FOCUS NOTE Building Inclusive Payment
Ecosystems in Tanzania and
Ghana
O ver the past decade, financial services
for the poor have undergone a dramatic
transformation. For years, financial institutions
share of adults with an account at a formal financial
institution (4 percentage points) (Demirgüç-Kunt
et al. 2018).
like banks and microfinance institutions (MFIs)
struggled to sustainably serve the world’s poor. Because mobile money services can reach
But advances in technology have led to innovative customers and maintain accounts at a lower cost
business models, and with them, new opportunities than can banks or MFIs, these payments platforms
for expanding the reach of financial services. At the have revolutionized the economics of providing
heart of this financial transformation is the rise of financial services to the poor. Today, a range of
digital payments services through which nearly any services providers are taking advantage of mobile
individual or business can send or receive money in money networks to reach new customers and
real time for almost any purpose and from nearly enable the provision of innovative financial and
anywhere in the country—an inclusive payment nonfinancial products and services. Banks, MFIs,
ecosystem. and FinTechs are using mobile money rails to offer
savings , loan, insurance, and other products that
Much of this transformation can be attributed to an can deepen financial inclusion.2,3 Organizations
explosion in mobile phone ownership. According from outside the financial services industry, such
to the World Bank’s World Development Indicators as off-grid solar companies and agribusinesses,
(2018), mobile phone subscriptions per 100 increasingly rely on key features of mobile money,
people living in low- and middle-income countries including real-time transactions and the ability
increased from just 40.61 in 2007 to 96.89 in 2016. to leverage existing infrastructure, such as agent
As mobile technology has found its way into the networks and mobile telephone towers, to serve
hands of those excluded from the formal financial low-income customers and those living in remote
system—about 1.7 billion people worldwide areas.
in 2017—they have increasingly leveraged this
newfound connectivity to gain access to financial Despite the strong potential of inclusive payment
services (Demirgüç-Kunt et al. 2018). Mobile ecosystems to drive greater financial inclusion,
money, a service that allows users to send and progress in developing these ecosystems has been
receive payments using their mobile phones, uneven. In 2016, only eight countries in the world
is perhaps the most notable example of how had over 40 percent of their adult populations
technology has expanded the reach of financial actively using mobile money (GSMA 2016). 4,5
No. 110 services. In Sub-Saharan Africa alone, there were This raises questions as to why success has been
June 2018 121.9 million active mobile money accounts in uneven across countries. Of these eight countries,
2017 (GSMA 2017). Since 2014, the share of
1
five are in Sub-Saharan Africa, underscoring the
Max Mattern adults with a mobile money account has grown outsized importance of mobile money as a means
and
Claudia McKay roughly twice as fast (9 percentage points) as the for increasing financial inclusion in this region.
1 Active mobile money accounts are defined as having been used in the past 90 days.
2 FinTech refers to companies and businesses that leverage emerging technologies to deliver financial products and services.
3 Over 20 percent of mobile money services offer a savings, pension, or investment product (GSMA 2017).
4 The eight countries are Kenya, Tanzania, Zimbabwe, Ghana, Uganda, Gabon, Paraguay, and Namibia.
5 The number of active mobile money users is only one metric for identifying successful inclusive payment ecosystems. While this study
uses active mobile money users as a proxy metric for success, CGAP also defines inclusive payments ecosystems using indicators that include
activity rates among those living on less than $2/day, the ratio of male to female active users, the existence of basic regulatory enablers,
supportive government policies to drive DFS use, population living within 5 km of a financial access point, and the level of competition among
DFS providers.
2
Box 1. Why are the Tanzania and Ghana experiences unique?
While this analysis could have highlighted the Ghana. The use of mobile money did not have
experiences of any number of countries that much uptake in Ghana in the early years of the first
have succeeded in developing inclusive payment deployments. But after revising its approach to
ecosystems, the Tanzanian and Ghanaian experiences regulation and passing E-Money Issuer Guidelines
hold unique and complementary lessons: in 2015, the country saw dramatic growth in the
adoption of DFS. Even before the new regulations
Tanzania. Tanzania has experienced explosive growth
were adopted, mobile money had already
in the use of mobile money since the service was first
contributed to a 41 percent increase in financial
introduced in 2008. With several providers competing
inclusion (InterMedia 2015). Since then, the Bank
for market share, a range of new use cases have
of Ghana reports that the number of active mobile
been introduced, including digital credit, savings,
money accounts has doubled, and use of these
bill payments, and more. In 2017, nearly a decade
services continues to rise even as new players and
after the first mobile money deployment launched,
products are entering the market.
60 percent of Tanzanians had used mobile money in
the past 12 months (FSDT 2017).
In the absence of traditional banking infrastructure, countries can use to achieve their own success
mobile money in Sub-Saharan Africa is increasingly (see Box 1).
becoming the “rails” on which a range of financial
services—including those from established To set the stage for analysis, the paper begins
providers like banks and MFIs—can ride. with case studies on the Tanzanian and Ghanaian
experiences, recounting their journeys from the
While much has been written about the success of introduction of mobile money to today. The stories
mobile money in Kenya, it is in many ways a unique are told through the lens of five key components
story given Safaricom’s monopoly. Kenya’s DFS of inclusive payment ecosystems identified by
trajectory cannot be replicated in other markets, CGAP through research in each country: regulatory
and most regulators and development partners approach, executive commitment and investment,
would not want to replicate it anyway—they competitive landscape, interconnected services,
likely would prefer a more competitive market. and compelling use cases (see Box 2).
Although there are now several other success
stories in Africa, little is understood about the The paper concludes with a cross-country comparison
approaches other countries in the region have that seeks to draw insights from country experiences
taken to develop inclusive payment ecosystems. that may facilitate ongoing attempts to build inclusive
This paper examines two Sub-Saharan African payment ecosystems in the rest of Sub-Saharan
countries, Tanzania and Ghana, for lessons other Africa and in developing markets worldwide.
Box 2. Key components of inclusive payment ecosystems
Regulatory Approach. Financial sector regulators Competitive Landscape. A dynamic market exists in
adopt a regulatory approach that fosters innovation, which a range of players compete to offer innovative
encourages dialogue with the private sector, and services at affordable prices.
evolves as market conditions change.
Interconnected Services. Customers can use
Executive Commitment and Investment. Payments payments accounts to transact with a broad range
providers have proactive leaders who believe in the of individuals, businesses, and government entities,
business case and are committed to providing the regardless of provider.
resources necessary to make critical investments
Compelling Use Cases. The products and services
in developing a widespread agent network and
offered via digital channels respond to customer
customer awareness, even in the face of early losses
demand and incentivize use.
and uncertain returns.
3
Case Study: Tanzania
An at-a-glance overview of Tanzania’s efforts to build an inclusive payments ecosystem is illustrated in
Figure 1. A more detailed narrative follows.
Figure 1. Registered and Active Mobile Money Accounts in Tanzania
Registered Accounts Active Accounts
80 million
2015: Parliament passes
the National Payment
Systems Act, codifying
70 regulations developed
2013: Nearly 50% of during the test-and-learn
Tanzanian adults have period and giving BoT
used mobile money in formal oversight of mobile
60 money services
the past 12 months
2013: Vodacom and 2016: Vodacom becomes
50 CBA’s M-Pawa launches, the last provider to make
becoming the first its mobile money service
digital savings and credit interoperable with other
2008: Bennu Ndulu 2011: Rene Meza product in Tanzania providers
40 appointed as becomes Managing
Governor of the Bank Director of Vodacom
of Tanzania (BoT). BoT Tanzania and proceeds 2014: Tigo Pesa becomes 2017: 60% of Tanzanian
begins issuing letters to make M-Pesa’s the world’s first mobile mobile money users
30 of no objection to success a priority for money service to offer report having made
MNOs seeking to the company. pass-through interest to an interoperable P2P
launch mobile money Vodacom receives $4.8 wallet holders transaction in the past
services million from BMGF and 6 months
20 begins to invest
2008: Zantel and heavily in its agent
Vodacom launch network and customer
10 Tanzania’s first mobile awareness of mobile
money services, money.
Z-Pesa and M-Pesa
0
2008 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16* ‘17*
projections
Percentage of Tanzanian Mobile money customers, monthly data‡
population, 15-years or older,
using mobile money† 25 million customers
Halo Pesa Ezy
Pesa
60% 20
50%
15
M-Pesa
1.1% 10
Tigo
Pesa
50
Airtel
Money
0
2015 2016 2017
2009 2013 2017
Tanzania, Access Strand (2017) Portion of financial inclusion attributable to mobile money
MM only: 36% Banked by MM: 3% Informal only: 7%
Excluded: 28%
MM and other formal non-bank: 8% Banked: 13% Other formal non-bank: 4%
*Projections based on historical growth trends. †Data represent use in the preceeding 12 months from year reported.
‡Individuals may have accounts with multiple providers; TTCL PESA data are included but were negligible
Sources: GSMA; CGAP; Bank of Tanzania (timeline); FinScope (pct using mobile money)
4
In late 2005, as the Tanzanian government was to follow in their neighbor’s footsteps was placing
preparing to amend the Bank of Tanzania Act, increasing pressure on BoT to establish guidelines
policy makers could hardly have anticipated the for nonbanks to enter the payments space. BoT
financial services revolution on the horizon. But in responded by creating new rules for electronic
2006, just a year before Safaricom M-PESA went payment schemes, codified in the 2007 Electronic
live in neighboring Kenya, Tanzania’s Central Bank Payment Scheme Guidelines. But these rules applied
(the Bank of Tanzania [BoT]) made an important only to banks and similar financial institutions.
decision.
The turning point came in January 2008, when
Section 6 of the Bank of Tanzania Act of 2006 Bennu Ndulu was appointed governor of BoT.
stipulates that the Central Bank would “conduct Ndulu was widely regarded as a believer in the
oversight functions on the payment, clearing and potential of technology to drive financial inclusion,
settlement systems in any bank, financial institution and he was keen to see Tanzania incubate a
or infrastructure service provider or company successful mobile money industry. Working with
[emphasis added].” This would have enormous his colleagues in the National Payments Systems
implications for the provision of financial services in Directorate (NPSD), Ndulu decided on a pathway
Tanzania. By extending BoT oversight of payments forward: Like its neighbor Kenya, Tanzania would
providers to include nonfinancial institutions that allow MNOs to launch their own payments services
were not traditionally under its purview, the new through the issuance of letters of no objection
law gave BoT broad powers to directly oversee (LNOs). LNOs permitted nonbank providers to
mobile money providers. This, in turn, led to legally offer their services under BoT oversight,
the emergence of mobile money just two years provided they partner with a licensed bank that
later—a development that would eventually help would keep customer float in a trust account.6
the country achieve a more than fivefold increase
in financial inclusion, from 12 percent in 2006 to Test-and-learn approach provides
65 percent in 2017 (FSDT 2006, 2017). space for innovation
Regulatory approach E-Fulusi received an LNO in early 2008 and
subsequently sold its service to Zantel, which
Betting on innovation launched Tanzania’s first mobile money offering,
Z-Pesa. Shortly thereafter, Vodacom received its
It did not take long for innovators to see the own LNO and introduced M-Pesa to the Tanzanian
opportunities afforded by BoT’s newly expanded market. In 2009, Bharti Airtel would receive its
regulatory authority. That same year, start-up own LNO for the introduction of its Airtel Money
E-Fulusi Africa Ltd. approached BoT for permission service, and a year later a fourth provider, Tigo,
to launch a new mobile-phone-based domestic would likewise be allowed to enter the market with
remittance product. But despite its new mandate Tigo Pesa (di Castri and Gidvani 2014).
to oversee such payments providers, BoT had not
yet defined specific rules on how to do so and was “The letters of no objection mimicked the licensing
unsure of how to approach a nonbank seeking to process,” explains Kennedy Komba, an adviser to
enter the payments space. NPSD at the time. Before offering an LNO to a new
provider, BoT would conduct due diligence, which
By mid-2007, as rains gave way to the dry season, included the inspection of the provider’s systems
change was already in the air. The launch of and a mandatory pilot period for services that did
Safaricom’s M-PESA in Kenya and growing interest not have an existing deployment in another country
by Tanzanian mobile network operators (MNOs) (e.g., M-PESA in Kenya). Furthermore, each LNO
6 For more on regulation of nonbank e-money issuers, see Tarazi and Breloff (2010).
5
Figure 2: Change in the volume
Figure 2. Change in the Volume and a provider’s LNO—would soon become a risk in and
and value of transactions.
Value of Transactions of itself, given the increasing systemic importance
50,000% of the country’s mobile money deployments.
Volume of
transactions “We observed and analyzed the situation on the
40,000 growth of these services and noted that they have
become payment services of wide importance, thus
requiring systematic, consistent and predictable risk
30,000
management processes,” Komba recalls. “So, the
only way to manage this thing was to issue a law.”
