On Mobile Money: The issue of interoperability

For a health program manager exploring mobile payment solutions to reimburse health vouchers, provide cash incentives to pregnant mothers, or pay health worker salaries, among other potential applications, challenges surrounding the delivery of bulk payments to beneficiaries who belong to different mobile networks, can pose a huge barrier to program implementation and uptake. Interconnection between payment platforms (also known as platform to platform interoperability) would facilitate payments across networks much the same way that it allows us to send text messages to friends and family on different mobile network carriers.

The Consultative Group to Assist the Poor (CGAP) provides a framework for assessing the different levels of interoperability in payment platforms, which additionally include agent and customer level-interoperability.  In the context of health program managers tasked with bulk payments, we focus here on platform level interoperability. This GSMA report notes that customers value the ability to transaction across multiple networks, potentially increasing transaction volumes and improving business for mobile network operators, very few countries in fact have moved towards interconnected payment platforms. Two exceptions are Nigeria, a bank-led model for mobile payments, where a directive for interoperable platforms was issued by the Central Bank of Nigeria and Indonesia where last May, the country’s three major mobile network operators announced their decision to enable mobile money transfers across their networks. Additionally, in Rwanda new regulations are helping to move mobile network operators in the direction of interoperability.

As countries continue to explore the issue of platform interoperability, organizations and programs are finding different ways to transact with beneficiaries across multiple networks. Some have gone the route of issuing designated SIM cards for receiving payments or requiring beneficiaries to purchase a SIM card for the preferred payment network, which can introduce many operational challenges as described in this blog by Chrissy Martin.

Other programs are turning to innovative third party providers (also referred to as aggregators) for sending and receiving payments to and from multiple network providers, as highlighted in this December 2013 webinar on mobile money interoperability hosted by NetHope. Examples of third party providers include Selcom in Tanzania, and Yo! Payments in Uganda. The webinar also features a presentation from John Snow Inc. (JSI) Tanzania on their decision to use a third party aggregator to facilitate bulk payments to training participants on multiple networks.

We spoke with Gerald Begumisa, of Yo! Payments to learn more about third party payment solutions for different sectors in Uganda, including health.

Q&A with Gerald Begumisa, Yo Uganda  Limited

Yo Uganda Limited was founded in 2006. In 2011, Yo Uganda Limited launched a new service called Yo! Payments, with the aim of catalyzing mobile money use in Uganda, and beyond. Yo! Payments enables organizations to securely, conveniently and centrally manage mobile money payments in an interoperable way.

What does Yo! Payments do? What services does it offer, and who are your clients?

Yo! Payments is a third-party provider that allows companies to integrate mobile money solutions into their systems to better manage and streamline cash transactions. Yo! Payments is an aggregator—we work across several mobile operator networks—so by working with us, our clients can access mobile money technologies offered by various mobile network operators. We help our clients rapidly establish systems to use mobile money (since they don’t have to establish a contract with a MNO) and we facilitate interoperability across mobile money programs. Over the past few years, we’ve been developing the design and features of our platform to meet the needs of our clients and to make it easy to use. Our clients come from all sectors, and notably include merchants, financial institutions and non-governmental organizations.

What does the landscape for mobile money in health look like in Uganda?

We’re beginning to see heightened interest and increasing adoption of mobile money in health, but the market remains largely untapped in Uganda. Recently, some hospitals and other health providers began accepting payments via mobile money, and I believe that some insurance companies (life insurance, and possibly health insurance) use mobile payments to collect premiums and to send payments to providers. I’ve also observed that an increasing number of NGO’s and other organizations working in health are seeking out opportunities to use mobile money. There’s clearly a lot of potential and interest for mobile money and health, but it’s in a nascent phase in health in Uganda.

Does Yo! Payments have any clients in the health sector?

We’ve worked with a number of NGOs and a few projects funded by USAID that aim to strengthen social sectors, but we only have one client focused on health – Uganda Health Marketing Group. They work on reproductive, maternal and child health issues in Uganda, and they use Yo! Payments to make bulk payments to pay their program staff for trainings and other programmatic activities. Their experience using mobile money has been similar to that of other organizations in other sectors.

What are the major barriers that are limiting uptake for mobile money in the health sector?

Similarly to other sectors, establishing agreements with MNOs and interoperability between different network operators are two big issues faced by organizations in the health sector seeking to use mobile money in health.

Is mobile money expertise something that can cross borders, given that so many aspects to it are specific to the country context?

Certainly.  In particular, the integration and interoperability challenges experienced by organizations are largely similar regardless of the country. Learnings in these areas in one country can be exported and applied to other countries.

What can we expect from Yo! Payments in 2014, and the years ahead?

We have plans to expand our service in the region and beyond. Furthermore, we are working on several innovations around our service to further increase the value we offer, and help our customers reduce costs and increase efficiency. 

Is there anything else you’d like to share at this time?

Mobile money transfer has been widely successful in person-to-person transfers. There is, however, still great opportunity to transfer this success to other payments such as payments for goods and services, salary payments et cetera, and thus promote the benefits of digital payments over cash. We hope to position Yo! Payments to play a leading role in this.