Page 110 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

Mandate Currently, the Central Bank is responsible for the approval and regulation of mobile money
services, which are the predominant form of DFS in Uganda. An informal cooperative arrange-
ment between the Central Bank and the telecom regulator exists, which will likely soon be
formalized by means of a Memorandum of Understanding (MOU). The Central Bank issued
mobile money guidelines with one of the requirements stating that systems need to be
interoperable. Also, there is a requirement that mobile money service providers should not
have exclusive contracts with Agents. The Guidelines were passed in 2013.
State of the market Before the guidelines were passed, six mobile money providers were operating in the market,
before authority’s with two of them having a combined market share of over 80 per cent. Mobile money ser-
involvement vices are offered in partnership between financial institutions and telecom companies, and
between financial institutions and third-party service providers.
Relevance assigned The relevant authorities consider interoperability an important policy issue.
to interoperability

Reason to address Six participants on the market, with two of them having a combined market share of over 80
interoperability per cent. However, there was no evidence of collusion and no noticeable barrier to entry.

Authority’s approach In regard to the non-exclusivity of Agents, all services providers were required to remove
exclusivity clauses from their contracts with Agents following the issuance of the mobile
money guidelines in 2013.

Outcome (aimed) Agents are able to serve customers of the various service providers.

Outcome (actual) Currently agents service customers of different service providers and this has increased the
uptake of mobile money services.

4 Final remarks

Although it is impossible to generalize conclusions from the survey, some similarities across the surveyed
countries can be observed. These aspects may be considered when discussing the timing for intervening for
interoperability.

DFS, like other financial services, are typically the responsibility of financial regulators, often the Central
Bank. The provision of financial services through mobile networks and/or the provision of DFS by mobile
network companies (or their subsidiaries), might make it difficult for MNOs to determine their relevant
regulator for their different service offerings. Financial regulators traditionally seek financial stability through
safeguarding public confidence (Khiaonarong 2014). Telecom regulators focus on access to, and competition
in the telecommunication services (Blackman e Srivastava 2011). Without a clear definition and understanding
among regulators, there might be a regulatory overlap or gap. Thus, the financial and telco regulators need to
define their roles and responsibilities among each other before addressing DFS interoperability.

Typically, the financial regulator takes care of the service financial aspect, while the telco regulator is concerned
with the telecommunication infrastructure aspects of the service provision. The establishment of different
legal entities has been a way to deal with this topic ‒ within the same business group, one entity provides the
financial service and is under the financial regulation, whereas the other entity ‒ the MNO ‒ provides the data
transfer service under the telecommunication authority’s regulation.

Regulators generally seem to consider interoperability as an important element in the DFS ecosystem, though
the current state of interoperability in the different countries varies substantially. Even though these results
were expected, this survey contributes to stress and reveals this policy perception.

While the Philippines reports some market-driven interoperable solutions, the reports from Nigeria reveal
that, even with early attention to the topic, moral suasion was not enough to drive the market players to

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