20,000
Value of Fortunately, BoT had been engaging with the
transactions industry, gathering data on the performance of
10,000
mobile money deployments, and learning from the
approach of regulators in other markets. NPSD
0 began the process of drafting Electronic Money
‘09 ‘11 ‘13 ‘15 ‘16* ‘17* Issuer (EMI) Guidelines in 2010, after a visit to the
projections Philippines to review that country’s approach to
establishing regulations for mobile money. After
*Projections based on historical growth trends.
submitting an initial draft for review by the Alliance
Source: Bank of Tanzania
Source: Bank of Tanzania for Financial Inclusion (AFI) and GSMA in early 2012,
BoT released a revised draft of its EMI Guidelines in
May 2014 (di Castri and Gidvani 2014).
stipulated that the provider must supply statistics
on key aspects of the service to BoT; regulators While the EMI Guidelines would not ultimately
were expected to conduct both scheduled and be adopted as regulations until a new National
unscheduled inspections to ensure compliance. Payment Systems (NPS) Act was passed by
Parliament in 2015, the draft signaled to the industry
Most importantly, the LNOs gave providers the that the Central Bank planned to put in place
confidence and space to invest and innovate key regulatory enablers, said Komba (see Box 3).
(see Figure 2), even as BoT tested regulations, Chief among these was the formalization of the
learned from the market, and began drafting a licensing process for nonbank e-money issuers,
payments system law that would enshrine these which promised nonbank providers continued
lessons in a more durable and formal regulatory control over their services and gave them the
framework. This approach, referred to as confidence to continue investing.
“test-and-learn,” is widely considered to have
contributed to Tanzania’s success in developing Executive commitment
an inclusive payments ecosystem.7 and investment
Lessons become law As Jacques Voogt sat down for another strategy
meeting with the Vodacom M-Pesa team, the
Two years after Vodacom M-Pesa and Z-Pesa future of the mobile money service remained
entered the market, mobile money was beginning uncertain. After just over a year at the helm of
to gain traction in Tanzania. But with providers still Vodacom Tanzania’s M-Commerce department,
operating under LNOs, Ndulu worried that BoT’s Voogt shook his head as he reviewed the numbers.
only recourse in the event of misconduct—rescinding Despite the hype surrounding the introduction of
7 For more on why test-and-learn helped Tanzania, see Tarazi (2010). For an opinion that argues the risks of such an approach over the long
term, see Mazer (2016).
6
Box 3. Tanzania and the four basic regulatory enablers for digital financial services
CGAP has identified four basic regulatory enablers are covered under the Guidelines on Agent Banking
for the success of DFS. The following briefly for Banks and Financial Institutions, 2017.
defines each enabler and compares it to Tanzania’s
3. Risk-Based Customer Due Diligence. A
Electronic Money Regulations, which were adopted
proportionate anti-money laundering framework
in 2015:
allows simplified customer due diligence (CDD) for
1. Nonbank E-Money Issuance. Regulations include lower-risk accounts and transactions. The Electronic
a specialized licensing window for nonbank providers Money Regulations introduced four “tiers” for CDD,
to issue prepaid accounts without being subject to including a lower level for opening individual entry-
the full range of prudential rules applicable to banks level accounts that requires (among other things) a
and without being permitted to intermediate funds. registered phone number, voter registration card, or
Tanzania’s EMI Guidelines allow nonbank providers a letter from a ward executive.
to receive a license as “a separate legal entity for
4. Consumer Protection. Ideally, consumer protection
issuance of electronic money.”
rules should be tailored to the full range of DFS
2. Use of Agents. Providers—both banks and providers and products. In Tanzania, consumer
nonbanks—are permitted to use third-party agents to protection rules are included in the Electronic Money
deliver financial services. The EMI Guidelines address Regulations, but the country has no overarching
the use of agents by EMIs, whereas banking agents consumer protection framework for financial services.
Source: Staschen and Meagher (2018).
mobile money in Tanzania, by 2010 only about And despite Vodacom’s presence throughout
12 percent of adults had ever used the product Tanzania, moving cash across the country was
(Montez and Goldstein 2010). quite different from selling airtime and required
an entirely new distribution model.
“When we started in 2008, the typical beginning of
M-Pesa was: Let’s put out a value proposition for Voogt worried that securing buy-in from
sending money home,” Voogt recalls of the early Vodacom’s management would not be easy. As
Vodacom strategy in Tanzania. “Let’s put out some part of Vodacom’s Brand and Marketing unit,
advertisements, and let’s get ready to onboard M-Pesa still was not treated as a separate business
millions of customers. But it didn’t happen.” line. Relegated to a category of services that
included ringtones, mobile money was simply
Meanwhile, the mobile payments space was rapidly not seen as a priority by management, who were
becoming crowded. That year, Tigo launched Tigo locked in a battle for dominance in the business
Pesa, the fourth mobile money service to go live in they knew best—voice and data. In its early days,
the country. Unlike Safaricom in Kenya, Vodacom mobile money was valued by MNOs (if at all) as a
could not take its position as the country’s top potential source of indirect revenue—a means of
mobile money provider for granted. reducing churn and increasing brand loyalty for
the core business, voice and data. But all of that
Doubling down on agent would change in 2011, when Rene Meza became
network expansion Vodacom’s managing director.
Faced with fierce competition in the GSM (global Meza, formerly managing director of Airtel
cellular network) space, Voogt and his colleagues Kenya, was intimately familiar with the potential
suspected that a successful mobile money service of mobile money. During his time in Kenya, he
could be a game changer for attracting and had seen Safaricom launch a juggernaut that
retaining customers. But before customers could not only reshaped the financial services industry
begin using the new service, Vodacom needed to in the country, but also cemented Safaricom’s
invest in building an extensive agent network to already dominant position in the GSM space.
facilitate cash-in and cash-out (CICO) transactions. For Meza, ensuring the success of Vodacom M-Pesa
7
Box 4. How much does it cost to build a mobile money service?
In a 2014 study, GSMA offers insights into the need time and resources to build the agent network
investment required to build a successful mobile and acquire and educate customers.
money deployment and the time it takes to achieve High-Growth Stage. Once a provider acquires at least
profitability. Faced with enormous upfront costs 15 percent of its GSM customers as active mobile
associated with building out agent infrastructure money users, both operational expenses and revenue
and driving customer awareness, providers should begin to increase. At this point, providers should
expect to incur losses in early years, before eventually expect to achieve modest, positive net margins even as
achieving profitability 4–5 years after launch. The increased investment is required to educate customers
findings underscore the significant resources—and and drive a transition from over-the-counter (OTC)
management commitment—required to achieve transactions to mobile wallet-based transactions.
success in the mobile money space.
Mature, Ecosystem-Based Deployment. Beyond
Start-Up Phase. In years 1–3, providers should expect Year 5, profit margins begin to exceed 20 percent as
to invest six to eight times the revenue generated the share of OTC transactions declines. At this point,
by a mobile money deployment. Profitability should new products and services, such as credit scoring and
not be a focus at this stage, because the service will data analytics, can contribute to overall profitability.
Source: Almazan and Vonthron (2014).
in Tanzania was core to his strategy as managing Driving customer awareness
director, and he quickly set about reshaping how
the service fit into Vodacom’s overall business. In the year following Meza’s appointment,
investment in agents surged (see Figure 3).
Meza’s first move was to restructure the company Between 2011 and 2012, the number of mobile
so that M-Pesa would report its own profits and money agents in Tanzania grew by 288 percent,
losses as a separate business line, and more with spending on mobile money growing to an
specifically provide a clear focus area for MFS within estimated 40 percent of the total marketing
the company. But he did not stop there. Beyond budget. One member of the M-Pesa team at the
elevating the profile of M-Pesa within Vodacom, time, Innocent Ephraim, remembers how Vodacom
he also unlocked new capital to drive an aggressive would track money sent to customers who were
investment strategy. The change in leadership “had not yet covered by an agent and use that data
an awesome effect,” recalls Voogt.8 to determine where to target agent network
expansion. “When we saw where this money was
Another key factor in Vodacom’s agent expansion going, we would plan to add an agent in the area
strategy was a shift from a direct recruitment and then communicate back to the customer to let
model to a model based on agent aggregators them know that they were now able to send money
or “super dealers.” Approaching mom-and-pop to that area and use mobile money.”
shops and trying to convince them to become
Vodacom M-Pesa agents was costly and time But sitting at his desk and reviewing the latest
consuming, making it hard for M-Pesa to sustain M-Pesa numbers, Voogt knew that building agent
at scale. So, Vodacom turned to organizations that networks was only one piece of the puzzle. A
would recruit and manage individual agents on its 2013 InterMedia study showed that 36 percent
behalf. These super dealers could also leverage the of nonusers said that not knowing how to use
country’s banking infrastructure to help manage the service was the main reason for not having
agent liquidity, by using bank branches to bring tried mobile money. This raised questions around
cash into hard-to-reach areas. whether Vodacom was doing enough to educate
8 In 2011, there was little information on the cost of building a mobile money service or the time required to reach profitability, making
Meza’s decision to invest all the more significant.
8
Figure Mobile
3. 3:
Figure Money
Mobile Agents
money and
agents Volume
and of of
Transactions
volume transactions
300,000 agents 1.5 billion transactions
200,000 1.0
100,000 0.5
0 0
2009 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 2009 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15
Source: Bank of Tanzania
Source: Bank of Tanzania
potential customers. Moreover, even among below-the-line (BTL) campaign to push customers
customers who were aware of the service, negative to M-Pesa agents.9 The BMGF grant provided vital
perceptions had begun to take hold. Focus group support at a time of uncertainty for mobile money
discussions revealed that some customers had providers by facilitating important investments in
heard rumors of unreliable networks, lack of customer awareness and education.
security, and high costs (InterMedia 2013). “We
got caught in that proverbial chicken and egg The impact of Vodacom’s three-pronged
[situation] where customers weren’t coming, and investment strategy (ATL, BTL, and agent training)
agents weren’t educating customers because they was clear. Just over 4 years after the first mobile
weren’t coming,” he remembers. money services launched, DFS use had skyrocketed,
with nearly 50 percent of Tanzanian adults in 2013
Voogt knew that driving customer awareness of reporting that they had used one of the services in
mobile money would be expensive. He estimated the past 12 months (FSDT 2013).
that it took at least 30 minutes of personal
interaction (with an agent, field agent, friend, or Clearly, the market had turned a corner, but as
family member familiar with M-Pesa) to teach a Meza and his team celebrated their success, they
new customer how to use a mobile money service. knew that the battle was far from won. Despite
But fortunately for Voogt and his colleagues, the their early mover advantage, competitors had
M-Pesa team’s commitment to building mobile also benefited from Vodacom’s investment. With
money in Tanzania had caught the attention of the providers locked in a struggle to become the
an important donor. Recognizing the opportunity nation’s preferred payments provider, the M-Pesa
offered by Vodacom’s progressive leadership, the team turned its attention to the next big innovation
Bill & Melinda Gates Foundation (BMGF) offered that would give it a leg up over the competition.
to help Vodacom with an aggressive customer-
awareness campaign focused on accelerating Competitive landscape
adoption, especially in rural Tanzania. By the
end of 2011, Vodacom received $4.8 million Competition heats up
from BMGF and prepared to push forward with
an aggressive above-the-line (ATL) campaign and As Andrew Hodgson and his team at Tigo prepared
a dramatic increase in resource allocation for a to relaunch their MFS offering, they were not unduly
9 ATL advertising refers to the use of mass media to promote products and services. BTL refers to in-person promotion such as providing
information to the customer at the point-of-sale, distributing brochures, or conducting product demos.
9
concerned with Vodacom’s moves to ramp up Figure
Figure 4: Agent
4. Agent exclusivity,
Exclusivity, 2012
investment in customer awareness and education. 2012
Despite Vodacom’s first mover advantage, the head of
Mobile Financial Services for Tigo Tanzania suspected Non-Exclusive
that increased customer familiarity with mobile money
Exclusive
would ultimately benefit all MFS providers.
Rural
Reacting to Vodacom’s investment, Hodgson and
38% 62%
his team began to develop a strategy for gaining a
foothold in the emerging mobile payments space. Urban, Non-Dar es Salaam
“We recognized an opportunity to benefit from our 45% 55%
competitor’s investments in agent recruitment and
customer awareness,” explains Hodgson. “Even Dar es Salaam
though there was no cooperation, I believe that both
84% 16%
parties benefitted from a shared agent network and
investment in education and awareness.” Country total
52% 48%
Far from ceding the market to M-Pesa, Tigo moved
ahead with their own investment strategy aimed Source: Helix Institute 2013
Source: Helix Institute 2013
at taking advantage of the business opportunities
afforded by mobile money. With support from both
the OpCo and Millicom Group,10 Tigo leveraged its marketing department and wasn’t seen as an
position as the country’s number two voice network important product at the time.”
to muscle its way to mobile money dominance in
Tanzania’s big cities. Because agent nonexclusivity But by 2012, Airtel’s chief commercial officer,
was mandated in the draft EMI guidelines,11 Tigo was Chiruyi Walingo, was ready to turn things around.
able to exploit Vodacom’s investment in agents by Walingo himself was a veteran of the early mobile
recruiting those same agents to provide CICO services money days in Kenya, where he worked as head of
for Tigo Pesa (see Figure 4). The strategy centered sales at Safaricom. And he pushed the Airtel Money
on offering competitive commission rates to M-Pesa team to make its own play for greater market share.
agents who opened a Tigo Pesa till, 12
even as they His strategy included leveraging Airtel’s already
offered promotions that would drive customers substantial presence in rural areas to recruit new
to these newly recruited agents. Tigo’s agent agents, as well as introducing promotions to
acquisition strategy, which focused largely on Dar es encourage new customers to try the service. But
Salaam and other big cities, is borne out in statistics with Airtel still behind its competitors, Walingo
on the increasing number of nonexclusive agents made a dramatic move: In 2012, Airtel Money
found in urban areas (see Figure 4). temporarily waived mobile money transfer fees,
which gave its customers the ability to send money
Even as its competitors stepped up their free of charge to other Airtel Money customers.
investments, Airtel Money struggled to gain
traction after its early stumbles following its launch In the end, the Tigo and Airtel strategies were
in 2009. The former m-commerce manager of a success. By January 2016, the two competitors
Airtel Tanzania, John Ndunguru, describes the had begun to chip away at M-Pesa’s market
challenges he faced in convincing Airtel to invest share, together representing over 50 percent of
in the new product: “It was still a unit within the registered subscribers in the country.
