Professional Documents
Culture Documents
February 2013
NetHope and The Mennonite Economic Development Associates (MEDA) prepared this publication for
review by the United States Agency for International Development.
DISCLAIMER
The authors views expressed in this publication do not necessarily reflect the
views of the United States Agency for International Development or the United
States Government.
2
TABLE OF CONTENTS
ACRONYMS ......................................................................................................................... 5
EXECUTIVE SUMMARY ....................................................................................................... 6
INTRODUCTION AND PURPOSE ......................................................................................... 7
ANALYSIS OF CURRENT TANZANIAN MOBILE PAYMENTS ENVIRONMENT ..................... 9
OVERVIEW ....................................................................................................................... 9
Table 1: Mobile Phone and Mobile Money Usage by Provider ............................................. 10
Figure 1: Mobile phone vs. Bank penetration ....................................................................... 10
Figure 2: Mobile money agents vs. Traditional financial service access points .................... 11
REGULATORY ENVIRONMENT....................................................................................... 12
TANZANIAN MOBILE MONEY SERVICES ........................................................................ 13
Table 2: P2P Tariff Comparison for a transaction of TSH 50,000 / USD 30.54 ...................... 14
Table 3: Illustrative B2P Tariff Comparison ........................................................................... 15
Table 4: Cost Comparison of Money Transfer Fees............................................................... 16
Table 5: Partnerships for Mobile Banking, by Provider ......................................................... 17
Table 6: Mobile Money Services in Market Today ................................................................ 18
ACRONYMS
B2P
BOA
BoT
BTC Alliance
CHW
CRDB
EFT
FTF
GoT
GSMA
IP
MEDA
MFI
MNO
NGO
NBC
NPS
P2B
P2P
PEB
PIN
SIM
SOP
TSH
USAID
USD
VAS
EXECUTIVE SUMMARY
In just four years, mobile money usage in Tanzania has grown from zero to at least 5.5
million active users1. This rapid expansion highlights the fact that there is clear need for
safe, inexpensive, and efficient ways to send money around the country. Due to this,
USAID/Tanzania requested an assessment of how current partners are utilizing mobile
money as an electronic payment system to replace cash for both operational and
programmatic payments.
USAID implementing partners, like many organizations operating in Tanzania, struggle
with cash payments, which they are still using mainly for issuing per diems for training
participants and paying field staff. To make these payments, they are often using bank
branches in the field in order to decrease the distance across which cash is transported.
Yet, even with this strategy, they are still experiencing many of the challenges commonly
associated with cash: cash can be dangerous, costly, and can lack transparency since it
is hard to track. In recognition of the problems with cash that exist worldwide, the United
States Agency for International Development (USAID) has made a commitment to the
Better Than Cash Alliance (BTC Alliance) to examine how electronic payments solutions,
such as mobile money, can improve aid effectiveness and strengthen programs.
This assessment contributes to a wide variety of reference materials and tools, which
USAID is producing as part of this commitment. It summarizes the findings of a team of
consultants from USAID/DC, Nethope, and Mennonite Economic Development
Associates (MEDA), who conducted a survey of implementing partners, a literature
review, and in-country interviews with implementing partners and key stakeholders.
After describing the reasoning behind this report in more detail within Section II, Section
III provides an overview of the mobile money market in Tanzania as of February 2013,
and Section IV outlines the current regulatory environment. Section V provides more
detail on the five main services offered through mobile money, highlighting how
functionality and usage is becoming increasingly innovative and diverse. It also
discusses the role of third-party companies who are providing added value to the basic
products offered by the MNOs.
Section VI takes a more in-depth look at how implementing partners are using cash for
last mile payments in the field, and uses two organizations to illustrate the risk and cost
of these cash payments. Section VII details the experiences of two organizations,
Pathfinder and D-Tree, who are already using mobile money as a replacement for cash
payments. These examples show that there are still challenges for organizations using
mobile money, but that the overall experience is positive and is showing preliminary
benefits of cost savings, increased flexibility, and time savings for both staff and program
participants. Section VIII looks at FINCA, a financial institution, which is already using
mobile money on a large scale, and is one example of how the new technology is
beginning to expand access to formal financial services.
Based on these examples and the assessment of the mobile money market, Section IX
provides recommendations to implementers and donors on how both can properly
assess opportunities and challenges for using mobile money to replace cash payments.
