Telecom operators in the country are unhappy about moves by the central bank to impose on them a third-party company which will intermediate in mobile money transactions across different networks.
The BoG is said to have contracted a private company to act as the switch for across-network mobile money transactions, with additional cost implications for both consumers and the telcos.
The evolution of mobile money in the country has seen the industry grow into a multibillion-cedi one, with operators now beginning to engineer innovations that will gradually usher in full-scale interoperability.
But before the telcos could fully roll-out interoperability – that is mobile money from one network to the other – the Bank of Ghana, which regulates the mobile money operations of the telcos, announced that it had secured the services of a private switch that will handle the interoperability.
According to a letter written by the Ghana Chamber of Telecommunications to the central bank, sighted by the B&FT, “the current pricing model being proposed, especially with respect to the revenue share, is not in alignment with international standards or benchmarks.
Not only are the fees being charged by the switch too high but it also has the potential to undermine the success of the project because operators are likely to make losses on interoperable transactions.”
The letter, dated January 9, 2017, apparently follows a meeting between the central bank, mobile money operators and the banks, regarding the implementation of the switch.
Apart from raising issues about the cost of the project, the Chamber said the central bank’s project did not have clearly defined scope regarding exactly what the switch would do.
“It was evident from the meeting that the project scope was still not clear even though stakeholders are being pushed towards implementation. Our understanding from the start was that the project was to facilitate interoperability of payment systems in Ghana, including Banks and GHIPSS, but the current engagements have been restricted to electronic money issuers (EMIS) [mobile money operators] only without clear understanding of when and how the others, especially the banks, will participate.
We are reliably informed that the banks, for instance, have still not committed to the project, raising a lot of doubts about their participation,” the letter, signed by the CEO of the chamber, Kwaku Sakyi-Addo, said, demanding an urgent meeting with the central bank.
According to data from the central bank, from January to September last year, there were more than 368 million individual mobile money transactions, which amounted to over GH¢51.4 billion in value – a more than 115 percent year-on-year increase.
Industry watchers believe that despite its exponential growth over the years, the next frontier of mobile money is interoperability. According to GSMA, a globally acclaimed thought leader in telecommunications policies, interoperability must not be mandated, as the central bank is seeking to do.
Rather, GSMA said, “the role of the policymaker is to facilitate dialogue between providers, ensuring that interoperability brings value to the customer, makes commercial sense, is set up at the right time, and regulatory risks are identified and mitigated. Interoperability should not be mandated.”
As per international standards, the telecom operators in the country have already introduced cross-network mobile money transactions, with industry players arguing that they are in a position to implement interoperability on their own and do not need a costly third party that will add on to cost of transactions.
Other emerging issues
The Telecoms Chamber’s letter also suggests that the switch, apart from its primary goal, will be rendering other services such as monitoring of mobile money transactions conducted within same networks (on-net).
“This has come as a big surprise to EMIs since it [on-net transactions monitoring] does not form part of interoperability. This, in our view, is out of scope and will rather introduce additional cost from the switch provider which will unnecessarily increase the cost of the service to the customer without adding any value,” the CEO of the Chamber said in the letter.
The biggest risk to the industry, Mr Sakyi-Addo said, is that: “the switch becomes a Single point of Failure (SPOF), meaning that if the switch goes down, the whole industry is shut out. This poses a huge risk to the industry.”
The telcos believe that monitoring of on-net transactions can still be achieved by providing view access to Bank of Ghana (Payment Systems), to access relevant data or reports from the platform backed by the monthly submissions already being provided by mobile money operators to the bank.