Page 5 - A2A-interoperability_Online
P. 5
a2a interoperaBility makinG moBile money scHemes interoperate
1.1
Introduction
and summary
I nteroperability in the context of mobile money can mean many different things, but one of the most often cited use cases is for
mobile money operators (mmos) to provide the ability for customers to undertake money transfers between two accounts at different
mobile money schemes, alongside the ability to transfer money between accounts at mobile money schemes and accounts at banks.
this paper is focused on this functionality, referred to as account-to-account (a2a) interoperability.
a2a interoperability in mobile money may create strong positive network effects; there is a wide body of research that investigates
interoperability in payments systems and assesses the opportunity for participants that is created through network effects. studies
have found empirical evidence that demonstrates the positive network effects of a2a interoperability between banks, which could be
expected to apply also for mobile money.
inappropriate implementation choices, or a pre-mature regulatory mandate that forces untimely and unsustainable solutions for
interoperability, may negate the potentially significant benefits that individ ual mobile money schemes can achieve by being part of a
wider, interoperable network. as an example, price sensitiveness has resulted in the under-utilisation of certain bank payment schemes,
illustrating the effect of too costly implementations or high pricing.
to avoid this, this paper presents a methodological approach to identify and implement an optimal solution for a2a interoperability.
there are a number of implementation options; we bring up six different ones in this paper, ranging from bilateral between parities to
a single central processor using an existing national banking service. as each implementation option for a2a interoperability is likely to
affect the product and the mobile money operator in different ways; on pricing, governance and operational procedures for example, the
choice of implementation option should be made based on a number of strategic considerations.
this paper introduces an evaluation framework to filter implementation options using a set of eight evaluation criteria. the most
appropriate solution for any given market is not necessarily the same for all markets. any evaluation needs to take into consideration
the market context and capabilities of existing financial infrastructures. it is essential for the implementation to preserve the defining
features of mobile money; that transactions are in real-time and at low-cost. the service should remain accessible and any introduced
risks need to be properly mitigated. price and accessibility are particularly important if a2a interoperability will have a positive
impact on financial inclusion.
the implementation of a2a interoperability requires collaboration between commercial companies, often competitors. Getting companies
to work together requires effective organisation and getting collaborations to deliver will require effective leadership and governance.
2
1.1
Introduction
and summary
I nteroperability in the context of mobile money can mean many different things, but one of the most often cited use cases is for
mobile money operators (mmos) to provide the ability for customers to undertake money transfers between two accounts at different
mobile money schemes, alongside the ability to transfer money between accounts at mobile money schemes and accounts at banks.
this paper is focused on this functionality, referred to as account-to-account (a2a) interoperability.
a2a interoperability in mobile money may create strong positive network effects; there is a wide body of research that investigates
interoperability in payments systems and assesses the opportunity for participants that is created through network effects. studies
have found empirical evidence that demonstrates the positive network effects of a2a interoperability between banks, which could be
expected to apply also for mobile money.
inappropriate implementation choices, or a pre-mature regulatory mandate that forces untimely and unsustainable solutions for
interoperability, may negate the potentially significant benefits that individ ual mobile money schemes can achieve by being part of a
wider, interoperable network. as an example, price sensitiveness has resulted in the under-utilisation of certain bank payment schemes,
illustrating the effect of too costly implementations or high pricing.
to avoid this, this paper presents a methodological approach to identify and implement an optimal solution for a2a interoperability.
there are a number of implementation options; we bring up six different ones in this paper, ranging from bilateral between parities to
a single central processor using an existing national banking service. as each implementation option for a2a interoperability is likely to
affect the product and the mobile money operator in different ways; on pricing, governance and operational procedures for example, the
choice of implementation option should be made based on a number of strategic considerations.
this paper introduces an evaluation framework to filter implementation options using a set of eight evaluation criteria. the most
appropriate solution for any given market is not necessarily the same for all markets. any evaluation needs to take into consideration
the market context and capabilities of existing financial infrastructures. it is essential for the implementation to preserve the defining
features of mobile money; that transactions are in real-time and at low-cost. the service should remain accessible and any introduced
risks need to be properly mitigated. price and accessibility are particularly important if a2a interoperability will have a positive
impact on financial inclusion.
the implementation of a2a interoperability requires collaboration between commercial companies, often competitors. Getting companies
to work together requires effective organisation and getting collaborations to deliver will require effective leadership and governance.
2
