Rwanda’s Payment Systems Set to Become More Interconnected
======================================================
Kigali, Rwanda - The National Bank of Rwanda (BNR) has introduced new regulations requiring all payment providers, including mobile network operators (MNOs) and banks, to be interoperable by June 2013. This move aims to promote financial inclusion and convenience for Rwandan citizens.
What is Interoperability?
Interoperability refers to a set of arrangements, procedures, and standards that allow participants in different payment schemes to conduct and settle payments across systems while continuing to operate also in their own respective systems.
A Significant Step Towards Financial Inclusion
While MNOs like MTN have already achieved some level of interoperability with other mobile money platforms, the new regulation marks a significant step towards greater financial inclusion. Currently, users can send money between different networks, but may be required to visit an agent to withdraw or deposit cash.
Unprecedented Global Achievement
According to industry experts, achieving true interoperability between MNO payment systems and banks is unprecedented globally. Most countries have only achieved partial interoperability or have introduced regulations that restrict the scope of mobile money services.
A Model for Other African Countries?
The Rwanda case is unique in that it requires all payment providers to be interconnected, making it a potential model for other African countries seeking to promote financial inclusion.
Challenges and Concerns
However, experts caution that heavy-handed regulation can stifle innovation and hinder the growth of the mobile money market. The experience of other countries such as Liberia, which has seen limited success with its own interoperability regulations, serves as a warning.
Benefits of Interoperability
The benefits of interoperability are clear:
- Increased convenience for customers
- Promotes competition among payment providers
- Reduces costs associated with transactions
In Rwanda’s case, the main beneficiaries would be customers who currently face inconvenience and higher costs when transacting with users from other networks. Interoperability would reduce the advantage enjoyed by MTN, a leading mobile network operator in the country, and create a more level playing field for all payment providers.
Uncertain Path Ahead
While the path ahead is uncertain, experts believe that interoperability has the potential to transform Rwanda’s financial landscape and promote greater financial inclusion.