10 Tigo Tanzania is a subsidiary of Millicom Group.
11 Agent nonexclusivity refers to the prohibition on providers mandating that their agents cannot also serve as agents for a competing provider.
For more information, see Tarazi and Kumar (2012).
12 A till refers to the cash kept by mobile money agents to manage CICO transactions for a provider.
10
Box 5. Competition drives innovations in pass-through interest
As BoT was drafting its EMI Guidelines in 2012–2013, rate to attract operator trust fund deposits, but were
it included a provision that requires mobile money not happy when we passed this benefit through to
providers to use the interest earned on customer float the consumer. They felt it undermined the value
held in bank trust accounts for the “benefit of these proposition of their savings products.”
customers.” The language was left deliberately vague,
Tigo was not actually paying the interest themselves,
and BoT’s intention was to have providers submit
rather the banks were paying it to them as trustees
proposals and compete to see who could come up with
of customer float, and they were passing this benefit
the best ideas. Most providers were either not in a rush
on to their customers. This was a groundbreaking
to develop approaches to satisfy this requirement or
development for mobile money, and one that put Tigo
had their proposals (e.g., to develop a foundation that
in direct competition with banks that had so far shown
would donate to charitable causes) rejected. However,
little interest in serving low-income customers.
Hodgson at Tigo Pesa sensed an opportunity to
differentiate his service from those of his competitors. “Due to the size and nature of the funds held in
trust, we were able to negotiate a competitive rate
What Hodgson eventually introduced would shock
approaching the T-Bill rate. The benefits of this return
the financial services industry in Tanzania and draw
were passed directly through to the customer. The
loud protests from mobile money providers and banks
net result could be likened to receiving a long-term,
alike. In 2014, Tigo Pesa became the world’s first
fixed deposit rate on current account balances as
mobile money provider to distribute profits earned
low as 1,000 tsh (about US$0.50). That was probably
from accrued interest on customer mobile wallet
our most meaningful contribution to banking the
balances held in bank trust accounts. “We took a
unbanked at that time,” says Hodgson.
lot of heat from the banks and other mobile money
providers,” Hodgson recalls. “The banks accepted Today, all MNOs in Tanzania offer pass-through
that they would need to pay a competitive interest interest to their customers.
Reflecting on how competition affected M-Pesa, “We’re smarter in what we do,” Lopokoiyit says.
especially given the moves by Tigo and Airtel to “Competition has made us much more careful about
benefit from the significant early investments that how we pursue new products.” It had also forced
Vodacom made in building its agent networks, further integration between Vodacom’s mobile
Voogt sounds an optimistic tone. Competition money and GSM businesses: “The businesses are
from the other providers had helped to increase intrinsically linked. I don’t see a GSM and a mobile
customer awareness of mobile money, he explains, money customer, they’re the same.”
as competitors poured resources into their own
advertising campaigns. Moreover, he claims that the But at the same time, he acknowledges that
ability of M-Pesa agents to work with other providers competition may have had more of an impact
was making their businesses more sustainable. on the GSM business than on mobile money—
especially when it comes to pricing.13 As of 2016,
The impact of a competitive market Tanzania had the lowest prices for mobile data on
the continent (Lyomo 2016); the cost per minute
Despite the benefits cited by Voogt, his successor, for calls also remains low relative to that of other
Sitoyo Lopokoiyit, faced a vastly different market countries (Corporate Digest 2014). Yet, competition
landscape when he took over as head of M-Pesa in 2016. has not had a similar impact on pricing for mobile
While M-Pesa remained the market leader, especially in money: “On the GSM side, it’s competitive,”
the rural areas where Vodacom had invested so heavily acknowledges Lopokoiyit, referring to prices offered
early on, he and his team could no longer count on to customers. “On the financial services side, it’s
their first-mover advantage to guarantee continued competitive but not as much. Part of this is agent
dominance. With Tigo Pesa and Airtel Money nipping commissions. There’s a natural floor because you
at his heels, he reflected on how competition had can’t reduce prices too low since you need to cover
changed the dynamics of mobile money in Tanzania. commissions.”
13 For more information on mobile money pricing, see Cook (2017).
11
Box 6. Is competition making mobile money more inclusive? The case of Halotel
One surprising development in the saga of Tanzania’s But perhaps most interesting is Halotel’s recent launch
competition among MNOs has been the entry of the of its own mobile money service, Halopesa. “We have
Vietnamese telco Halotel into Tanzania’s crowded a comprehensive strategy with our Halopesa strategy
mobile space. After launching in 2015, Halotel has which goes in line with the government’s wider
pursued an aggressive expansion strategy that financial inclusion scheme,” Managing Director Li Van
explicitly focuses on serving poor, rural communities. Dai said. He added that Halopesa is also partnering
with financial institutions to offer loans to its customers
By 2017, Halotel had managed to capture 9 percent
through the Halopesa platform.
of the country’s mobile subscriptions, outpacing
Zantel to take the number four spot behind Vodacom, It remains to be seen whether Halotel’s focus on the
Tigo, and Airtel. Already, the company has invested rural poor will carry over to its mobile money and
$700 million of a planned $1.7 billion investment broader mobile financial services offerings. But what
in mobile network connectivity and/or agent is clear is that intense competition in the mobile space
networks, and has managed to cover 95 percent of is driving a greater focus on those customers who
the country—including 3,000 villages that had not have thus far been excluded from Tanzania’s rapidly
previously had mobile network coverage. expanding array of mobile services.
Source: The Citizen (2017).
A future of “coopetition” through M-Pesa, before upgrading to a full-fledged
digital product offering in 2015. Today, Access Bank
In its early years, mobile financial services (MFS) were customers can open a free current account and move
synonymous with mobile money. It follows that much money in and out of the account using their mobile
of the focus on competition in MFS was discussed money wallets. The bank’s strategy is now largely
in the context of a fight for market share among focused on offering digital channels and digital
mobile money providers. But as MFS has matured, products, with efforts underway to build its own
the competitive dynamic has evolved. agent network to serve higher balance small and
medium enterprise customers.
When Roland Coulon became CEO of Access Bank
Tanzania in 2011, he was unsure of how to view Access Bank is not alone in embracing mobile
the rise of mobile money. “We come from a very money as a means for reaching greater numbers
traditional microfinance model,” Coulon explains. of customers at a lower cost. Several banks have
“Digital finance, especially in Africa, didn’t come already partnered with mobile money providers to
to us as an obvious turn that we needed to take.” offer customers a wider range of financial services.
For example, Commercial Bank of Africa (CBA) has
Like most banks and MFIs in Tanzania, Access Bank partnered with Vodacom to create a digital savings
did not see a role for agency banking in the early days and credit product called M-Pawa; credit provider
of MFS. Moreover, even as many financial institutions, Jumo has joined with Airtel to offer its Timiza digital
including Access Bank, became involved in the mobile credit product; and FINCA Microfinance Bank and
payments ecosystem by serving as super dealers, Halotel now provide customers the option to save
they saw the mobile money providers as competing with their HaloYako offering (see Figure 5).
with them for customer deposits.
“Increasingly what we’re seeing is that there is more
But as mobile money use continued to grow, Coulon complementarity than competition,” says Coulon.
saw an opportunity where he had once seen only
threats. He and his colleagues realized that mobile Voogt, the former head of M-Pesa, agrees: “On
money networks could reduce costs by removing partnerships, the big guys—like the big banks—will
pressure to build new branches and send loan be crucial in building out use cases like savings
officers to service customers in hard-to-reach areas. and loan products and expanding the e-money
Access Bank began by introducing loan repayments ecosystem, thus reducing the need to cash out.”
12
Figure 5: Volume of mobile banking transactions compared with their value
Figure 5. Volume of Mobile Banking Transactions Compared with their Value
50 million transactions 2.0 million Tzsh
1.80
40 1.5
30 1.16
1.0
20
0.58
0.5
10 302
224
57 124 155
0
0
2008 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 2008 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15
Note: 2 million TZSH = $900 USD Source: Bank of Tanzania
Source: Bank of Tanzania
Despite their newfound appetite for collaboration, Fortunately for Hodgson, the draft EMI Guidelines
neither the banks nor the MNOs are resting easy. already stipulated that mobile payments services
As Voogt’s successor at M-Pesa, Lopokoiyit, warns, needed to “be able to provide” interoperable services
“Ali Pay, Facebook, WhatsApp, and others are with other mobile payments services providers (di
coming into the market. Competition isn’t local Castri and Gidvani 2014). This meant that a framework
anymore, it’s international.” While no one can for creating interoperability was already in place,
predict what digital finance in Tanzania will look pending an agreement among the providers.15
like 10 or even five years down the road, Vodacom
and others are racing to prepare for the future. Hodgson had been advocating the principle of
interoperability to his market counterparts since early
Interconnected services 2012, but he faced resistance (Koblanc 2015). “We
were at loggerheads with our competitors over many
Providers forge ahead with things, and had many philosophical debates – mostly
industry-led interoperability centered around interchange pricing,” remembers
Hodgson of conversations with his fellow mobile money
While financial institutions and MNOs sought to put heads. “Obviously, from a market share perspective,
their past enmity behind them, Hodgson of Tigo Pesa some operators are going to try to keep the opposition
wondered whether this new idea of “coopetition” from benefiting from a cooperative model for as long as
might also work to benefit mobile money services. possible.”
Although Tigo Pesa had come a long way since its late
entry into the market, M-Pesa’s early mover advantage In September 2013, the International Finance
had proven more durable than he expected. Corporation (IFC) convened industry leaders to
discuss mobile money interoperability. The IFC
“I think that the regulators have a responsibility convening was part of a year-long BMGF-funded
to ensure that one player is not able to exploit effort to facilitate agreement around an approach to
their monopolistic position,” Insists Hodgson. In connecting Tanzania’s mobile money networks. This
his opinion, the best way to level the playing field effort resulted in a set of governance and operating
would be to ensure that customers who use any rules to govern mobile money interoperability.
mobile money service are able to transact with By September 2014, the providers had decided
customers of any other mobile money service—a on participation criteria, clearing and settlement
principle known as interoperability. 14
principles, and approaches to dispute resolution.
14 This paper refers specifically to P2P interoperability in which a customer of one service provider can send money directly into the wallet of
a customer of a different service. There are many workarounds for interoperability (including aggregators and OTC), some of which will be
explored later in the paper.
15 For more on interoperability and ways it can be achieved in mobile money, see Arabéhéty et al. (2016).
13
To begin, they agreed to connect and negotiate send to any wallet in urban areas. But none
pricing bilaterally with the other providers, in of this really happened. Customers benefited
line with guidance from the Fair Competition from being able to send money “off-net”
Commission of Tanzania (Koblanc 2015). and the receiver had the option to cash out
or continue to spend through the e-money
Despite concerns that interoperability would lead ecosystem. Right now, I’m a big supporter of
to fundamental shifts in providers’ market power, interoperability, as it reduces the time taken
both Airtel Money and Zantel’s Ezy Pesa recognized to return to cash and this always benefits the
the opportunities presented by connecting with mobile money ecosystem for all.
their competitors. By the end of 2014, both MNOs
joined Tigo Pesa in being the first to establish Although Tanzania was not the first interoperable
interoperability agreements. Despite initial hesitation, DFS scheme globally,16 it was unique in the extent
the combined market shares of these three providers to which industry participants led the process
created pressure for Vodacom to follow suit. And in of determining governance and business rules.
February 2016, Vodacom’s M-Pesa announced that it Interoperability in other markets had not resulted
would also be joining its competitors in establishing in significant volumes at this point, and there was
interoperability (Koblanc 2015). great interest in seeing whether the Tanzania story
would be any different. Between October 2014 and
The impact of interoperability September 2017, interoperable person-to-person
(P2P) transactions grew steadily at an average
In the end, interoperability did not turn out to be rate of 16 percent per month (see Figure 6).
the threat that Vodacom had imagined. As the Moreover, as demonstrated in Figure 6, almost all
head of M-Pesa at the time, Voogt, remembers: net new growth in P2P transactions during this
time were from interoperable transactions. An
Interoperability was one of my most interesting October 2017 CGAP survey of Tanzanian adults
journeys, because we were really anxious found that 60 percent of mobile money users
about what this would do to us. We thought had made an interoperable P2P transaction in
that we were going to lose the urban areas, the past 12 months (see Figure 7). Interestingly,
because now people in the rural areas could 25 percent of respondents who had not conducted
Figure
Figure 6: Volume
6. Volume of and
of P2P P2P Interoperable
and Interoperable P2P Transactions
P2P Transactions
25 million
P2P same network + Vouchers Volume
20
15
10
P2P Interoperable Volume
5
0
2014 2015 2016 2017
Source:Source: Bank of
Bank of Tanzania Tanzania
16 For example, Indonesian mobile money services announced they were interoperable in 2013 (Camner 2013).
14
Figure 7
Figure 7.
