1. Issues of competition and regulation in mobile money 2 nd Annual Competition and Economic Regulation week in Southern Africa Simon Roberts

2. What is ‘mobile money’? Mobile money transfer (wallet) Mobile payments Bill-payments (utilities etc) Merchant payments Credit and savings (with a bank account) Others: insurance Services for unbanked and for banked? Alternative is sending money with the bus driver? Supermarket chains developing products. Transfer through the banking system, accessing account through internet banking (using smart phone)?

3. Explaining the growth of mobile money Heavy regulation stifles development Requirement for a bank licence even for MMT Level of approval for agents Level of KYC required Lack of infrastructure, undeveloped banking network, means greater demand for MMT Cash In / Cash Out network developing alongside send and receive Growth ignites or not at all (Evans and Pirchio, 2015) M-Pesa experience? Started as donor-funded pilot in Kenya

4. Three regulatory regimes are involved Competition Financial Services Telecom

5. Issues of competition and regulation Network effects in multi-sided markets/platforms Mobile telecoms Banking Agents (retailers) Competition for the market? Agent exclusivity? Interoperability (and off-net charges)? Main issues (assuming permissive regulation) in MMT are related to MNO competition Rivalry with other providers (banks)? USSD access & charges Mobile banking: access to transactions and credit data (Robb and Vilakazi, 2015; Tausha, Robb and Vilakazi, 2015; Bourreau and Valletti, 2015; Sitbon 2015, Mazer 2016)

6. Cross country experiences? Kenya Huge success in terms of services, impact on consumers Lead by Safaricom’s M-Pesa – rapidly became ubiquitous Second and third MNOs with their own offerings, less successful Mobile banking (M-Shwari) in partnership with bank (CBA) Issues? Agent exclusivity (competition case and settlement) Lack of interoperability Issues with USSD – banks and other participants (aggregators) Credit information Safaricom with majority of MNO market, much larger share in terms of MMT and banking – MMT reinforcing MNO position?

7. Cross country experiences? Tanzania Three MNOs with significant market shares Central bank allowed light regulation in ‘test and learn’ approach No agent exclusivity from early on Large role played by third party developers Rapid growth: close to 50mn registered users in 2015 estimates of 80 thousand active agents Trus account balances around US$250mn Active users close to 20mn Interoperability being agreed through working group Interest being paid on balances in wallets

8. Cross country experiences? Tanzania Three MNOs with significant market shares Central bank allowed light regulation in ‘test and learn’ approach No agent exclusivity from early on Large role played by third party developers Rapid growth: close to 50mn registered users in 2015 estimates of 80 thousand active agents Trust account balances averaging around US$250mn Active users close to 20mn Interoperability being agreed through working group Interest being paid on balances in wallets Apparently lower prices for transfer, USSD, CICO than Kenya

9. Issues Regulation: what view taken by central bank? (lobbying power of banking sector) Incentives to invest, and collaborate Distinguish services Competition (or lack) in telecoms Convergence of telecoms and banking, and evolution of services …and supermarkets? Understand network effects, in multi-sided platforms Consumer information (and privacy?) Value of comparative country experiences