1
Active definition in this case meaning at lease one transaction in the last 30 days
Finally, in the Appendix, there is additional information on many of the themes covered
in the report, including the USAID Draft Financial Documentation Reference Tool, which
provides detailed information on the functionality that different mobile money service
providers in Tanzania offer for tracking and recording bulk payments.
In summary, there is a clear possibility for organizations to benefit from the use of mobile
money in their operations and program. At the same time, they need to conduct a
thorough due diligence by assessing provider capabilities and a cost-benefit analysis of
the financial and non-financial costs of both cash and non-cash options. Only through
this due diligence can implementing partners determine if mobile payments are truly
better than cash for their program, at this time.
2
3
The importance of the last two factors cannot be overstated. There are currently seven
MNOs offering traditional mobile voices services in Tanzania. The competition in the
voice market drives down price points, and is now driving similar consumer benefits in
the mobile money market. The first mobile money service in the country, Vodacoms MPesa, had very slow uptake in its first few years of operation. Despite the success of the
same product in nearby Kenya, many wondered if the product would ever take off in
Tanzania. However, the company continued to invest and to adapt prices, commissions,
and marketing messages 7 . These changes, along with the introduction of new
competitors to the market, are all strongly correlated with the sudden shift from slow to
4
Intermedia Tanzania Mobile Money Tracker Study Wave 3 Report November 2012
GSMA: Mobile World Live http://www.mobileworldlive.com/mobile-money-tracker
6
Mobile Money for the Unbanked "Annual Report 2012" GSMA Note: in this particular report, active customers being defined as
having conducted at least one transaction in the last 90 days.
7
Information from primary interviews with CGAP, the Consulting Group to Assist the Poor.
5
extremely rapid growth in the use of M-Pesa and other mobile money services in the
market.
Table 1 below is a summary of the mobile voice market as well as mobile money active
users in Tanzania. The names of the MNOs are withheld for privacy reasons at the
request of the providers themselves.
Table 1: Mobile Phone and Mobile Money Usage by Provider
MNOs8
Market Share
Mobile Money 30
Voice services9 Day Active
Subscribers10
MNO #1
35%
3.7 million
MNO #2
24%
1.7 million
MNO #3
30%
160,000
MNO #4
10%
80,000
MNO #5
0.9%
N/A
Other MNOs
0.1%
N/A
Total
100%
5.5 million
The rapid growth of mobile phone subscriptions, as compared to the relatively slow
growth of commercial bank accounts over the same time period, is a clear indicator of
the ability of mobile money to extend financial services to new groups of people in
Tanzania, as seen below in Figure 1.
Figure 1: Mobile phone vs. Bank penetration
30000000
25000000
20000000
15000000
10000000
5000000
0
2004
2005
2006
2007
2008
2009
2010
2011
Still, despite this wide access to mobile phones, mobile money requires a network of
agents, which are existing businesses who earn commissions to facilitate registration of
new customers and conduct deposit and withdrawal transactions. Mobile money service
providers in Tanzania have developed an impressive network of cash-in, cash-out points
(agents) nationwide. A recent census of cash outlets in Tanzania conducted by the
8
10
Financial Sector Deepening Trust, found nearly 17,000 unique M-Pesa mobile money
agents throughout the country11. The census only mapped the M-Pesa mobile money
product; however, since most agents serve multiple mobile money services, this is likely
very close to the total number of mobile money agent locations. Figure 2 compares the
number of agents vs. other typical financial services access points in Tanzania.
Figure 2: Mobile money agents vs. Traditional financial service access points12
Agents facilitate the extension of financial services beyond the bank branch. At the
same time, agents are typically located in the general proximity of bank branches, since
agents eventually have to visit a bank in order maintain liquidity (as depicted in the
previously mentioned Intermedia Mobile Money Tracker survey.) In other words, if an
agent runs out of cash, they must visit a bank branch to receive more cash. In return,
the agent sends the bank electronic currency equal to the amount of cash received.
Because of this reliance on banks for liquidity, mobile money agents are are by and
large an extension, but not altogether a substitute for, banking access infrastructure. 13
The ability of mobile money to continue to grow and to offer sound financial services
requires an enabling environment facilitated by sound regulations, as described in the
next section.