Of all respondents, …79% of those 57% of all
88% used a mobile respondents sent respondents sent
wallet to send money mobile money to a money using
in the past year… different network account-to-account.
Source: CGAP
an interoperable transaction were unaware that phone, account ownership continued to fall behind
such transactions were even possible, pointing overall use. According to Findex (2018), 39 percent
to an ongoing need to educate customers and of Tanzanian adults used a registered mobile
raise awareness (Cook 2018). money account to perform transactions in 2017,
significantly lower than FinScope results from the
Compelling use cases same year indicating that 60 percent of adults had
used mobile money (FSDT 2017). But how customers
Trying to move beyond P2P used services like M-Pesa was changing rapidly, and
Lokopoiyit hoped that use cases beyond P2P would
With the increasing diversity of providers involved increase the value of owning an account.
in MFS, a growing list of service offerings, and the
ability to transact across networks, providers had Diversifying the use of mobile money was a
an opportunity to make their services more relevant centerpiece of Lokopoiyit’s strategy, and he says
to users. For years, they had been trying to attract that there were indications that this approach was
new customers and drive up activity rates among beginning to bear fruit: Vodacom’s M-Pawa savings
their customers by offering new and innovative and lending product offered in partnership with CBA
ways to use mobile wallets. And by 2017, a mobile
17
had driven a significant increase in the number of
money user in Tanzania could access just about active M-Pesa customers. According to Lokopoiyit,
any type of financial service with just a few clicks by 2017, Vodacom had an estimated 6 million
of her phone keyboard. customers using M-Pawa, 50 percent of whom had
received a loan through the service. The impact
Reflecting on the evolution of mobile money from of the savings component was also pronounced:
a simple remittance product to the underpinning 35 percent of Tanzanians who save reported doing
of a digital financial ecosystem, Lopokoiyit looked so using their mobile phone, representing an
over the latest numbers on active M-Pesa users increase of 14 percentage points over 2013—a year
and tried to guess where the market would be in before the launch of M-Pawa (FSDT 2013, 2017).
the next five years. P2P transactions still dominated
(see Figure 8), and because such payments were Person-to-business (P2B) and bill payment for
easy to conduct OTC or via a friend or relative’s services like electricity were another bright spot,
17 Globally, just three out of 10 mobile money customers have transacted in the past 90 days—a number that has remained steady for the past
few years (GSMA 2017).
15
Figure 8: Volume of mobile money transactions, by type
Figure 8. Volume of Mobile Money Transactions, by Type
Person to Person Person to Business Business/Government Person to Government
payments payments to Person payments (negligible)
60 milllion
50
40
30
20
10
0
2014 2015 2016 2017
Source: Source: Bank of
Bank of Tanzania Tanzania
with a growing number of Tanzanians using their to the early years of mobile money and how his
mobile wallets to pay for goods and services. colleagues at Vodacom had seized on the business
The rise of pay-as-you-go (PAYGo) solar companies opportunities presented by digitizing remittances.
allowed even those who were excluded from the He remembered that before mobile money use
country’s electricity grid to use their phones to became widespread, many customers were using
pay for inexpensive off-grid energy. Moreover, an airtime transfers to send money to friends and
increasing number of banks and MFIs offered the family in other parts of the country. Upon receiving
ability to receive and repay loans using mobile an airtime voucher, the recipient would convert the
money and to transfer funds between mobile voucher to cash by selling it to someone in need
wallets and deposit accounts. Data also showed of airtime—often at a discount of 10–40 percent
that government was becoming a bigger force in (Koblanc 2015).
the mobile payments space, especially following a
decision in 2016 to pilot mobile money payments to “MNOs had data on people sending airtime from
the nearly 1.2 million beneficiaries of the Tanzania one person to another,” explains Ndunguru, former
Social Action Fund (TASAF) cash transfer program head of M-Commerce for Airtel, adding that the
(Nkwame 2016). numbers were “quite substantial.” The thinking
at the time was that if airtime was already being
Understanding the P2P use case sent from one person to another, there would
likely be demand for a mobile money service that
As Lokopoiyit debated which of these new use facilitated P2P payments. They would turn out to
cases would be the next big thing, he thought back be right.
16
Box 7. The role of aggregators in offering new use cases for mobile money
CGAP describes aggregators as “the glue that to provide the service that these guys do? Who is
helps many parts of the digital financial services going to take the API from Tigo or Vodacom and
ecosystem to work together.” Working behind the bring it together?”
scenes, these companies provide a valuable service
The importance of aggregators is underscored
to organizations that do not have the resources or in-
by the time and resources involved in connecting
house IT capacity to connect directly to mobile money
third parties to mobile money services. Individual
network application programming interfaces (APIs).
integrations between a mobile money service and
For example, most electricity payments in Tanzania
a third party like a bank or utility company are
are now processed by aggregator Selcom.
estimated to cost anywhere between $15,000 to
Without aggregators, many of the services available to $30,000 and take 4–6 months to complete. Using
mobile money customers in Tanzania may never have aggregators not only helps to avoid these upfront
made it to market. “If it weren’t for the aggregators, investments, but also allows mobile money services
the smaller banks wouldn’t even be there [offering to outsource the onerous tasks of managing
bank-wallet transfers for their customers],” says reconciliations, payment disputes, and customer
former M-Pesa Head Lopokoiyit. “Who else is going support.
Source: McKay and Pillai (2016).
Merchant payments: payments, while aggregator Selcom was trying to
The next big use case? make a play for a share of the payments market
with new NFC (near-field communications) cards
Turning his attention back to the present, linked to a Selcom wallet. As Vodacom moved
Lopokoiyit began to contemplate his next move. ahead with its strategy to acquire merchants and
“Business-to-business [B2B] and retail payments promote its Lipa na M-Pesa product, Lopokoiyit
may not make a big dent in financial inclusion, but suspected that the first provider to solve merchant
it does bring volume,” he thought. “We have over payments would control the future of mobile
450,000 customers using Lipa na M-Pesa [M-Pesa’s money in Tanzania.
merchant payment service], and if you look at the
amount of money that they keep in their wallets, Looking ahead
it’s more than doubled.”
By 2017, mobile money’s spectacular early successes
At the end of the day, what kept Lopokoiyit and in Tanzania had given way to the long, hard work of
his competitors up at night was activity rates, driving deeper customer use of DFS. Findex numbers
and merchant payments were demonstrating the for 2017 showed only modest gains in active
potential to change how customers use their mobile mobile money account ownership, from 32 percent
wallets. “You tend to do more transactions because in 2014 to 39 percent in 2017.18 This despite the
you already have the money in your wallet,” he country boasting a competitive market, a range of
reasoned. “The majority of customers who use compelling use cases, and interoperability between
Lipa na M-Pesa make more transactions than the provider networks.
average customer.”
Clearly, questions remain around whether and how
Vodacom’s competitors were already actively Tanzania will be able to sustain its successes in
exploring the merchant payments space. Tigo the months and years to come. But most signs
launched a campaign to promote merchant are pointing in the right direction. Significant
18 Findex numbers measure only adults who have used a mobile money account registered in their name in the past 12 months. On the other
hand, Finscope measures any mobile money use in the past 12 months and arrives at a higher number, 60 percent, in 2017. But in Finscope,
the increase from 50 percent in 2013 to 60 percent in 2017 falls behind growth in the early years of Tanzanian mobile money.
17
early investments in customer awareness and viability of merchant payments. And finally,
agent networks, along with a favorable regulatory Tanzania’s already competitive landscape is leading
environment, have set the stage for a range of new entrants like Halotel to push into rural areas
new players to enter the market. Meanwhile, that thus far have been left behind in Tanzania’s
interoperability is increasingly responsible for DFS revolution, even as aggregators and FinTechs
growth in P2P payments, and there are indications continue to roll out new use cases, MNOs race to
that the ability to transact across mobile money figure out merchant payments, and the specter of
networks holds important implications for the BigTech lingers on the horizon.
18
Case Study: Ghana
An at-a glance overview of Ghana’s efforts to build an inclusive payments ecosystem is illustrated in
Figure 9. A more detailed narrative follows.
Figure 9. Registered and Active Mobile Money Accounts in Ghana
Registered Accounts Active Accounts
2008: The Bank of Ghana 2011: Three years after the 2015: BoG issues the revised
(BoG) issues the Guidelines first mobile money service agent and e-money guidelines,
25 million
for Branchless Banking, launched, there are only allowing MNOs to own and
opting for a bank-led about 100,000 active mobile operate mobile money services
approach to digital financial money accounts in Ghana for the first time
services
2011: Faced with 2015: 29% of Ghanaian adults
20 2008: Zain launches Zap, disappointing growth in have used mobile money,
the country’s first mobile mobile money use, CGAP 17% have used it within the
money service, in works with Payments Systems past 90 days
partnership with several Directorate head Elly
commercial banks Ohene-Adu to facilitate a 2016: MTN and Fidelity Bank
dialogue between MNOs, launch Yello Save,
15 2010: MTN’s mobile banks and BoG on how to a mobile savings account for
money unit moved under improve the regulatory MTN wallet holders
supervision of Sales and framework
Distribution Director Eben 2017: MTN Mobile Money
Asante, unlocking new 2013: MTN launches a controls 74% of active
resources and adding new two-year investment mobile money accounts
10 KPIs on mobile money campaign designed to build
accounts for sales staff out its agent network and
encourage customer
awareness of mobile money
5
0
2012 2013 2014 2015 2016 2017
Percentage of Ghanian adults, using Mobile money customers
a registered mobile money account†
12 million customers
other
provider
10
39% active
customers
8
13% 6
4
MTN
2 active
customers
0
2014 2017 2012 2013 2014 2015 2016 2017
Ghana’s, Access Strand (2015) Portion of financial inclusion attributable to mobile money
MM and other formal non-bank: 8% Banked: 36% Other formal non-bank: 7%
Excluded: 25%
MM only: 7% Informal only: 17%
†Data represent use in the preceeding 12 months from year reported.
Sources: Bank of Ghana, MTN Ghana (timeline and marketshare chart); Global Findex (pct using mobile money)
19
By the mid-2000s, the Ghanaian government had Regulatory approach
renewed its commitment to extend the reach of
financial services to the country’s poor (Staschen Betting on the banks
2016). But sitting in his office at the Bank of Ghana
(BoG), Deputy Governor Madamudu Bawumia Seeking to get out ahead of new developments in
knew that the same old approaches to providing the payments space, BoG released Guidelines for
financial services would not be enough to achieve Branchless Banking in August 2008. The Guidelines
the government’s ambitious financial inclusion reflected BoG leadership’s preference for a
goals. Instead, Bawumia turned his attention to bank-led and bank-based approach to payments
the digitization of cash-based payments, which services, with only banks permitted to issue
he viewed as an opportunity to connect citizens electronic money and establish agent networks
to the formal financial system for the first time. (CGAP 2017). While many other countries outside
Betting on the potential of digital payments, of Sub-Saharan Africa have opted for bank-led
Bawumia decided to make new technologies electronic payments, Ghana’s decision differed
a centerpiece of the Central Bank’s financial sharply from the approaches taken by countries
inclusion strategy. like Kenya and Tanzania, each of which had allowed
nonbank actors like MNOs to issue e-money and
However, the mid-2000s were also a time of establish their own service offerings and agent
great uncertainty for the world’s central bankers. networks.
