r
“In the second model, one or more of the major
network operators could take the lead. This would create
opportunities to earn a percentage of switching revenues,
increase cross-selling and retention of customers, while
gaining access to valuable customer data.” By leveraging
their relationship with handset manufacturers, operators
can attempt to ‘disintermediate’ financial institutions by
deploying a solution using an embedded chip or SIM card.
“However, due to regulation in Africa, many operators
would require a banking license to achieve this. Network
operators are also not familiar with the risk and compliance
structures required and are not seen as financial handlers by
consumers. Potentially a banking license may cease to be a
barrier to non-traditional providers,” Verster said.
A close-knit partnership model involving some financial
institutions and major network operators working together
to offer a mobile solution to their collective client base,
could also be a possibility.
“While a collaborative approach can expedite speed-tomarket and adoption, it opens the current interchange
model to outside parties. Network operators are also likely
to take a percentage of each transaction.”
“While obviously attractive to network operators, financial
institutions, card networks, and merchant acquirers would
be negatively impacted. These stakeholders would have to
weigh the cost of lower margins against the potential for
additional and higher value transactions.”
“Time will tell which model is adopted. What is certain,
however, is that Africa with its burgeoning mobile
phone user base will continue to be a leading adopter of
m-payment technologies,” Verster said.
The ‘mobi-payscape’ in Africa
Digital technology
and payment
providers
Financial
Institutions
“These partnerships are likely to emerge in the shortterm, as they can provide increased speed-to-market and
the development of exclusive offerings for customers.
Depending on the technology selected, network operators
could earn a percentage of interchange revenue, or a ‘realestate’ fee for enabling m