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Tanzania’s Tigo & Vodacom Sign East Africa’s First Mobile Money Interoperability Agreement

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CORRECTION: It has come to my attention that this was in fact NOT the first mobile money interoperability service announced in Tanzania for East Africa. Mobile money interoperability became available in Tanzania in late 2014 via Airtel, Zantel and Tigo. Vodacom was actually late to the party so to speak but the significance below is that they are the largest mobile money service in Tanzania via their M-Pesa offering meaning that their coming on-board (finally?) is a massive milestone there.

I have to say I am a little surprised (for a change?) to get this news directly from Vodacom Tanzania that today they signed a mobile money interoperability agreement with Tigo Tanzania. This is something I had expected Kenya to do first since its the largest mobile money market in the world thanks to Safaricom’s wildly successful, and dare I say, dominant M-Pesa offering. We really need to see this happen in Kenya, given that as things stand it harkens back to the dark days of the past when one could not even send and receive text messages between mobile networks (thats if you can remember that far back? Circa the year 2000 or thereabouts).

The mobile money interoperability agreement means that 7 million Vodacom M-Pesa customers and 4 million Tigo Pesa customers in Tanzania will soon be able to send and receive money directly between each other at no additional cost (This. Right there. Is HUGE!). Ultimately, this exciting initiative will enhance financial inclusion and grow the mobile money ecosystem in Tanzania. In order to make the mobile money interoperability work in Tanzania, IFC developed the standards with support from GSMA.

tigoThe mobile money interoperability will basically enable Tigo and Vodacom as Tanzania’s largest mobile networks to ‘share the spoils’ of the mobile money revolution happening there – which is only second to Kenya’s in East Africa in terms of the amount of money transacted every year. I suspect this is only possible because neither Tigo or Vodacom is quite as dominant as Safaricom is in Kenya and therefore they could see the mutual benefits of working together as the two big guns in Tanzania, rather than keeping their respective mobile money systems closed.

In Kenya, its a different story as we all know. Airtel Kenya in particular has been pushing hard to get Safaricom to open up M-Pesa and remove excessive charges for non-subscriber transactions. It seems to me it will only be a matter of time before this happens and its great to see Tanzania setting the tone for a change in East Africa? I am personally really looking forward to a future where we can send and receive mobile money not just between mobile networks within just Kenya or Tanzania, but also between ALL the East African countries as well, and beyond.

 

 

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