With mobile money still in its infancy, it remained
to be seen how this radically new approach to “Mobile money was viewed, at best, as a channel
payments would fit alongside existing card- for use only by banks and deposit-taking financial
based and bank-led payments solutions. Seeking institutions to reach unbanked segments of the
to better understand how other countries were population,” recalls Elly Ohene-Adu, director of
promoting payments digitization, Bawumia and Banking Services and Payment Systems Oversight
his colleagues organized a visit to Kenya in 2007 at BoG from 2010 to 2016. “MNOs were seen as
to observe the Safaricom M-PESA phenomenon agents making their platforms available to banks to
and see what lessons the Kenyan experience use” (Muthiora 2015).
might hold for Ghana’s approach to digital
payments. At the same time, BoG was pushing ahead with its
own digital payments solution—a biometric card
The delegation from BoG returned to Ghana that it had released through its subsidiary, the
convinced that Kenya’s regulatory approach was Ghana Interbank Payment and Settlement Systems
more cautionary tale than inspiration. Allowing Ltd (GhIPSS). The e-Zwich Smart Card was designed
nonbanks to participate directly in the provision to be an interoperable digital payments solution
of payments services struck the regulators as a that could be used by customers of any financial
high-risk gamble that would have potentially institution. “We thought, let’s do something
negative implications for the stability of Ghana’s that even the rural banks could participate in,
banking sector. And Kenya’s reliance on one something that didn’t need a contract with Visa
dominant private company (i.e., Safaricom) was or MasterCard,” explains Yoku Korsah, COO of
considered risky, especially given the government’s GhIPSS at the time (see Box 11).
commitment to extend the reach of financial
services to the most difficult-to-serve customers, The bank’s vision of digital payments interoperability
such as the poor and those living in rural areas. also influenced its approach to crafting the
These takeaways, and the decisions that they Guidelines for Branchless Banking. In addition to
would influence, would turn out to have enormous limiting participation to banks, BoG regulations
implications for Ghana’s trajectory to an inclusive mandated a “many-to-many” service model that
payments ecosystem. aimed at preventing exclusive partnerships between
20
MNOs and a single financial institution. This model Ashie was not alone in his struggles. At MTN, the
required any new mobile money service offering general manager of Mobile Money, Bruno Akpaka,
to be introduced by a consortium of at least three was facing his own problems as he attempted to
regulated banks (BoG 2008). build the MTN Mobile Money service that had
been launched in July 2009. Akpaka had secured
The intention behind these guidelines was to the partnership of nine separate banks. But as his
provide greater access and higher value for successor Eli Hini would later say, “Most of the
consumers through an open and interoperable banks sat back and did nothing.”
system driven by banks. But much to the chagrin of
the Central Bank, the new rules did not spur banks Worse still, because the MNOs were considered
to rush to invest in new mobile money services. agents of the banks under the Branchless Banking
Guidelines, they were unable to approach BoG
Early mobile money services directly to voice concerns or obtain approval for
struggle to gain traction the introduction of new products. According to
Hini, “Anything you needed to do, you had to
As he walked out of a meeting in Accra, Carl Ashie, speak to the nine banks, who then needed to speak
the head of M-Commerce at Ghanaian MNO Zain, with the Central Bank.”
looked to the launch of the country’s first mobile
money service with some trepidation. Under the Two years later, despite the entrance of the
2008 Guidelines, Zain was forced to introduce its country’s third mobile money service, Tigo Cash,
Zap mobile money product in partnership with use of mobile money among Ghanaians remained
several banks, including United Bank of Africa, low. By 2011, there were only about 100,000
Standard Chartered Bank, and Ecobank. Because active mobile money accounts in Ghana (CGAP
the banks owned the new service, Zain depended 2017), and the MNOs were becoming concerned
on them to ensure Zap’s success. “The banks that Ghana would never catch up to markets like
were supposed to recruit the agents, they were Kenya and Tanzania that were seeing explosive
supposed to promote the product,” explains Ashie. growth in the use of mobile money. “We were
But the banks would prove uninterested in making operating,” Ashie recalls. “But we were not
such investments. operating fully.”
Box 8. Unintentional effects of the 2008 Guidelines for Branchless Banking in Ghana
Despite good intentions and a desire to promote a managing agent networks; and developing,
more inclusive financial services industry, Ghana’s offering, and marketing products. They were
2008 Guidelines for Branchless Banking inadvertently primarily focused on holding customer float in a
created obstacles to the success of mobile money pooled account and providing passive support
deployments. By limiting the ownership of mobile in liquidity management to agents through their
money services to licensed banks, while also forcing branches.
these banks to partner with their competitors, several • Cost to MNOs. Although MNOs shouldered most
issues emerged: of investments and made key decisions, legally,
they had few rights. According to the regulations,
• Free Rider Problem. There was little incentive the products, customers, and agent networks were
for banks to make significant investments in the owned by partner banks.
branchless banking market if their competitors • Communications Gap. Since MNOs were not
would reap the benefits equally without making recognized financial services providers, they had
their own investments. no direct relationships with BoG and needed to go
• Passive Partner. The banks generally declined through their partner banks for every interaction
to assume any of the roles the regulations with the regulator. As a result, BoG was out of
envisaged, such as registering and serving touch with the needs and challenges of MNOs, who
customers; conducting agent due diligence and were driving the market.
Source: CGAP (2017).
21
A new beginning for mobile money realized that BoG needed to act. “I marched up to
the Governor and said, ‘This is the level of money
Ohene-Adu knew that she needed to act. As it out there that we are not regulating,’” Ohene-Adu
became apparent that uptake of mobile money in says, because MNOs had, in practice, taken over
Ghana was falling well below expectations, the head day-to-day operation of the mobile money services
of Banking Services and Payment Systems Oversight that were nominally under bank control. “And the
at BoG was determined to turn things around. moment I said that I got his attention, because I said,
“There were complaints, there were frictions in ‘If anything happens, Bank of Ghana will be faulted.’”
the market place,” Ohene-Adu remembers. So
when CGAP approached her in 2011 with ideas for With the approval of the governor, Ohene-Adu and
how the Central Bank could revise its regulatory her colleagues embarked on an ambitious effort to
approach, she was eager to hear its suggestions. rewrite BoG’s regulations on electronic money. The
Bank’s internal drafting committee began work on
While CGAP presented proposals for specific the new regulations in 2013, with CGAP providing
regulatory changes, its first recommendation was support through several rounds of drafting,
that Ohene-Adu and her colleagues meet directly stakeholder feedback, and revisions (CGAP 2017).
with the MNOs to get their input on how the Central
Bank could be more responsive to their needs. “We After more than a year of consulting and engaging
thought that it would be useful for the Central Bank with market participants, and convinced that they
to take a second look at the regulations and maybe had finally found a way to address the concerns
engage with the telcos and be able to understand of all stakeholders, Ohene-Adu and her team
what their issues are so that we could all sit down prepared to issue the new regulations in 2014. By
and address it,” says Ohene-Adu. November of that year, the new rules had been
approved by the Board of Governors, and Ohene-
With Ohene-Adu’s approval, CGAP organized a Adu looked forward to celebrating her hard-
workshop in December 2011 that included the fought victory. The regulations, which refrained
MNOs and Fidelity Bank and Ecobank—two banks from dictating a specific partnership model and
that had demonstrated a particularly high level of permitted nonbanks to be directly licensed by BoG,
interest in and commitment to developing DFS. were already being hailed as a best practice policy
Ohene-Adu recalls that the MNOs were clear framework for DFS (CGAP 2017). But as it turned
about what regulatory reforms would be needed out, one last fight stood between Ohene-Adu and
to change the course of mobile money in Ghana. the implementation of her vision.
They asked that BoG eliminate the bank-led
requirement and allow them to own and operate In December 2014, some banks decided to push
the payments services. To make the BoG aware of back against the pending regulations with a public
their demands, the MNOs drafted a white paper, campaign and private pressure on the Central Bank
“The Joint Position of the Telcos to the Bank of Governor. The head of one major commercial bank
Ghana,” and sent it to the Central Bank governors. was quoted in the media as warning that mobile
money would lead to chaos in the country’s financial
BoG governors (the governor and deputy governors) system: “Digital money is different. The minute
initially hesitated to embrace the recommendations you allow it to go independent, who controls it?
in the White Paper. Like all central bankers, they Which central bank is responsible for it?” he asked
were primarily concerned with ensuring financial pointedly (Klutse 2014).
sector stability, and the interests of nonfinancial
institutions like MNOs were simply not high on their Privately, the banks were also lobbying the
list of priorities. But when Ohene-Adu approached governors to quash the regulations. Bowing
the Governor in 2012 with statistics on the value of under the pressure, the governors decided to
money that was passing through the new services delay implementation—much to the chagrin of
under de facto control of the MNOs, he quickly Ohene-Adu and her supporters, who had already
22
published the new regulations on the BoG website. Mobile Money into one of Africa’s most successful
But shortly thereafter, at a meeting between the digital payments services. Drawing on his
Central Bank and the heads of Ghana’s banks’s, marketing expertise, Asante began by approving
Ohene-Adu decided to take a stand. “Look, if you a massive new advertising campaign called “MTN
had read the regulations and seen its contents, you Mobile Money Month,” which included messaging
would be speaking differently,” Ohene-Adu told designed to educate Ghanaians on what mobile
the heads of the country’s largest banks. money was and the opportunities it presented for
users (Modern Ghana 2013).
For months, the two sides continued to spar
over the regulatory changes. But Ohene-Adu The campaign did not go unnoticed by MTN’s
would eventually prevail. On 6 July 2015, the new competitors. “The ad campaign was huge. It gave
agent and e-money guidelines were finally issued everyone the idea that you could receive money
by the Central Bank, opening a new chapter in on your phone,” says Kwame Oppong, the former
Ghana’s efforts to extend financial services to the head of Tigo Cash. But he also acknowledges that
country’s financially excluded people. a marketing campaign was only part of the battle:
“When you had people going out explaining it, you
“This was what the telcos were waiting for,” Ohene- saw people trying to slip money into their phones.”
Adu explains. “So, they just spread their wings.”
Realizing that advertising would not be enough
Executive commitment to drive awareness of mobile money, Asante and
and investment Hini looked to agents as an important channel
for educating customers and driving greater use
In 2013, with discussions underway to revise the (see Box 9). “The agents who were initially doing
2008 Guidelines on Branchless Banking, Eli Hini the acquisition weren’t educating customers, but
at MTN Mobile Money sensed an opportunity. If they were earning commission on opening an
Ohene-Adu got her way at the Central Bank and the account,” Hini says.
proposed changes to the regulations were adopted,
Hini expected that the new framework would unlock To encourage agents to spend more time on
new opportunities for MTN to grow its mobile customer education, MTN revised its commission
money user base. Still, he knew that his team’s structure to place greater weight on customer
success would depend on securing significant transactions rather than account openings.
investment capital from his operating company. “If customers cashed in, agents would get a
commission. If customers used their wallet to
Hini sought to leverage a 2010 reorganization make a transaction, the agent would get more.
at MTN that had already increased the profile of And if customers continued to transact, the
the mobile money unit within the organization. agent would receive something further, up to the
Recognizing that the fledgling mobile money 4th transaction,” Hini explains.
service was struggling to gain traction,
management placed the mobile money team under The new commission structure, coupled with an
the supervision of Sales and Distribution Director aggressive campaign to recruit new agents, was
Eben Asante. The reorganization completely supported by a massive infusion of investment
changed how mobile money was managed at MTN. capital. Behind the scenes, Asante had been
New resources were made available to expand the working hard to convince the MTN Group to
agent network and advertising, and sales staff were approve the capital to underwrite his ambitious
able to access clear key performance indicators on strategy. Beginning in 2013, Asante secured an
new accounts opened. additional $2 million for investments in mobile
money. Funding doubled to $4 million the
Asante was a big believer in the potential of mobile following year. According to Hini, this infusion of
money, and he made it his mission to build MTN capital supported a two-fold increase in spending
23
Box 9. How MTN used OTC as a gateway to mobile money use
When MTN set out to drive greater use of its mobile out for it, people used it, and it helped them to
money service, most providers in Ghana had an understand the service better.”
intense aversion to OTC transactions. “For a long
If customers were visiting agents to conduct OTC
time, OTC was [considered] the devil,” recalls Kwame
transactions, MTN realized that it could also
Oppong, former head of Tigo Cash Ghana.
incentivize agents to educate these customers on how
But, in fact, OTC was perhaps the easiest way for to use their wallets to transact. So MTN began giving
customers to become familiar with mobile money. new customers GHC 5 (about $1.50) in their mobile
“We are in a market where there was already wallets, and agent commissions were restructured to
remittance behavior. People were predisposed to reward customer transactions rather than just account
understanding an OTC environment. But the idea of openings. With guidance from agents, many new
a wallet was not well understood,” says Oppong. customers would use the GHC 5 they received to
purchase airtime, which in turn became an important
Faced with the challenge of getting customers first step along the customer journey to using a
to understand how to transact using their phones, mobile wallet. Agents, who were now rewarded for
MTN’s leadership made a risky decision. Even as other wallet-based transactions made by new customers,
providers were trying to discourage OTC transactions, further discouraged customer OTC transactions by
for which they were forced to pay high commissions explaining that wallet transactions were significantly
to agents, MTN embrace these transactions as an less expensive. And over time, as customer behavior
opportunity to get customers to use its service. “We began to shift, MTN began to change its pricing
didn’t shy away from OTC,” Hini says. “People went structure to discourage OTC transactions.
on market activation and agent commissions aimed 20,000, while the volume of transactions performed
at motivating agents to educate customers. using mobile money went from 41 million to an
astounding 113 million over the same period
MTN’s investment paid off. Statistics showed that (see Figure 10) (BoG 2018).
beginning in 2013—two years before the new
e-money issuer and agent banking regulations went Competitive landscape
into effect—mobile money in Ghana had already
begun to turn a corner. Between 2013 and 2014, While MTN was moving full-steam ahead with
the number of active agents would double to over investments in mobile money, Tigo Cash and Airtel
Figure
Figure 10: Transaction
10. Transaction volume
Volume and and active
Active mobile
Mobile money
Agents, agents, in Ghana
in Ghana
1 billion transactions 200,000 active mobile money agents
0.8
150,000
0.6
100,000
0.4
50,000
0.2
0 0
2012 ‘13 ‘14 ‘15 ‘16 ‘17 2012 ‘13 ‘14 ‘15 ‘16 ‘17
Source: Bank of Ghana
Source: Bank of Ghana
24
Money (formerly Zap) held off on critical investments able to sustain their position in the years to come.
that were needed to drive growth of their mobile “MTN has invested a lot. They’ve been very, very
money efforts. Indian company Bharti Airtel had consistent and no one can take that away from
purchased Zain’s Ghana operations in 2011, and them,” concedes Carl Ashie, now M-Commerce
the change in ownership was accompanied by manager at Vodafone. But he adds, “There’s still a
declining investment in the mobile money business. lot of opportunity in the market for all of us.”
