customers might migrate from one platform to another (i.e. the distribution of the cake might change), establishing interoperability is generally a smart move. But there is still another good reason for telcos to join forces. That is, to push the agenda of mobile money with the local government.
During its early years, mobile money was still flying under the radar in many countries, benefiting from both low taxation and low regulatory scrutiny. With its growing importance, however, governments are increasingly paying attention to it, both as a source of tax revenues and as a subject of regulation. While this is fully justified from a government point of view (e.g. to prevent misuse for illegal activities such as financing of terrorism), telcos should engage in an open dialogue to make sure the right balance is struck.
Especially in the case of mobile money systems that are still in an early development stage, governments might unwittingly hamper growth through excessive taxation and regulation. In contrast, prudent regulatory policy, such as the temporary relaxation of KYC requirements (which apply to regular banks), can boost the growth of mobile money systems. Thus, for telcos, there is a lot to gain from joining forces and speaking with one voice.
To put it in a nutshell, both telco providers and partners benefit from a high level of diversity and scale within the ecosystem. Telcos can leverage this opportunity by providing advantages such as superior pricing, low entry cost, and standardized interfaces.
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9) KYC requirements in financal services are designed to verify the identity, suitability, and potential risks of clients in order to prevent illicit activites such as money laundering, bribery, or financing of terrorism.
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