They can withdraw money sent by Western Union via an Airtel agent or ATM machine, rather than queue (and pay) at a Western Union outlet.
De Faria says: “It’s really important for central banks to support international transfer. Yes, there is a risk of money laundering and so on but we are addressing that. We’ve seen a lot of progress with this kind of integration especially in East Africa.”
Savings and international transfer will undoubtedly accelerate the spread of mobile money in Africa. But the core functionality will always be paying friends, family and businesses. With this in mind, De Faria says Airtel is making good progress on merchant integration. And the telco has even experimented with advanced services such as contactless in-store payments.
In 2016, it joined forces with Mahindra Comviva to build ‘Tap Tap’ NFC payments in Tanzania. The scheme links Airtel Money accounts to a special NFC card. Users tap the card on a reader (supplied by Airtel) to merchants and then tap in a PIN to complete the purchase.
Tap Tap reduces the reliance on cash among merchants and users (it’s safer, faster and reduces the need to find/provide change). And the cards provide a transaction history, which lenders are now using as a guide for providing micro-loans. It’s further evidence of a desire to make mobile money a driver of economic prosperity across Africa. De Faria says: “We want people to use wallet in many places as possible – for buying bread and so on… and as we go along we want to work with more enterprises to transfer salaries, so mobile money becomes a way of life.”