Mas, Ignacio and John, Agathamarie. "Where's the Cash? The Geography of Cash Points in Tanzania".
http://www.cgap.org/blog/geography-cash-points-tanzania
12
Bank branch numbers are projected based on World Bank estimates (512), which is similar to the estimate from a
recent study released by Financial Sector Deepening Trust (FSDT) of Tanzania (almost 500 commercial bank branches.).
ATM and POS numbers come directly from the Bank of Tanzania Website. It should be noted that many ATMs are
located within bank branches. MFI branch numbers were pulled from FSDT (see footnote 12)
13
Mas, Ignacio and Agathamarie John, Wheres The Cash? The Geography Of Cash Points In Tanzania, CGAP Blog,
February 28, 2013
11
11
REGULATORY ENVIRONMENT
There are two key sets of regulations in Tanzania that are relevant to mobile and
electronic payments: agent banking regulations and mobile payments regulations.
Regarding the former, the Bank of Tanzania (BoT) released agency-banking guidelines
for the first time on February 1, 2013.14 The guidelines allow commercial banks and
microfinance institutions that are authorized to take deposits to provide services through
agent networks. This may spur a rapid increase in branchless banking and further
innovation by leveling the playing field: previously, the banks could not compete with the
mobile money service providers who were offering services to poor and rural clients via
agents. With the new regulations, many banks are looking to add more services for rural
customers who are already using mobile money. This is likely to happen quickly since
two banks operating in Tanzania, Equity Bank and Kenya Commercial Bank (KCB), have
already implemented some form of agency banking in neighboring Kenya.
Key aspects of these guidelines include:
Under the guidelines, a bank that wishes to implement agent banking will submit
an application to the BoT, Bank Supervision Department, and receive an
approval if deemed suitable according to a risk-based assessment.
An agent can be any business that has been open for more than 2 years.
Technology is required at the agent location in order to facilitate real-time
transactions; in other words, every agent must be able to complete a transaction
in the course of one visit by using a mobile phone, computer with Internet
connection, or other device to immediately verify that the transaction is
successful.
Agents are not allowed to directly register new clients. However, they can
facilitate registration by sending the required information back to the bank branch
for near real-time approval by an official bank employee, using a mobile device,
computer with Internet connection, or other device.
The guidelines stipulate that agents are non-exclusive, meaning multiple
providers can leverage that one agent. However, the guidelines do allow for
constructive exclusivity, meaning that an agent is allowed to decide that it is in
their own best interest to serve only one bank.
The second set of regulations, those for mobile payments, are expected to be released
in mid-2013. These regulations will provide an additional legal framework specific to
mobile money, and will complement the broader National Payment Systems (NPS) Act.
Since these regulations have not yet been approved, mobile money service providers
are currently operating under a Letter of No Objection, which stipulates that they are to
hold all funds in a trust account at a commercial bank. The letter also requires operators
to report to the BoT on a monthly basis on transaction volumes and values, the number
of registered agents, and trust account balances. While this letter does provide a certain
level of control to the BoT, it does not provide for a full range of penalties in the case of
fraud or other issues with the operators. In addition, a company could technically
14
The full text of the regulations can be found on the BoT website at http://www.bottz.org/BankingSupervision/GUIDELINES%20ON%20AGENT%20BANKING%20FOR%20BANKING%20INSTITUTIONS%202
013.pdf.
12
operate mobile money without a letter, although they would have to do so without the
backing of the Government that would severely hinder public trust in the system.
In order to fill these gaps, the NPS team has put a significant amount of time and
thought into drafting the full mobile payments regulations, which are currently awaiting
final approval by the Minister of Finance (along with the full NPS Act.) As part of this
process, they issued draft guidelines several months ago, which were released to the
public for feedback. The latest version of the regulations includes feedback from public
and private partners in Tanzania as well as international support bodies including the
Alliance for Financial Inclusion (AFI) 15 . The BoT worked closely with the Tanzania
Communication Authority (TCRA) to develop these guidelines.
In addition to allowing the BoT to issue a full range of penalties, the suggested
regulations, if passed in their current form, will:
The BoTs approach to regulation of both agency banking and mobile payments is
balanced, and clearly aims to allow continual innovation while implementing appropriate,
risk-based guidelines and restrictions through established licensing processes. While
the regulations have been slow to pass, the BoT has clearly signaled their intent to
operators. The regulations are now awaiting final approval from the Ministry of Finance,
at which point the BoT hopes to have fully regulated and secure mobile payments in
Tanzania to ensure continued and sound growth.
