Africa Makes Leap in Cross-Border Mobile Payments
New partnerships aimed at getting a bigger slice of the $48 billion Africans sent and received last year
JOHANNESBURG—Africa’s biggest telecommunications companies are striking deals allowing their customers to make payments across networks and borders, the latest stride in the continent’s ascent as a leader in mobile financial technology.
Starting this month, London-based Vodafone Group PLC and South Africa’s MTN Group Ltd. plan to allow customers in East and Central Africa to send each other money, the first time Africa’s biggest telecoms have cooperated in the competitive mobile payment space.
本月开始，总部在伦敦的沃达丰集团（Vodafone Group PLC）和南非的MTN集团计划实现东非和中非用户之间的收付款。这也是电信巨头在竞争激烈的移动支付领域的首次合作。
Their new partnership could spur even more economic growth in these fast-growing markets, and drum up revenue for mobile companies in countries where demand for new cellphones and airtime has matured. Fierce competition is one reason MTN lost revenue per user in 19 of its 22 markets in the first quarter, MTN said.
“Finally, [telecoms] woke up and smelled the coffee,” said Hans Kuipers, a Johannesburg-based partner at the Boston Consulting Group. “In order to really develop a healthy ecosystem, you have to develop interconnectivity.”
“移动通信公司终于认清现实了。为了建立一个健康的生态系统，不同公司之间必须发展‘互联性’”Hans Kuipers说。他是波士顿咨询公司（Boston Consulting Group）驻约翰内斯堡的合伙人。
The telecoms also hope that their partnership will give them a bigger slice of the $48 billion the World Bank estimates that Africans sent and received as remittances during 2014.
Until now, mobile companies have resisted “interoperable” partnerships as they raced to build their own market share. The most successful mobile-money service is the M-Pesa system started by Vodafone’s Kenyan subsidiary Safaricom Ltd. in 2007.
Today Safaricom’s 14 million M-Pesa customers pay for everything from safari lodge stays to taxi rides via the platform.
Now some of that cash could flow to MTN, via the new partnership that will allow payments between Vodafone subscribers in Kenya, the Democratic Republic of the Congo and Tanzania and MTN users in Uganda, Rwanda, South Sudan and Zambia.
One hurdle has been getting central bank approval in each market to send and receive money from abroad, said SerigneDioum, MTN’s head of mobile financial services. As of May, MTN had approval to receive money in Uganda, as well as to send and receive money in Rwanda. Vodafone declined to comment.
‘Finally, [telecoms] woke up and smelled the coffee.’
—Hans Kuipers, a Johannesburg-based partner at the Boston Consulting Group
—— Hans Kuipers，波士顿咨询公司驻约翰内斯堡合伙人
Mr. Dioum said MTN and Vodafone sought to pair countries where MTN was stronger with countries where Vodafone’s subsidiaries dominate, creating broader regional reach for both companies. East Africa, he said, “is where our mobile money offers have more penetration and it is where mobile money is working well.”
MTN and Vodafone wouldn’t say how they will split profits from the network-to-network, cross-border payments.
Mr. Dioum said the partnership will cut fees for cross-border transfers from up to 20% of a transaction’s value to 3% or less, something MTN achieved in a pilot partnership launched with Airtel Burkina Faso last year between Burkina Faso and neighboring Ivory Coast.
The World Bank says reducing such fees by just five percentage points would save Africans $16 billion a year. That’s money customers might channel toward more mobile purchases, operators say.
“We want people to use their [mobile] wallet to perform every single transaction, including international money transfers,” Mr. Dioum said. Last year, Ugandans sent $72 million in remittances to Kenya, according to data from the World Bank. Kenyans sent Ugandans $51 million.
Vodafone said it already has seen the benefits of interoperability following a February deal for its 7 million M-Pesa customers in Tanzania to transact with the 4 million Tanzanian customers of rival Tigo, a subsidiary of Millicom International Cellular SA.
“The more people playing in the ecosystem, the better it is for everyone,” said Greg Reeve, Millicom’s head of mobile financial services. With the signing of that deal, which followed a different agreement between Tigo and two other Tanzanian carriers last year, Tanzania has become the most interoperable market in Africa.
Mortimer Hope, director of spectrum and public policy in Africa for the Global System for Mobile Communications Association, said, “In Tanzania, usage of mobile money was fairly good, but once there was interoperability, there was a steep increase in usage.”
The association, which represents the interests of mobile operators world-wide, said many of its most innovative members are working in Africa, and that mobile-payment methods they pioneer may end up deployed from the U.S. to Japan.
African operators say they are only starting to tap their homegrown potential.
“We don’t really know how big it is,” said Michael Joseph, director of mobile money at Vodafone and former chief executive at Safaricom. “This is what we’re starting to capture.”