Meanwhile, Oppong had taken over as head of For Oppong, MTN’s market share is only part of the
Tigo Cash and was facing similar challenges. With story. He argues that having multiple players in the
regulatory changes pending and evidence of an market has been good for customers, even if market
uptick in mobile money use among Ghanaians, Tigo shares are lopsided: “Competition allowed us to
management decided against abandoning their deliver value to the customer. There was so much
offering altogether. However, rather than pursue testing in the market, Tigo would try something,
investment and expansion, Tigo’s leadership MTN would replicate it, and vice versa.”
focused on demonstrating profitability.
He adds that MTN’s example has inspired other
As both Tigo and Airtel reduced investment providers to redouble their own mobile money
and reoriented their efforts toward achieving efforts, citing the influence of Eben Asante, who
profitability, MTN continued to consolidate would become CEO of MTN Ghana in 2015 and was
market share. But by 2015, the market was also later promoted to vice president at MTN Group:
beginning to evolve. In 2015, after years of “When Eben spoke about mobile money, you could
debating whether to introduce a mobile money have sworn that he was a mobile money head.”
product, Vodafone finally launched its Vodafone
Cash service. At the same time, Fidelity Bank and Regardless, MTN will continue to face challenges
Ecobank began introducing their own products to its dominance in the mobile money space. In
after years of working primarily through MNOs October 2017, Airtel and Tigo Ghana merged to
(see Box 10). create Airtel Tigo, the second largest MNO in the
country (Reuters 2017). At the same time, BoG
MTN remains the dominant player in Ghana with was in the process of connecting mobile money
an estimated 75 percent market share in 2017. networks to its interbank switch, with the hope
But there are conflicting opinions about the of enabling full cross-platform interoperability for
impact of its dominance—and whether it will be the first time.
Box 10. Banks get into the mobile business
While some banks actively resisted the entry of MNOs Mobile Money customers to invest in Ghanaian
into the financial services space, Ecobank realized treasury bills through its TBill4All service.
early on that mobile would be the wave of the future. For its part, Fidelity Bank introduced a card-based
“This is going to be the channel for the consumer to agent-banking product, and has partnered with MTN
access banking services,” Owureku Asare, regional to introduce the Y’ello Save mobile savings product.
head, Consumer Distribution remembers of the “Banks are now challenging MNOs in the provision
mindset of Ecobank leadership at the time. of innovative digital products,” explains Will Derban,
In 2010, Ecobank partnered with Airtel Money to director of Strategic Partnerships and E-Banking at
pilot a mobile savings product called mSave, and Fidelity.
built on that experience with a new mobile savings Have the banks begun to change their approach to
product called Express Account, which is accessible MFS? Asare thinks so. “The banks that had concerns
from any mobile wallet and currently has over about the proposed guidelines, gradually you see
100,000 account holders. It also partnered with mVisa them now playing significant roles within the MFS
to allow customers to pay for goods and services using ecosystem,” says Asare. “So clearly, sleeping banks
their mobile phones and funds from their Ecobank have woken up. So, there is keen competition within
accounts. And in a first, Ecobank is allowing MTN the banks as well.”
25
Interconnected services required any new service to include at least three
banks (and in the case of MTN Mobile Money, a
Efforts to create payments interoperability in Ghana total of nine). At the time, the Central Bank argued
date back to 2007, when the Central Bank made that “this model offers maximum connectivity and
the ability to transact with customers of various hence maximum outreach and is closer to the
financial institutions a centerpiece of its vision for desired situation where all banks and all telcos
DFS in the country. That year, BoG established should be able to entertain each other’s customers”
GhIPSS, an independent entity that would “migrate (McKay 2011). But as Ohene-Adu argues, this
Ghana into an electronic payment community as approach belied a poor understanding of what
part of efforts to modernise the country’s payment interoperability really meant: “[N]ow we know that
system” (GhIPSS 2017). In addition to establishing [interoperability] involves much more than even
a national switch for ATMs called GhLink, GhIPSS association. At the time, it was all about being
was tasked with implementing a new biometric associated, being in a group—many-to-many.”
card-based payments solution, called e-Zwich
Smartcard, that could be connected to any bank Even as the Central Bank introduced a new mandate
account and used to make payments (see Box 11). to interconnect, some in Ghana argue that the country
had already achieved functional interoperability with
The government’s commitment to interoperability the help of aggregators like Nsano, which facilitates
was also evident in its decision to include a “many- wallet-to-wallet transactions across networks (see
to-many” requirement in the 2008 Guidelines on Box 12). “Today, people can actually send money
Branchless Banking, which prevented exclusive across networks,” says Ashie from Vodafone, citing
partnerships between banks and MNOs and emerging third-party payments services.
Box 11. The e-Zwich smart card signals a focus on payments interoperability
At a time when few central banks were contemplating their customers and deploy e-Zwich POS devices to
true payments system interoperability, BoG wanted to all branches and outlets. All existing ATMs and POS
ensure that the country’s electronic payments systems devices had to be upgraded or replaced to be eZwich
were ready for the future. In 2007, before the full compatible. This required a hefty investment by banks
scope of the mobile payments revolution had come and some complained that the business model did
into focus, BoG decided to bet on interoperable, card- not work in their favor. Most banks complied with
based payments with its e-Zwich Smart Card. only the bare minimum of the requirements or chose
to ignore them altogether and pay a fine. Over time,
“In 2007, the Bank of Ghana had determined that
as mobile payments became more prevalent and
electronic was the way to go,” Yoku Korsah, COO
GhIPSS struggled to convince participating banks to
of GhIPSS at the time, recalls. “What was the best
acquire merchants, e-Zwich card use remained flat.
way to promote electronic payments? To promote
In the first quarter of 2013, there was an estimated
alternatives to cash, you needed a solution that was
GHC 14 million per month being transacted using
easy to use across the country.”
e-Zwich—an amount that increased to only about
e-Zwich is a “load and spend” card that functions GHC 17 million by the third quarter of 2015.
as a wallet, allowing users to deposit cash at bank
There also have been concerns that e-Zwich is
branches in exchange for e-money stored on the card.
creating friction in the market by competing with
Users can also transfer funds to or from their linked
private actors that would like to introduce their own
bank accounts using a POS terminal or ATM. Once
payments solutions. Moreover, the government could
users have a balance on their card, they can use the
be viewed as having a conflict of interest in its role as
card to pay for goods or services at merchants who
both a regulator and provider of payments services.
have an e-Zwich-compatible POS device. The card
“What it signaled was that the Bank of Ghana was
uses biometrics to verify identity—users scan their
getting into an area where a lot of independents
fingerprint to authorize transactions.
would have liked to play,” Korsah posits. “That was
To prepare for the card’s launch, BoG mandated that probably the biggest resistance factor that I could
all deposit-taking institutions issue e-Zwich cards to identify.”
Source: GhIPSS (2017).
26
customer use of the services, but there were
Box 12. Nsano facilitates mobile money indications that businesses were also increasingly
interoperability in Ghana
using mobile money services to facilitate payments
In 2016, payments aggregator Nsano introduced
(see Figure 11). The big question was where the
a product called MOVE, which allows Ghanaians
to send money from their mobile wallets to a market would move next.
wallet-holder on any network. By simply dialing a
shortcode, customers of any mobile network can
“The first stage was really fighting for legitimacy
initiate cross-network transactions for a small fee.
and for a foothold,” Oppong, former head of
“Interoperability is not complex. We’ve already
Tigo Cash, explains. “Now we’re at a stage where
achieved it,” asserts Nsano CEO Kofi Owusu-Nhyira.
the focus has to be on the quality of access that
To achieve this, Nsano has negotiated pricing
we’re creating.”
with individual mobile money providers. It
charges customers anywhere from 1.5 percent to
2.5 percent per transaction, depending on their Already, a range of new products were being rolled
provider, and the MNOs are paid a portion of out to customers, from mobile-wallet-connected
this. Owusu-Nhyira hopes that he eventually can
savings accounts like Y’ello Save, to investment
bring the price down to just 1 percent for each
transaction. products such as TBill4All. PAYGo solar providers
like PEG Africa offered customers the ability to
Looking forward, Owusu-Nhyira is cautiously
optimistic. He notes that MOVE recently reached pay for solar energy using their mobile wallets
a milestone of over GHC 1 million in transactions (see Box 13). And the current head of BoG’s
processed using the service, and to the company Payments Systems Department, Settor Kwabla
recently introduced the ability to transfer between
mobile wallets and bank accounts. Amediku, says that the BoG’s recent decision to
relax restictions on the use of airtime and mobile
money for payment of insurance premiums has
“It’s already happening,” adds Korsah, former led to increased interest in the development of
COO of GhIPSS. But Korsah also wonders if microinsurance products. “The next three years are
interoperability—whether achieved through a going to be amazing!” exclaims Amediku.
government switch and mandate or through
third-party providers—will be enough to chip away Today, Ghanaian payments providers see a major
at MTN’s dominance of the digital payments space: opportunity to expand the use of mobile money
“MTN is dominant. Will the interoperability game for payments beyond P2P. Hini says that MTN
change that? It’s a big question.” Mobile Money is increasingly focusing on driving
the use of mobile money for merchant payments.
Compelling use cases “Investment in technology to enhance experience
and merchant acquisition, that’s the phase that
In reviewing the impact of DFS in Ghana, mobile we’re in now,” says Hini. “My CEO says, ‘Make
money leaders noticed that use of the services it as close as possible, or actually better than
was evolving. P2P transactions were still driving cash.’”
Figure 11: E-money transactions in Ghana, by type (2015)
Figure 11. E-money Transactions in Ghana, by Type (2015)
B2B Cash In Cash Out P2P Other
Volume,
8% 31% 23% 9% 29%
by type
Value,
34% 31% 21% 8% 6%
by type
Source: Bank of Ghana
Source: Bank of Ghana
27
impose interoperability will lead to more value for
Box 13. PEG Africa uses mobile money to consumers remains to be seen. But Ohene-Adu
deliver off-grid energy
thinks that the development bodes well for the
As mobile money adoption has increased in Ghana,
future of digital payments in Ghana: “I think that
a new class of provider is leveraging payments
services to deliver energy to Ghanaians who are it’s turning out well, and if market actors engage
excluded from the country’s electricity grid. PEG properly it should go smoothly.”
Africa, Ghana’s largest PAYGo energy provider
offers customers solar power kits on credit, which
customers pay off in small installments using their Meanwhile, hints of a transformation in Ghanaian
mobile wallets. DFS belie MTN’s commanding share of active
The solar kits sold by PEG Africa allow customers mobile money accounts. From aggregators to
to power a few lightbulbs, charge their phones, FinTechs, there are increasing signs that the next
and listen to the radio. Customers make a modest wave of product innovation will be driven by new
down payment before receiving the solar kit, and
players riding on the payments rails built by mobile
then continue to pay each month over the course of
the year. Once customers have finished paying back money providers like MTN. Additionally, the Airtel
the loan, they own the kit. Providers face little risk in and Tigo merger and aggressive moves by recent
making the loans because they can shut off power if entrant Vodafone to capture market share indicate
a customer is late with a payment or defaults.
that the future may hold more and different types
In 2016, PEG Africa, which has a licensing of competition. It is unknown if this will drive
partnership with East African PAYGO solar
greater value for customers.
company M-KOPA, had 29 service centers, 200-plus
employees, and 14,000 customers in Ghana.
Sales of the home energy product are growing at Another open question is, what will become the
approximately 20 percent per month.
next big use case after P2P, and who is best
positioned to lead the market into a cash-lite
Source: Fleming (2016).
future? For some Ghanaians, such a future may be
about more than just mobile money. As Ohene-Adu
Hini sees a big opportunity in the digitization of says, innovation driven by tech-savvy young
government payments. “E-governance and the Ghanaians will be what ultimately transitions the
digitization of payments for government services country from cash to digital payments:
will be key,” he says. “Government is a big
spender, so if payments can be digitized, it brings I see a lot of young Ghanaians who are really
along the customer and helps everyone to have a interested in making these payments work.
role to play.” I can see the passion and the drive there. They
are like “How can I make this work better?