For more on AFIs work with the BOT, see this Knowledge Exchange Insights briefing: http://www.afiglobal.org/sites/default/files/afi_knowledgeexchangeinsights_tanzania_8dec2011_lg.pdf
13
categories, all of which are currently being offered by at least one of the four primary
mobile money service providers: Airtime Top-Up, P2P, Bulk Payments (B2P), Bill
Payment (P2B), Mobile Banking, and International Money Transfers.
1. Airtime Top-Up allows mobile money account holders to purchase prepaid airtime
from their phone, without having to visit an airtime reseller. This is one of the more
popular services - 46% of active mobile money users surveyed in 2012 stated they
had used mobile money to purchase airtime in the last four weeks16.
2. P2P is commonly used to send money to friends and family members across
Tanzania. The same survey mentioned above found that 85% of active mobile
money users had received money in the last four weeks and 62% had sent money17.
Similar to other countries, mobile money users in Tanzania can transfer money
directly to the mobile account of a registered user of the same service, to the mobile
phone of an un-registered user, or to a user of another service.
The following table presents a comparison of the cost of this service across all
mobile money service providers in Tanzania. The chart includes prices for deposit
and withdrawals as well, since these transactions are required in order to make and
receive a transfer.
Table 2: P2P Tariff Comparison for a transaction of TSH 50,000 / USD 30.5418
Tariff TSH
Airtel Money Tigo Pesa
Vodacom
MPesa
Deposit Money
Free
Free
Free
Send Money (Registered User)
Send Money (Unregistered
User)
Withdraw Cash (Registered
User)
Withdraw Cash (Unregistered
User)
TSH 500
USD 0.31
TSH 1900
USD 1.16
TSH 1500
USD .92
Free
TSH 500
USD 0.31
TSH 1900
USD 1.16
TSH 1500
USD .92
Free
TSH 500
USD 0.31
TSH 1900
USD 1.16
TSH 1800
USD 1.10
Free
As the mobile money service providers use different pricing strategies, the table above
compares transactions cost for a transfer of TSH 50,000 (USD 30.54). See full tariff
sheets in Appendix 3.
3. B2P, business-to-person, or Bulk Payments. This service allows an organization,
whether it is a business, government ministry or NGO, to pay multiple recipients at
one time by transferring money (also referred to as pushing funds) into their mobile
money wallets by signing up for a corporate account. Organizations in Tanzania are
16
Intermedia Tanzania Mobile Money Tracker Study Wave 3 Report November 2012 page 21
Intermedia Tanzania Mobile Money Tracker Study Wave 3 Report November 2012 page 21
18
Exchange rate of 1637 TSH: 1 USD used throughout the document.
17
14
starting to use these services in order avoid the risk and costs associated with cash19.
In fact, Airtel uses their own product, Airtel Money, throughout their distribution
channel, and has experienced significant cost savings and efficiency gains by
making all payments to airtime dealers and field representatives via mobile money.
The B2P product is the focus of this report, and specific case studies highlighting
opportunities and challenges for organizations already using bulk payments in
Tanzania are detailed in Section VII.
In terms of costs, mobile money service providers often offer lower transaction fees
for B2P than are offered to individual users of P2P, since they are using the product
in bulk. This discount does not apply for off-net payments (i.e. a payment from an MPesa bulk payments user to a recipient registered with Airtel Money). As additional
benefit to bulk payment users, mobile money service providers often increase the
amount of money that can be sent/received at one time, raising the limits above
those defined for individual users. The rates in the table below describe the cost per
transaction for a company making a payment of USD 30.54 (TSH 50,000 TSH).
Tariff TSH
Vodacom MPesa
No Limit
No Limit
No Limit
TSH 1 million
USD 610
TSH 1 million
USD 610
Deposit Money
Free
TSH 3
million
USD 1832
Free
TSH 200
USD 0.12
(Flat Fee)
TSH 1900
USD 1.16
TSH 1700
USD 1.04
Free
Free
Free
N/A
TSH 1900
USD 1.16
TSH 1800
USD 1.10
Free
TSH 1500
USD 0.92
N/A
Free
To compare mobile money to other options for moving money, the table below compares
the transfer fees associated with checks and EFTs and mobile money bulk payments for
a value of USD 30.54 (TSH 50,000). In this case, it is assumed that the organization
making the payments will absorb the withdrawal fee charged to the recipient.
