Three major telcos in Tanzania – Tigo, Airtel and Zantel – have just announced an agreement to enable mobile money payments between their customers in Tanzania. This means that customers on Tigo Pesa, Airtel Money, and EzyPesa will soon be able conduct mobile money transactions within each other.

Similar to SMS and voice call agreements that were forged in the early days of the mobile industry, this agreement is the first of its kind in Africa. It will go a long way towards replication of the kind of success mobile money has seen in Kenya.

The inability of mobile money services to “talk” to each other or, interoperate if you would, has been a major barrier to its success. One great reason why mobile money worked in Kenya is because Safaricom had over 70 percent market share, which was in effect a monopoly. Adoption was easy because there was just one service. Compare to Nigeria where there are at least 21 mobile money licenses issued to banks and third parties, and none to telcos.

Mobile money is so structured that telcos are intended to be the major drivers. But in a country like Nigeria where the smallest telco has more customers than the biggest bank, it comes at no surprise that the Central Bank of Nigeria would opt take protectionist precautions by banning telcos from obtaining mobile money licenses. It’s a different case in a country like Tanzania where:

The three companies also paid tribute to the Bank of Tanzania (B.O.T) for facilitating interoperability, the Bill and Malinda Gates Foundation and IFC for playing the leading role on this initiative.

Further reading:

[Update] – The Tanzania telcos agreement is not the first of its kind in Africa. Back in April the GSMA announced that 9 mobile networks from the Middle East and Africa had made a similar commitment to implementing mobile money interoperability.

Muyiwa Matuluko Author

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