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Mobile Money for the Unbanked

By Gunnar Camner

In Tanzania, an aggregator connects mobile money deployments

In Tanzania, an aggregator connects mobile money deployments

Mobile money has taken off in Tanzania over the last few years and about a quarter of the population are now using mobile money services. It is a competitive market where all four major mobile operators have launched their own mobile money service. The fierce competition in the market has already led to lowered prices of mobile money services in the country, and several promotions to push money transfers.

In this booming yet fragmented market, a company called Selcom has found a way to serve clients of all mobile money deployments. Selcom started as a VAS provider that won a national lottery license to sell digital lottery tickets using SMS. After the lottery business stopped, they integrated with the state-owned electricity company in Tanzania, Tanesco, to enable electronic prepaid electricity vending for them. Selcom realised that they couldn’t serve all customers in the country themselves, so they encouraged mobile money deployments to integrate with Selcom to allow mobile money customers to buy prepaid electricity using their phones, and they all did. For operators, connecting to Selcom for bill payments made strategic sense since they could get bill payments to market quickly and with lower development costs than if they would develop the integration with the utility company themselves.

Since then Selcom have increased their billing portfolio to include most utility companies in the country and they are also integrated with the ATM networks as well as many banks, including Barclays, Standard Chartered Bank, NMB and NBC to name a few. They are currently rolling out their own POS network and expect to have 4,000 agents active before the end of 2012. From these devices, customers can pay their bills directly and customers of mobile money can cash-out regardless which deployment they are customers of.

Selcom have created probably the first cash-out solution for mobile money that works for all deployments in a market, and it is initiated from one single device. It will be interesting to follow how customers and market players will react to this novel value proposition and what role the company will have in further connecting the financial landscape in Tanzania.

Photo: Flickr User – emilsjoblom

One Comment

  1. This is great. I support the integration of payment platforms. If this is not done, dominant players may develop funny policies that put competition in their favour against others. Of course Selcom is bound to meet a number of challenges in building their agent network like terminal costs, training, network coverage etc. This is what we have been waiting for. Wish you the best Selcom!

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