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Often identified as a key barrier to the uptake and usage of digital financial services, as well as a key facet of a modern national payment system, interoperability between telecoms is an important aspect of advancing the world’s mobile money markets. In Rwanda, MTN and Airtel recently announced a long-awaited cross border mobile mobile money transfer. Users of Airtel Money or MTN Mobile Money will be able to transact with their counterparts in Kenya, Uganda, and Tanzania once the telcos have harmonized their business rules and platforms with one another.

The deal brings promise of increased payment system interoperability in the East African Community (EAC), whose members are: Burundi, Kenya, Rwanda, Tanzania, and Uganda. With increased levels of mobile money interoperability between the member countries, cross-border trade could benefit significantly from the increased ease and speed of low-value transactions. Analysis of EAC intra-regional trade revealed that Kenya is the dominant force with about 39% share of intra-regional trade, followed by Uganda (25%), and Tanzania and Rwanda with 16% each.[1] However, trade with EAC member countries paints a starker difference with Kenya and Tanzania amounting to 44% and 33% of the EAC’s trade with the world, respectively – Burundi, Rwanda, and Uganda total 23% together.[2] We expect that intra-regional trade would be assisted increased usage of mobile money. Traders would be able to transfer sums of money in their local currency to the receiver’s local currency with the push of a button and no longer face the danger of carrying large sums of cash for transactions – an undoubted benefit.

Read the article here: http://mobilemoneyafrica.com/content.php?id=2143

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[1] Trade in the East African Community (EAC), Ecobank, 2013 http://www.ecobank.com/upload/201310080459192956946Ubp43NNju.pdf

[2] Ecobank, 2013

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