Mobile Money Launches in Central Africa: An Interview with MTN Cameroon

In February 2010, GSMA hosted the Central African Mobile Money Roundtable. The Focus of this event was to share information and experiences regulating mobile money with the Banque des États de l’Afrique centrale (BEAC), which is the financial services regulator for the Economic Community of Central African States.  The roundtable was attended by MTN, Orange, Zain, Camtel, Citibank, Afriland First Bank, BEAC, BCEAO, Central Bank of Kenya, Bank of Ghana and CGAP.

Roughly six months after this event, MTN has now launched MobileMoney in Cameroon, making it the first mobile network operator in the Economic Community of Central African States, to launch a mobile money service. To understand more about their deployment and overall strategy, I recently caught up with Peter Ndongla, the director of MTN Cameroon’s MobileMoney to gain some insights into their service and their journey towards regulatory approval.

GSMA:  Can you tell us about the process you used to engage with your regulator and bank partner?

PD: The process was challenging. Our initial application with Ecobank in 2008 was not successful given that mobile money at this point was a very new concept, and our bank partner found it difficult to engage with BEAC. Back then, mobile money was new, and the risk and complexity in their view was high.  Therefore, BEAC officials decided they needed to learn more about the industry before they gave us the green light. We also had discussions with Citibank, but given that their business focus in the country is not on consumer banking, they found that mobile money was out of their scope of work.  At the end, Afriland First Bank came to us and we found in them the right partner to go ahead with the application and eventual launch.

GSMA: Why did you choose Afriland First Bank as your partner?

PD: In the initial stages, given the regulatory hurdles we had to overcome, we found that some banks wanted to lead the deployment, leaving us solely as a service provider. We didn’t think this was an attractive option given the resources we had already invested into this project, and the negative impact this could have on MTN. Eventually, we found in Afriland, a bank partner which was interested in the business, but allowed us to be at the forefront and focus on the core areas. MTN is responsible for management of the technical platform, the marketing and distribution network, while Afriland is in charge of holding the float and the issuance of e-money, which guarantees and ensures the service is in compliance with the law.

GSMA: What role did Afriland play and what role did MTN play in the application process?

PD: In terms of the application process, the advantage that Afriland had was that it had already received a license for a similar mobile money service called I-Card.  I-Card is an e-wallet based on chip-and -pin technology which also serves as a means to secure your money. The only difference between these two services was that Icard was using  a smart card platform, and our  mobile money  service was to use the mobile channel as the medium of transaction.  Due to the similarities between these two services, BEAC recognized that there was no need in issuing a separate license, and  asked Icard to contact MTN Cameroon and  provide them with the technology specifications  to make sure the platforms posed no further risks to the system. Once they were satisfied, they gave us the green light to go ahead.

GSMA: What was your experience participating in the roundtable in February?

PD: Yes. The roundtable played a big role in our relationship with the regulator.  After the roundtable, BEAC felt more comfortable with the various models involved in the deployment of mobile money, and we feel that this was a turning point for them in their understanding of the roles of both banks and MNOs in the deployment of a mobile money service.

GSMA: What have been the developments since the roundtable?

PD: After some time, BEAC approved our service, and have now informed us that they are now ready to examine and approve mobile money applications in other countries in the Central African region.  It’s been a long and arduous process, but in my view the regulatory roundtable was a turning point as it allowed them to see the different models and partnerships involved.  In a way, I feel MTN Cameroon effectively paved the way for the industry in the Central African region.  In addition, we feel that the usefulness of this forum highlights the need to host similar events in French-speaking West Africa in order to push the industry forward.

GSMA: What questions did BEAC have?

PD: BEAC was concerned about security and felt that they needed to understand more about the risks inherent to the system.   In addition, BEAC felt more comfortable with having the bank lead the license process at the beginning, and were concerned about the possible snowball effect that the issuance of a license to MTN could have in the region.  They were worried that other MNOs would then follow in applying for licenses and felt they needed to make sure they understood the service well before going ahead.

GSMA: Yours is the first service to launch in the Central Africa region – how is the customer need for mobile money here the same or different than in East Africa?

PD:  In East Africa, MTN Uganda has been working very hard at getting their deployment off the ground.  In Cameroon, we have realized that mobile money needs a lot of education, and this is something we see as a key learning for us. We feel the need to be in the field, educating potential customers about how mobile money can satisfy their needs.  Advertising and Marketing are key aspects to any mobile money deployment, and we need to market not just to potential users, but to the users themselves so they truly understand and benefit from the service.  In Cameroon, we see a bigger need for bill and salary payments than P2P.  At the moment, people have to queue for several hours to pay their bills, or receive their salaries at the bank; therefore we expect this to be one of the major areas of value for our customers.

GSMA: How will the MobileMoney service in Cameroon be the same or different from other countries where MTN has launched?

PD:    First, we are going to try to incentivise people to buy airtime with mobile money.  By doing this we want people to learn how to use the service and from there graduate to the rest of the functionalities the mobile wallet can offer.  Once we roll out, we expect to provide the following services:

  • P to Cash: sending money from your MTN MobileMoney account to a third party for collection in cash (using a reference and a pin code).
  • P2P:  sending money between MTN MobileMoney subscribers.
  • Airtime top-up: Purchase of airtime from your MTN MobileMoney account for oneself or a third person.
  • Bill and Merchant Payments: purchase of goods from authorized retailers and utility suppliers.

Registration, deposit, withdrawal (P to cash) and airtime purchase will be free but there will be charges for the other services.

GSMA: How many customers do you estimate that MTN MobileMoney in Cameroon will have in a year’s time?

PD:  Our expectation is that we will be able to sign up around 100,000 customers every month for the first 12 months.

GSMA: Thank you Peter.

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