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a2a interoperaBility makinG moBile money scHemes interoperate
STAKEHoldER vAluE pRopoSiTioN SuccESS fAcToRS
bANK • potential for increasing transactions, for • agreement framework to handle know and
example for Bill payments future exceptions and customer care issues
• increases utility of payments for existing • reduce friction for bank-scheme transactions
customers in terms of costs, user experience, etc.
• opportunities for cross-selling / up-selling
products (e.g. savings and loans)
• potential of conversions into current accounts
cENTRAl bANK • Better opportunities to understand and • increased visibility: appropriate reports and
manage system risk measures to monitor any introduced risks
• potential to act as the settlement institution • increased efficiency through greater use of
electronic payments options
Table 7: Stakeholder Value Proposition
the above table is an introduction to the potential benefits of interoperability for mmo payment schemes and the different stakeholders.
a key uncertainty for existing mmo payment schemes is that the potential benefit would not materialise and the worry that “the adverse
substitution effect will not be smaller than the network benefit” . During the research for this document, direct evidence of this effect has
4
not been found, either for mobile money or for banking sector payments schemes.
The key costs associated with A2A interoperability can be summarised as:
• One-off technology costs – associated with the design, development and testing of connectivity between schemes, including the
changes required to mobile money host systems for the servicing of inter-scheme transactions;
• Inter-connection costs – whether the implementation option chosen is for direct bi-lateral agreements or through a centralised
transaction processing service, the additional costs introduced should not be so high as to diminish the attractiveness of inter-
scheme transfers across the spectrum of mobile money users. if one of the goals of interoperability is to improve financial inclusion,
then transaction costs are a particularly sensitive element of the service;
• Operational costs – the majority of which may be associated with servicing customers who make incorrect transfers between ac-
counts in different schemes. this is recognised as a key customer care cost for mature mobile money schemes where transfers are
only available between its own accounts. adding the ability to transfer funds externally to the scheme means that the problems with
incorrect transfers could be magnified and made more complex. it is important that consideration for this type of ‘exception transac-
tion’ is discussed and an approach agreed early in the lifecycle of any a2a interoperability programme.
in the Gsm business model, operators decided on a commercial agreement where the operator receiving a call or a text is entitled to a
termination fee set by that operator. in high pre-paid markets, this has resulted in extensive on-net use through customers using multiple
sims to avoid these extra costs. in mobile money, there is an opportunity to explore other commercial models, models that instead would
encourage cross-scheme transactions.
30
STAKEHoldER vAluE pRopoSiTioN SuccESS fAcToRS
bANK • potential for increasing transactions, for • agreement framework to handle know and
example for Bill payments future exceptions and customer care issues
• increases utility of payments for existing • reduce friction for bank-scheme transactions
customers in terms of costs, user experience, etc.
• opportunities for cross-selling / up-selling
products (e.g. savings and loans)
• potential of conversions into current accounts
cENTRAl bANK • Better opportunities to understand and • increased visibility: appropriate reports and
manage system risk measures to monitor any introduced risks
• potential to act as the settlement institution • increased efficiency through greater use of
electronic payments options
Table 7: Stakeholder Value Proposition
the above table is an introduction to the potential benefits of interoperability for mmo payment schemes and the different stakeholders.
a key uncertainty for existing mmo payment schemes is that the potential benefit would not materialise and the worry that “the adverse
substitution effect will not be smaller than the network benefit” . During the research for this document, direct evidence of this effect has
4
not been found, either for mobile money or for banking sector payments schemes.
The key costs associated with A2A interoperability can be summarised as:
• One-off technology costs – associated with the design, development and testing of connectivity between schemes, including the
changes required to mobile money host systems for the servicing of inter-scheme transactions;
• Inter-connection costs – whether the implementation option chosen is for direct bi-lateral agreements or through a centralised
transaction processing service, the additional costs introduced should not be so high as to diminish the attractiveness of inter-
scheme transfers across the spectrum of mobile money users. if one of the goals of interoperability is to improve financial inclusion,
then transaction costs are a particularly sensitive element of the service;
• Operational costs – the majority of which may be associated with servicing customers who make incorrect transfers between ac-
counts in different schemes. this is recognised as a key customer care cost for mature mobile money schemes where transfers are
only available between its own accounts. adding the ability to transfer funds externally to the scheme means that the problems with
incorrect transfers could be magnified and made more complex. it is important that consideration for this type of ‘exception transac-
tion’ is discussed and an approach agreed early in the lifecycle of any a2a interoperability programme.
in the Gsm business model, operators decided on a commercial agreement where the operator receiving a call or a text is entitled to a
termination fee set by that operator. in high pre-paid markets, this has resulted in extensive on-net use through customers using multiple
sims to avoid these extra costs. in mobile money, there is an opportunity to explore other commercial models, models that instead would
encourage cross-scheme transactions.
30