Looking ahead I’m not happy with just sitting there and saying
this is how we do things. How can we take
With mobile money use having tripled between this thing a step forward?” So, the youth give
2014 and 2017 (Demirgüç-Kunt et al. 2018), the me hope.
future of DFS in Ghana looks bright. Still, several
challenges remain, including ongoing efforts to Conclusion: Understanding
implement payments interoperability, struggles to the Tanzania and Ghana
shift account use beyond P2P payments, and the experiences
implications of MTN’s dominance of the mobile
money space. The Tanzanian and Ghanaian experiences hold
important lessons for other countries that want
As of May 2018, Ghana implemented mobile to develop inclusive payments ecosystems.
money interoperability, with each of the country’s Looking across the two markets, there are both
providers connecting to the GHLink switch similarities and differences in the approaches taken
currently used to connect the country’s ATMs. by policy makers and providers, with significant
Whether the decision on the part of BoG to implications for how DFS have evolved. But overall,
28
these country experiences underscore the time, BigTech 19 enter the space, regulators need to
effort, and patience required for DFS to succeed in continue to collaborate closely with the growing
an African context. While Tanzania and Ghana are range of providers to evolve and adapt their
considered among the most successful DFS markets approaches. Central banks will need to look
not only in Sub-Saharan Africa, but globally, this beyond financial institutions like commercial banks
success did not happen overnight. It took nearly a with which they have traditionally worked and to
decade of work by policy makers, funders, and the engage with new players who are increasingly
private sector to drive uptake and use of DFS— responsible for innovations in financial services
work that is still in progress today. for the poor. Furthermore, policy makers should
ensure that their approaches to risk mitigation are
Table 1 provides a brief look at each country’s proportionate to the risks.
experience. And the following section provides
analysis and addresses how the five components The rapidly evolving nature of DFS requires even
of inclusive payments ecosystems can contribute greater capacity on the part of regulators—
to greater financial inclusion through customer and dealing with these uncharted waters calls
adoption and use of DFS. for approaches that allow for learning and
experimentation. One option is to use regulatory
Regulatory approach sandboxes, a type of test-and-learn approach that
uses a controlled environment to assess the impact
An effective regulatory approach (defined as and feasibility of untested regulations before they
enabling regulations and/or a regulator that are implemented. 20 Policy makers can also look
knows how to effectively engage with industry) to emerging regulatory technologies (RegTech)
is the foundational component of an inclusive that offer the tools necessary to oversee a rapidly
payments ecosystem. While CGAP has identified changing space.21
a set of regulatory enablers that can contribute
to successful digital ecosystems (see Box 3), the Executive commitment
Tanzania and Ghana regulatory experiences also and investment
demonstrate the need for an enabling regulator to
drive DFS development. In Tanzania, the decision While an enabling regulatory approach is the first
to take a deliberate test-and-learn approach is step, Tanzania and Ghana demonstrate how good
credited with driving the explosive growth in DFS policy is not enough on its own to build inclusive
over the past decade. On the other hand, Ghana payments ecosystems. Vodacom Tanzania and MTN
initially attempted to impose well-intentioned Ghana demonstrated the importance of spending
regulations without input from industry or a full on infrastructure and customer awareness—
understanding of the evolving DFS space. It suggesting that DFS success is largely a function
then consulted providers and experts that have of provider investment.
experience from other markets to revise its
approach. Overall, the two cases demonstrate that, Mobile money is rarely profitable in early years.
while specific regulations can indeed be harmful or GSMA estimates that the average deployment
beneficial, the most important factor is a regulator does not begin to see modest, positive margins
that listens to industry and provides space for until years 4–5 (see Box 4). With major investments
innovation. required to spur adoption and use, senior
leadership needs to believe in the product and its
As the financial services industry continues to potential—while also providing space to incur early
develop and new players like FinTechs and losses. Vodacom’s Meza in Tanzania and MTN’s
19 BigTech refers to major technology platforms like Facebook, Google, WhatsApp, and Alibaba, among others.
20 For more information on regulatory sandboxes, see Jenik (2017).
21 For more information on RegTech, see Zmitrowicz (2017).
29
Table 1. Lessons from Tanzania and Ghana for developing inclusive payment ecosystems
Key Components Tanzania Experience Ghana Experience Lessons
Regulatory BoT leadership understood The 2008 Guidelines DFS growth is strongly aided
Approach the importance of innovation imposed strict rules and by policy makers that keep an
in the delivery of financial requirements early on, open mind when approaching
services and opted for a before the industry had regulation, allowing new
“test-and-learn” approach a chance to develop. players to participate in the
with rigorous due diligence This inadvertently stifled provision of financial services
procedures to regulate innovation and investment. and providing space for
the nascent mobile money When Elly Ohene-Adu’s experimentation. Risk
space. This provided space effort to revise the mitigation strategies should
for innovation, even as BoT guidelines in consultation be proportionate in a way
engaged with providers and with industry was successful, that facilitates innovation
learned from the experience BoG opened the door to without jeopardizing financial
while crafting permanent explosive growth in the stability. Although effective
regulations. mobile money space. regulation is very important,
a supportive regulatory
approach, including ongoing
dialogue with industry, may
be just as important. Strong
leadership is key, and policy
makers should engage with
industry and develop a deep
understanding of the space
when crafting regulations.
Executive Rene Meza’s visionary MTN Managing Director The investment required by
Commitment and leadership helped Vodacom Eben Asante believed in providers to build extensive
Investment make significant early mobile money and made agent networks and drive
investments in building an investment a priority, even as customer awareness should
agent network and raising other providers scaled back not be underestimated.
customer awareness of or considered dropping out While achieving profitability
mobile money. These early in the face of early struggles. can take several years,
investments, supported by MTN’s investments in agent these investments set the
BMGF, set the stage for networks and customer foundation for a successful
long-term industry growth. awareness created a strong market by solving problems
foundation for DFS success related to use cases,
in Ghana. customer education, and
agent recruitment/training.
Senior executive buy-in
and support are essential
to prioritizing DFS and
sustaining investment in the
face of early losses.
Competitive Tanzania has a highly MTN has been the dominant As the Ghanaian experience
Landscape competitive DFS market provider from the early days (and those of other markets
that includes several of mobile money and has like Kenya and Zimbabwe)
mobile money providers, increased its market share in demonstrate, competition
aggregators, banks, MFIs, recent years. However, this is not essential during
and FinTechs. Competition has not seemed to impede early phases of market
has driven provider the growth of DFS in Ghana. development, and a dominant
investments and innovation, New players like FinTechs provider with significant
and has led to a range of and banks promise to capital may be helpful to more
new use cases. increase competition in the quickly experience network
years to come. effects and incentivize
provider investment and
innovation. But as markets
mature, competition becomes
increasingly important for
driving customer value, while
“coopetition” among MNOs
and players like banks, MFIs,
aggregators, and FinTechs
leads to a range of new use
cases that ride on DFS rails.
(continued)
30
Table 1. Lessons from Tanzania and Ghana for developing inclusive payment ecosystems
(continued)
Key Components Tanzania Experience Ghana Experience Lessons
Interconnected Interoperability was achieved Ghana attempted to impose Interoperability is important,
Services through agreements interoperability early on with but is best pursued in
between providers on “many-to-many” regulations, established markets where
common rules and bilateral but this ended up hindering providers are looking for
connections between investment. More recently, growth opportunities.
platforms. The growth BoG mandated that all Engagement with industry
in interoperable P2P providers connect to a is important, and regulators
transactions indicates that central switch, effectively should be cautious when
interoperability is on the introducing mobile money mandating interoperability
right trajectory. The industry- interoperability. Key to the so as not to hinder early
led process is a rare example success of this initiative will investment. Generally,
of successful mobile money be involving the important market forces should guide
interoperability. stakeholders and ensuring when interoperability
that the business model happens and who takes part,
incentivizes participation. except in situations where
abusive practice forces
regulators to intervene.
Stakeholders should
focus on governance and
business rules, as well as the
technical implementation of
connections.
Compelling P2P remains the dominant MTN Ghana has activity P2P and airtime purchases
Use Cases use case, but the success of rates of over 70%, putting remain the main drivers
new products like M-Pawa it in the highest bracket of DFS, but there are
and the emergence of globally. It will be able to indications that use cases
FinTechs offering products continue this momentum like savings, credit, bill
that ride on the mobile only by diversifying its payments, merchant
money rails suggests that offerings to customers. payments, and government
diverse use cases will Although P2P remains payments become more
become more important the dominant use case in important as markets
over time. Ghana, the success of new mature. Globally, the
products like TBill4All and providers with the highest
the emergence of FinTechs activity rates are integrated
offering products that ride with seven banks, 95 billers,
on the mobile money rails and 6,500 merchants on
suggests that diverse use average.
cases will become more
important over time.
Asante in Ghana show how executive commitment grant to Vodacom in 2011. This grant was critical
to investing in and prioritizing mobile money can to spurring investment at a time when there was
lead to market success over the long term. little evidence that mobile money could achieve
profitability (see Box 14). Once a provider has
In markets where no infrastructure exists made these early investments, other providers in
to facilitate digital payments and where the market can benefit—whether through sharing
understanding of DFS remains limited, there is of agents or increased awareness of DFS among
a need for a first mover to take on the burden the population.
of building agent networks and driving greater
customer awareness. These early investments by Country context is also important. For MNOs in
providers are what end up setting the foundation African nations like Tanzania and Ghana, launching
for a successful market, by solving problems the first mobile money services can be particularly
related to use cases, customer education, and burdensome. With little to no existing digital
agent recruitment and training. Donors can play payments infrastructure, these providers must build
a role in supporting MNOs in the early stages of this infrastructure themselves, and they need to
market development, as demonstrated by BMGF’s develop solutions for managing cash, educating
31
Box 14. The role of development partners in driving market development
In Tanzania and Ghana, development partners CGAP engaged with policy makers to offer pragmatic
played an important role in advancing digital guidance on best practices for regulating the nascent
financial inclusion through targeted engagement mobile money space. The result was a complete
with regulators and providers. BMGF’s grant, which course reversal by regulators at BoG, which spurred
was meant to spur investment in agent infrastructure provider investments in mobile money and led Ghana
and customer awareness, to Vodacom Tanzania in to become one of the most successful markets in
2011 was the driving force behind the expansion of Africa.
the market infrastructure that eventually became
Overall, these two experiences highlight the
the backbone for the growth of mobile money
importance of development partners enabling smart
in the country. Likewise, IFC’s role (funded by BMGF)
decisions by key market actors. They also point to
in convening mobile money providers in Tanzania
an approach that allows for these market actors to
is credited with an unprecedented agreement on
lead efforts and take ownership, rather than have
interoperability. Both funders opted for a market-led
funders dictate approaches. In both country cases,
approach, in which their involvement was designed to
this approach required development partners to be
enable providers to make smart decisions that ended
patient as they waited nearly a decade for their efforts
up benefiting the market as a whole.
to bear fruit. When coupled with the lessons distilled
Ghana’s experience yields similar insights on the role from these country cases, this suggests that there are
of development partners. Faced with a regulatory concrete ways in which development partners can
approach that was stifling market development, promote successful market development.
potential customers, engaging with and educating for market position, each country experience points
regulators, and more. to the positive benefits of greater competition. For
example, providers in Tanzania and Ghana credited
The rise of government-led efforts like India Stack, their competitors with helping to inspire innovative
which includes a centralized system for customer approaches to serving customers, while providers
identification and payments routing, may affect in Tanzania consistently cited competition in the
how countries approach DFS development in the GSM space as an important factor behind their
future. 22
By making digital financial infrastructure decisions to invest in mobile money networks. In
a shared public good, such approaches can the end, innovations and investments motivated by
relieve some of the pressure on providers to a competitive market landscape benefit customers
make significant investments for the benefit of the and providers alike.
broader market. But even in countries that opt
for such a government-led approach, providers Because Tanzania is a more mature market, new
will need to educate customers and create access developments there can offer insight into the
points for their services. importance of competition. As the Tanzanian
market has become more saturated, there are
Competitive landscape signs that providers are moving their offerings
further down-market, with new entrants like
When it comes to competition in the DFS market, Halotel pursuing a strategy to target rural and
Tanzania and Ghana both demonstrate the value poor customers. With growth in the number of
of a diverse provider landscape. It is unclear new accounts beginning to slow, questions remain
whether competition has any major effect on the as to whether competition for customers will drive
success of DFS during the early years of market new use cases, lower prices, and expanded access.
development—in both cases, a single player was
responsible for big initial investments that drove Maturing markets like Tanzania and Ghana are
early adoption. However, as inclusive payments expanding the very definition of competition in
ecosystems mature and several providers jockey the DFS space. As the rails of an inclusive payment
22
For more information on India Stack, see Raman and Chen (2017).
32
ecosystem are built, the focus of competition industry is important, and regulators should be
broadens to include businesses such as aggregators, cautious when mandating interoperability so
FinTechs, PAYGo companies, banks, and MFIs—all as not to hinder early investment. Stakeholders
of which are offering products and services that need to focus on governance and business rules—
ride on the rails established by mobile money as was the case in the year-long negotiations
providers. As the space becomes increasingly between providers in Tanzania—and not just the
crowded, both Tanzania and Ghana show early technical implementation, which is currently the
indications that the future of competition in DFS overwhelming focus in Ghana. As both markets
will move beyond mobile money services to the use continue to mature, it will be important to monitor
cases they enable. the Tanzanian and Ghanaian experiences in the
years to come to fully understand the impact of
Interconnected services interoperability on DFS.
Because neither Tanzania nor Ghana implemented Compelling use cases
full interoperability during the early years of DFS
development, it is difficult to draw hard conclusions In both Tanzania and Ghana, the ability to send
about the importance of interconnected services and receive P2P payments was what convinced
to DFS success. However, emerging data from customers to start using mobile money, and
Tanzania indicate that interoperability has been it remains the predominant use case. Hence,
important in driving greater value for customers who compelling use cases such as P2P are crucial to
are increasingly taking advantage of their newfound early market development, because customers
ability to transact across networks, while helping need a convincing reason to use the products and
smaller providers gain a foothold in the market. services on offer.
