Airtel Money customers will not be able to withdraw funds from Safaricom’s M-Pesa agents and vice-versa even as the two leading telecoms companies move to facilitate smooth flow of funds across networks under the interoperability platform that goes live on Tuesday.
Airtel said it still expects customers to withdraw money from agents of the respective networks because “agent interoperability is not available.”
“It all means that when an Airtel Money customer sends money to an M-Pesa customer, the account balance of the M-Pesa customer will be updated instantly and the M-Pesa customer can either go to an M-Pesa agent to withdraw the funds or use it in other mobile cash transactions,” said Airtel.
The telecoms operators said in a statement published in local newspapers on Friday that interoperability is aimed at easing the transfer of funds across networks by connecting the mobile wallet.
Previously, a customer would receive an SMS from another network notifying them that money had been sent. They would then have to look for an agent of the network from which the money was sent to withdraw and then deposit the same into their own wallet.
The money would be reversed to the sender if not withdrawn within seven days.
“Interoperability had been identified by a competition study as one of the important aspects with regards to ensuring effective competition in the mobile money market. The initiative is therefore complementary to the findings of the study,” the Communications Authority of Kenya (CA) said.
The service on both networks will initially be available on USSD (shortcode) rather than within the apps.
“Subscribers on the Safaricom network will need to use a shortcode to send money, as opposed to sending money to other M-Pesa subscribers via Sim Toolkit or the Safaricom App,” Safaricom said.
Safaricom has dubbed its service M-Pesa Popote, setting a minimum Sh10 and a maximum Sh70,000 limit for money being sent or received on M-Pesa.
Prevailing on net money transfer tariffs will apply to any money sent via M-Pesa Tuma Popote while customers sending to unregistered recipients using the menu option will be charged the off-net tariff.
“For cross wallet transfer, we have shared our proposed tariff and the same is under review by the Central Bank of Kenya,” Airtel said.
Safaricom is the dominant player in the mobile money market which accounts for 67 per cent of mobile money agents and about 40,000 merchants, who accept M-Pesa payments.
The number of active mobile money transfer subscriptions and registered agents stood at 28.1 million and 184,537 respectively, according to CA statistics for the first quarter of 2107/2018.
M-Pesa controlled 80.8 per cent market share during the quarter under review. Equitel Money accounted for 6.8 per cent of the market while Mobikash had 6.3 per cent.
Airtel Money and Mobile Pay Limited stood at 5.8 per cent and 0.3 per cent market shares respectively.
Interoperability is the latest development in the money transfer market, coming nearly a year after banks successfully integrated their systems using PesaLink – an electronic platform that allows transfer of funds across accounts in different banks.
The platform is offered by Integrated Payment Services Ltd (IPSL), a fully owned subsidiary of Kenya Bankers Association (KBA), and can handle person-to-person transfers from as low as Sh10 to a high of Sh999,999.
PesaLink was expected to rival mobile money services currently dominated by Safaricom’s M-Pesa. KBA manages the switch and facilitates direct transfers without going through intermediaries such as M-Pesa, Airtel Money and Tkash.
In its first nine months of operation, the interbank money transfer platform transacted Sh8 billion.
While the initial phase of the project involved person-to-person transfers, the second phase will include businesses and establish partnerships with government agencies, mobile virtual network operators (MVNO) and other players in the mobile money transfer subsector.
This would result in a fully integrated banking and mobile money system.