Technically Speaking
vritti
March 2018
15
— Mohit Bhargava
It would be fair to say that the last decade in the developing world was the decade of mobile
money. From a humble 7 services in 2007, mobile money is now an extensive industry of 277
services in 90 countries. In the past few years, mobile money has transformed the financial
landscape in many countries lifting more than 600 million unbanked and under-banked people
out of financial exclusion. Globally mobile money services are now processing a billion dollars a
day and in some countries like Kenya and Zimbabwe have become the largest financial platform.
While the rapid growth and transformational impact of mobile money is undeniable, industry
experts often say that the ‘closed-loop’ nature of many mobile money services is limiting its
true growth potential. ‘Closed-loop’ effectively means that customer of one mobile money service
cannot transact directly with customers, agents and merchants of other mobile money
services or payment systems.
From a humble 7 services in 2007, mobile money is now an extensive
industry of 277 services in 90 countries
In this context, Interoperability has been widely discussed as the way ahead for mobile money
industry. Interoperability in a broader context means customers of one mobile money service
are able to transact with customers of other payment systems (within the same country or in
foreign countries) such as bank or other mobile money services. Thus when interoperability is
available, customers will be able to transfer money between a mobile money account and bank
account or between two mobile money accounts belonging to different mobile money services.
Interoperability also extends to other use cases such as cash-in, cash-out, merchant payments,
bulk payment, bill payments et al. An example of this would be, that customer of 'mobile
money service A' can cash-in or cash-out at agent belonging to 'mobile money service B'.