Furthermore, the emergence of third-party providers
that facilitate cross-network transactions like Nsano However, it remains unclear how new products
in Ghana and the decision among providers in and services will affect the use of DFS as markets
Tanzania to connect their platforms bilaterally mature. Customers today have more reasons than
provide further evidence that there is a greater ever to use DFS, and the success of M-Pawa in
appetite for interoperability as markets mature. Tanzania and the TBill4All product in Ghana
indicates that customers are becoming more aware
Ghana’s decision to impose a form of of how to use their mobile wallets to do more than
interoperability (i.e., many-to-many regulations) in just P2P. Mobile money and digital payments, more
2008 before mobile money services had launched broadly, are increasingly being used to pay bills,
offers evidence that mandating interoperability too facilitate new service categories like PAYGO solar,
early can backfire and hinder investment among and pay merchants.
providers who fear that their efforts would benefit
competitors. The difference in the collaborative Conversations with providers in both countries
process pursued by Tanzania, where industry was indicate that digitizing government payments and
a key player in developing the approach and rules driving greater use of digital payments at merchant
for interoperability, and the Ghanaian decision to points of sale are central to their strategies moving
impose interoperability early on, demonstrates forward. The sheer volumes of government payments,
the importance of engaging with providers to much of which are currently made in cash, means
implement interoperability. that digitizing these payments would dramatically
increase the use of DFS. And digitizing merchant
Overall, the main message that emerges from payments, which are more frequent than remittances
a review of both country experiences is that or bill payments, promises to drive up activity rates
interoperability is important, but it is best and convince merchants themselves to conduct
pursued in mature markets. Engagement with higher value transactions with suppliers digitally.
33
References Corporate Digest. 2014. “Tanzania’s Voice, Data Rates
Still Low.” Corporate Digest. http://www.corporate
-digest.com/index.php/tanzanias-voice-data-rates-still-low
Almazan, Mireya, and Nicolas Vonthron. 2014.
“Mobile Money Profitability: A Digital Ecosystem
Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer,
to Drive Healthy Margins.” London: GSMA. https://
Peter Van Oudheusden. 2015. “The Global Findex
www.gsma.com/mobilefordevelopment/wp-content
Database 2014: Measuring Financial Inclusion around the
/uploads/2015/11/2014_Mobile-money-profitability-A
World.” Policy Research Working Paper; no. WPS 7255.
-digital-ecosystem-to-drive-healthy-margins.pdf
Washington, D.C.: World Bank Group. http://documents
.worldbank.org/curated/en/187761468179367706
Arabéhéty, Pablo García, Greg Chen, William Cook, and /The-Global-Findex-Database-2014-measuring-financial
Claudia McKay. 2016. “Digital Finance Interoperability & -inclusion-around-the-worldGSMA State of the Industry
Financial Inclusion.” Blog post, 20 December. http://www Report 2017
.cgap.org/publications/digital-finance-interoperability
-financial-inclusion
Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer,
Saniya Ansar, and Jake Hess. 2018. “The Global Findex
BoG (Bank of Ghana). 2008. Guidelines for Branchless Database 2017: Measuring Financial Inclusion and the
Banking. Notice No. BG/GOV/SEC/2008/21. Accra: Fintech Revolution.” Washington, D.C.: World Bank.
Bank of Ghana. https://www.bog.gov.gh/privatecontent
/Monetary_Policy/2008/August/regulatory%20
di Castri, Simone, and Laura Gidvani. 2014. “Enabling
framework%20for%20branchless%20banking.pdf
Mobile Money Policies in Tanzania: A ‘Test and Learn’
Approach to Enabling Market-Led Digital Financial
———. 2018. Payment Systems Statistics. Dar es
Services.” London: GSMA. https://www.gsma.com
Salaam: Government of Tanzania. https://bog.gov.gh
/mobilefordevelopment/wp-content/uploads/2014/03
/payment-systems/payment-systems-statistics
/Tanzania-Enabling-Mobile-Money-Policies.pdf
BoT (Bank of Tanzania). 2006. The Bank of Tanzania
Fleming, Payton. 2016. “Ghana: Africa’s Frontier in
Act, 2006. Act Supplement to the Special Gazette of
Pay-as-You-Go Solar Charging.” Energy and Carbon ,
the United Republic of Tanzania, No. 3, Vol. 87, 8 June.
11 August. http://energyandcarbon.com/ghana-africas
Dar es Salaam: Government of Tanzania. http://www.bot
-frontier-pay-go-solar-charging/
.go.tz/AboutBOT/BOTAct2006.pdf
FSDT (Financial Sector Deepening Tanzania). 2010.
———. 2007. Electronic Payment Schemes Guidelines.
“FinScope Tanzania 2009.” Dar es Salaam: FSDT. http://www
May. Dar es Salaam: Government of Tanzania. https://
.fsdt.or.tz/finscope/
www.bot.go.tz/paymentsystem/Docs/e_Schemes%20
Guidelines%20June%202007.pdf
———. 2014. “FinScope Tanzania 2013.” Dar es Salaam:
FSDT. http://www.fsdt.or.tz/finscope/
———. 2017. Payment Systems Statistics: Mobile
Transactions. Dar es Salaam: Government of Tanzania.
https://www.bot.go.tz/PaymentSystem/paymentSystem ———. 2018. “FinScope Tanzania 2017.” Dar es Salaam:
.asp#Overview FSDT. http://www.fsdt.or.tz/finscope/
Camner, Gunnar. 2013. “In Indonesia, Operators Choose GhIPSS (Ghana Interbank Payments and Settlement
Interoperability and Collaboration.” GSMA blog post, Systems Limited). 2017. “Ghana Automated Clearing
23 May. https://www.gsma.com/mobilefordevelopment House—GACH.” 23 March. http://www.ghipss.net
/programme/mobile-money/in-indonesia-operators /component/content/article/27-product-main/26-ghana
-choose-interoperability-and-collaboration/ -automated-clearing-house-gach
CGAP. 2017. “Our Impact: Supporting Ghana’s Inclusive GSMA. 2017. “GSMA State of the Industry Report on
Payment Ecosystem.” Washington, D.C.: CGAP. Mobile Money: Decade Edition 2006–2016.” London:
GSMA. https://www.gsma.com/mobilefordevelopment
Citizen, The. 2017. “Halotel Reveals Secret Behind Telecom /wp-content/uploads/2017/03/GSMA_State-of-the
Firm’s Fast Expansion.” The Citizen, 5 June. http://www -Industry-Report-on-Mobile-Money_2016.pdf
.thecitizen.co.tz/News/Business/Halotel-reveals-secret
-behind-telecom-firm-s-fast-expansion/1840414 ———. “2017 State of the Industry Report on Mobile
-3956122-h7rt4f/index.html Money.” London: GSMA. https://www.gsma.com
/mobilefordevelopment/sotir/
Cook, William. 2017. “The Secret Life of Mobile Money
Pricing.” Blog post, 28 August. http://www.cgap.org InterMedia. 2013. “Mobile Money, a Path to Financial
/blog/secret-life-mobile-money-pricing Inclusion: Findings from the Tanzania Mobile Money
Tracker Study.” Washington, D.C.: InterMedia. http://www
———. 2018. “Interoperability in East Africa: Dispatches .intermedia.org/wp-content/uploads/YearEndReport
from the Home of Mobile Money.” Washington, D.C: -Tanzania-Mobile-Money.pdf
CGAP. Slide deck. http://www.cgap.org/sites/default/
files/Interoperability-in-East-Africa-Dispatches-from-the- ———. “Financial Inclusion Insights Ghana.” Washington,
Home-of-Mobile-Money.pdf D.C.: InterMedia. http://finclusion.org/reports/#ghana
34
Jenik, Ivo. 2017. “Regulatory Sandboxes: Potential for Nkwame, Marc. 2016. “TASAF Clients Set to Receive
Financial Inclusion?” Blog post, 17 August. http://www.cgap Money Via Mobile Phones.” Tanzania Daily News, 23 May.
.org/blog/regulatory-sandboxes-potential-financial-inclusion http://allafrica.com/stories/201605231458.html
Klutse, Felix Dela. 2014. “Mobile Banking is Dangerous: Raman, Anand, and Greg Chen. 2017. “Should Other
CalBank Boss.” Peace FM Online, 1 December. http:// Countries Build Their Own India Stack?” Blog post, 6 April.
www.peacefmonline.com/pages/business/finance http://www.cgap.org/blog/should-other-countries-build
/201412/224352.php -their-own-india-stack
Koblanc, Anna. 2015. “Acheiving Interoperability in Reuters. 2017. “Bharti Airtel and Tigo Merge in Ghana
Mobile Financial Services: A Tanzania Case Study.“ to Form AirtelTigo.” Reuters, 17 November. https://
Washington, D.C.: International Finance Corporation. www.reuters.com/article/us-tigo-m-a-bharti-airtel-ghana
https://www.ifc.org/wps/wcm/connect/8d518d00479 /bharti-airtel-and-tigo-merge-in-ghana-to-form-airteltigo
9ebf1bb8fff299ede9589/IFC+Tanzania+Case+study+ -idUSKBN1DE1HE
10_03_2015.pdf?MOD=AJPERES
Selcom, n.d. “Selcom Card.” https://www.selcom.net
Lyomo, Henry. 2016. “Tanzania Has Africa’s Lowest /selcom-card
Mobile Data Cost.” Tanzania Daily News, 28 October.
http://allafrica.com/stories/201610280049.html Staschen, Stefan. 2016. “The Enabling Environment for
Digital Financial Services.” Slide deck. Washington, D.C.:
Mazer, Rafe. 2016. “Competition & Mobile Financial CGAP. https://www.slideshare.net/CGAP/the-enabling
Services: Move Past ‘Test & Learn’.” Blog post, 2 February. -environment-for-digital-financial-services
http://www.cgap.org/blog/competition-mobile-financial
-services-move-past-test-learn
———. 2018. “Basic Regulatory Enablers for Digital
Financial Services—Lessons from CGAP’s Experience
McCaffrey, Mike, Leena Anthony, Annabel Schiff, in Ten Focus Countries.” Working Paper. Washington,
Kimathi Githachuri, and Graham A. N. Wright. 2013. D.C.: CGAP. http://www.cgap.org/publications/basic
“Agent Network Accelerator Survey: Tanzania Country -regulatory-enablers-digital-financial-services
Report 2013.” Nairobi: The Helix Institute of Digital
Finance. http://www.helix-institute.com/sites/default
Tanzania Communications Regulatory Authority. 2018.
/files/Publications/Agent%20Network%20Accelerator
Quarterly Communications Statistics. Dar es Salaam:
_Tanzania%20Country%20Report%202013_0.pdf
Government of Tanzania. https://www.tcra.go.tz/index
.php/quarterly-telecommunications-statistics
McKay, Claudia. 2011. “Ghana: Aiming for Interoperability in
Branchless Banking.” Blog post, 16 June. http://www.cgap
Tarazi, Michael, and Kabir Kumar. 2012. “Branchless
.org/blog/ghana-aiming-interoperability-branchless-banking
Banking Interoperability and Agent Exclusivity.” Blog
post, 24 January. http://www.cgap.org/blog/branchless
McKay, Claudia, and Rashmi Pillai. 2016. “Aggregators:
-banking-interoperability-and-agent-exclusivity
The Secret Sauce to Digital Financial Expansion.” Blog
post, 27 January. http://www.cgap.org/blog/aggregators
-secret-sauce-digital-financial-expansion Tarazi, Michael, and Paul Breloff. 2010. “Nonbank E-Money
Issuers: Regulatory Approaches to Protecting Customer
Funds.” Focus Note 63. Washington, D.C.: CGAP.
Modern Ghana. 2013. “MTN Moving Ghana’s Cashless
http://www.cgap.org/publications/nonbank-e-money
Economy with Mobile Money Month.” Modern Ghana,
-issuers
6 August. https://www.modernghana.com/news/480250
/mtn-moving-ghanas-cashless-economy-with-mobile
-money-month.html Tarazi, Michael. 2010. “Branchless Banking: The Test and
See Approach.” Blog post, 10 February. http://www.cgap
Montez, David, and Peter Goldstein. 2010. “Mobile Money .org/blog/branchless-banking-test-and-see-approach
for the Unbanked: Lessons from Tanzania.” Washington,
D.C.: AudienceScapes. http://www.audiencescapes.org World Bank. 2018a. Global Findex 2017. Washington,
/sites/default/files/AudienceScapes_Mobile%20 D.C.: World Bank.
Money%20for%20the%20Unbanked_Lessons%20from%20
Tanzania_December%202010.pdf ———. 2018b. World Development Indicators .
Washington, D.C.: World Bank. http://databank.worldbank
Muthiora, Brian. 2015. “Regulatory Reform: A Conversation .org/data/reports.aspx?source=world-development
with the Bank of Ghana on the Journey towards the New -indicators#
Guidelines for E-Money Issuers.” GSMA, 3 August. https://
www.gsma.com/mobilefordevelopment/programme Zmitrowicz, Stanislaw. 2017. “RegTech: Are Supervisors
/mobile-money/regulatory-reform-a-conversation-with Ready for the Data Revolution?” Blog post, 11 January.
-the-bank-of-ghana-on-the-journey-towards-the-new http://www.cgap.org/blog/regtech-are-supervisors
-guidelines-for-e-money-issuers -ready-data-revolution
No. 110
June 2018
All CGAP publications
are available on the
CGAP Web site at
www.cgap.org.
CGAP
1818 H Street, NW
MSN IS7-700
Washington, DC
20433 USA
Tel: 202-473-9594
Fax: 202-522-3744
Email:
cgap@worldbank.org
© CGAP, 2018
The authors of this Focus Note are Max Mattern, a financial sector specialist for CGAP, and Claudia McKay, a senior financial sector
specialist for CGAP.
Suggested citation:
Mattern, Max, and Claudia McKay. 2018. “Building Inclusive Payment Ecosystems in Tanzania and Ghana.” Focus Note 110.
Washington, D.C.: CGAP.
ISBN: 978-1-62696-082-4
Foundation
Global Affairs
Canada