NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, February 23, 2018

Zimbabwe could become one of Africa’s early adopters of full interoperability in the mobile money sector if the government is to have its way.

President Emmerson Mnangagwa’s new administration is switching its focus to digital payment alternatives as the cash and liquidity shortages that have bedeviled the country for the last few years continue. The economy had been in tailspin for the last few years of former president Robert Mugabe, who was forced out in November.

The idea of interoperability in simple terms is to enable a mobile money customer on one network’s proprietary system to send or receive money from another customer on a different network. Regulators typically want this to help boost competition, drive financial inclusion and encourage consumer usage. Network operators are less keen due to the short to medium costs as well as the fact it it reduces the need for customers to own multiple phone services to move money around.

Already, operators in Kenya, which is seen as the leading mobile money market in Africa owing to the success of Safaricom’s M-Pesa, have said that they will introduce full interoperability next month. Pilot projects on this are already underway, with operators launching the trial version in January this year. Another African country, Tanzania, introduced interoperability in its mobile money scene in 2015, becoming the first African country to do so and regulators in the country are now looking to further expand this arrangement.

Photo courtesy of Simone McCourtie.