Feature Article of Thursday, 12 October 2017

Columnist: 3news.com

Interoperability, will the consumer benefit?

It is a raging debate, to interoperate or not to interoperate. That is the question in many developing countries where telecommunications and ICT have made significant progress in terms of impact and penetration. In the case of Ghana however, a definite decision seems to have been made to interoperate; that there is the utmost need for a third party to interconnect the retail payment transactions facilitated by the electronic platforms in services provided by the commercial banks, telecommunication companies, ATMs and Point Of Sale (POS) devices.

Already, a private company, Sibton Switch has been contracted to build, operate and own a national switch which will monitor and co-ordinate payment transactions among all the telecommunication companies and banks.

At the center of the whole service is the consumer or the main user, raising the most important question as to what is in for the consumer when this whole idea is put into implementation. First point to note is that even though the very concept of mobile money or electronic payment transactions creates convenience for the patrons or users, the idea to make the system interoperable ensures that the consumer gets an added benefit of efficiency.

Because there is a third party, kind of monitoring services provided and other transactions, the telecommunication and banking firms are compelled to be more productive, sharpen their competencies and that of their agents and overall attain proficiency in their deliveries. The little complaints are eliminated or drastically reduced. The second point crucial to the consumer benefit argument has to do with safety.

Even though the telecommunication companies in Ghana have done pretty well over the years, one cannot ignore security issues resulting in common allegations of hacking, stolen passwords and missing funds, poor network among others. The presence of a third party providing inter-network operability will ensure there is greater degree or an improved reliability within the entire platform. Additionally, the sophisticated nature of the switch to be provided by Sibton Switch will guarantee a highly robust system with its attendant system integrity.

That way, the consumer is assured of a hitch-free service any time of day, anytime of the year. Yet another benefit to the consumer exist in the countries making up the West Africa Economic Monetary Union (WAEMU) and countries like Congo DR, Kenya, Liberia, Nigeria, Madagascar, Rwanda, Tanzania and Uganda. In these countries, the consumer can transfer funds from an E-money and/or deposit account to another account using a mobile device. He or she is able to do transfers including transferring e-money to other e-money, e-money to bank accounts or bank accounts to E-money, bank account to another bank account and all that is possible due to the presence of a third party to carry out an interoperability switch, according to the Alliance for Financial Inclusion (AFI).

So whereas under the current status quo, transactions are allowed only among users of same network, consumers will be in a position to send money irrespective of the recipient’s telecommunication network. This is also because instead of the current arrangement of peer-to-peer switching, a central or one common national switch would have assumed control of the interconnecting all the operators.

In February this year, a well-known Blogger, Chris Skinner reported that three leading MNOs – Vodacom, Millicom’s Tigo and Airtel – announced full interoperability. Vodacom’s participation means that over 16 million mobile money users in Tanzania will be able to send payments to each other, regardless of which mobile operator they use. That is a key achievement, with the country claiming to be the first in Africa with full interoperability.

Let’s come to employment generation. Allowing a private company to undertake this task of interoperability alone means that the state or the government through the central bank will be seeking to deepen its collaboration with the private sector. The private company will be required to employ a certain appreciable number of people as staff. They will be made of highly technical professionals to helping hands. The company will need additional numbers to man its numerous Call Centers to be set up nationwide.

Through their work, the Switch operator is able to include more users onto the platforms, which may mean that a lot more agents could be engaged in the chain. In the end, significant jobs are created out of this project alone. Perhaps the better part of this consumer benefit argument also is the fact that consumers get to pay less under the interoperability arrangement. This is due to the way things occur in the central switch system; the more people (consumers, banks and telecommunication firms) are added, the less the consumer pays because the cost is then spread among all users.

It is therefore not true that with the coming into being of the interoperability concept, consumers will pay more. May be a a simple demonstration will suffice. So for instance, instead of paying GHc 20 for sending GHC 2,000 as it is currently, the figure will reduce to GHC 17.5; GHC 7.5 for GHC 1,000 instead of GHC 10; GHC 3.50 for GHC 500 instead of GHC 5; GHC 1.75 for GHC 200 instead of GHC 2.00 and GHC 0.75 for GHC 100 instead of GHC 1.00.

This is how one stands to gain when the interoperability becomes operational. It is therefore obvious that there is more to benefit the consumer when the interoperability idea is fully implemented than it has been spoken about. The Bank of Ghana has done well; prudent decision and they must loudly be applauded.