Interoperability – a means by which mobile money transactions can be effected directly across different mobile networks – will eliminate high charges, one of the key threats to the growth of mobile money, Martison Obeng Agyei, Head of Vodafone Cash, has said.
“At first, when you send money to some other network it is captured as a token, and the charges there are quite punitive; but you can be sure that with interoperability coming into effect, the cost will actually not be punitive as it was,” Martison Agyei told the B&FT.
According to him there is a cap on the cost of transfers under interoperability, and although he could not immediately tell how much it will cost customers to make inter-network transfers, he assured that it will not be punitive because of competition among operators.
“Before, if you were transacting with another network, the amount that you paid was actually somehow punitive,” he added.
Previously, if one wanted to transfer money to another person on a different network, a one percent charge applied at the point of withdrawing the money; another one percent is charged when the money is being sent, and another one percent applied when the recipient withdraws the money, making 3 percent in total.
With the interoperability mechanism, however, the transfer will be direct – thereby eliminating one of the charges as explained above.
The new system is also expected to eliminate unofficial charges by some merchants, as well as the stress and cost of moving to another agent’s location to effect a transfer to a different network.
Explaining the interoperability system launched by Vice President Dr. Mahamudu Bawumia yesterday, Mr. Obeng-Agyei said: “When you transact between your network and another network, it goes through the GhIPSS network and then directly into the recipient’s wallet, unlike previously when a token had to be sent and if the customer didn’t cash it out within a certain period it expired and went back to the sender”.
He said the system will also help enhance trading activities, especially e-commerce, particularly for companies which are into delivery services; and promote efforts to make Ghana’s economy a cash-lite one.
“Mobile financial services have come to transform the way we do business in this country, and I think interoperability is the next step to enhance business activities – especially among small businesses,” he noted.
Reacting to concerns that mobile money operators will rival banks in the near-future, Mr. Obeng-Agyei opined that it will rather complement what banks do, since the funds from mobile money sits with the banks.
To him, the over-GH¢52billion worth of total mobile money transactions recorded in the first quarter of this year came through the banks, which he said goes to defeat the notion that mobile money operators are in competition with banks.
The interoperability system allows transfers of money between different mobile money networks and is under supervision of the Bank of Ghana and its dedicated electronic money facilitation subsidiary, the Ghana Interbank Payments and Settlements System (GhIPSS).