19
Bulk Payments also have reporting systems associated with them using a web interface. They can
provide both stand alone documents and excel-type of documents that can be downloaded, providing
proof if funds have been transferred to an individual, when, and how much. For more information about
this, please see Appendix 4, which includes a draft Financial Documentation Guide, showing standard
Mobile Money processes, internal controls and documentation produced by these web-based bulk
payment client interfaces.
15
Cost of a
money
transfer
EFT
TSH
10,000*
USD 6.12
Send to off-net
client:
TSH 1900
USD 1.16
(No withdrawal fee)
*EFT charges are fairly uniform across the banking sector and TSH 10,000 is a flat rate
for transfers of any size.
4. P2B, person-to-business, or Bill Payments: This service allows an individual to send
a payment to a company using their mobile money account. Although not as popular
as P2P services, bill pay products are offered by every mobile money product in
Tanzania. Customers have the ability to pay for a variety of services from satellite
television to basic electricity and water bills. Vodacom's M-Pesa has the most robust
bill pay product with 67 registered companies accepting bill payments via M-Pesa20.
This service provides a great alternative to traveling and waiting in line at a bill pay
location. However, the value proposition needs to be more clearly communicated to
Tanzanians, as only 5% of active mobile money customers use the service21. In
addition to paying bills, this service is can also be used by microfinance institutions
who use P2B capabilities to collect repayment for loans. FINCA, one of the largest
microfinance institutions in the world, is using Vodacoms M-Pesa in Tanzania to
collect loan repayments, and is successfully collecting approximately 30,000
transactions per month. This initiative is described in more detail in Section VIII.
5. Mobile Banking: This is a term used to describe a product that allows a client to use
their mobile phone to access a formal bank account, allowing customers to use their
mobile phone to access formal financial services. This product enables a customer
to either pull funds from the bank account onto their mobile wallet, or vice versa. In
Tanzania, many banks have partnered with mobile money services to provide this
service. The following table lists a sample of the bank partnerships already
established by three of the major mobile money service providers.
20
21
http://www.vodacom.co.tz/vodacom-m-pesa/m-pesa-business/pay-billers
Intermedia, Tanzania Mobile Money Tracker Study Wave 3, November 2012, page 21
16
Although this product is readily available, it has yet to be widely adopted in the
Tanzanian market. One potential reason for this could be the majority of bank
account holders already have access to a bank branch or ATM, making the ability to
transact from their mobile handset less relevant. Another reason may be lack of
knowledge of the new service among potential customers who aren't within a close
enough proximity to a financial institution and are therefore likely to see the most
value in the product.
6. International Money Transfer: Vodacom's M-Pesa has partnered with Western Union
to allow mobile money subscribers in Tanzania to send and receive money to and
from countries where Western Union operates. To use this service, senders transact
with Western Union as usual, by visiting a Western Union agent location in their own
country or visiting the Western Union website to send money online. When the
intended recipient in Tanzania receives the transfer, he can either withdraw as usual
at a Western Union location, or cash out at an M-Pesa agent.
This service takes advantage of the vast network and experience of Western Union,
while providing the convenience of receiving money directly to a mobile phone and
allowing customers to store this money for future use in a secure manner.
22
23
17
P2P
Bulk Payments
Bill Pay
Joint Offer w/
Bank Account
International
Money Transfer
Three MNOs, Airtel, Tigo, and Vodacom have answered specific questions asked by
implementing partners surrounding the mobile money services offered. A document
reviewing these questions and answers are contained in Appendix 5, and provides a
more detailed look into these services, as well as issues such as fraud control, policies
around in-network and off-network transfers.
THIRD PARTY SERVICE PROVIDERS
As the success of mobile money continues, entrepreneurs in Tanzania's technology
sector have begun to develop new and improved products to add value to the services
developed by the MNOs. These service providers are often referred to as third party or
value-added service (VAS) providers, as they are not an MNO or a financial institution.
Many of these companies already provide other services related to the mobile voice
market, including bulk text messaging and airtime distribution services, and are now
starting to do the same for the mobile money market. In Tanzania, at least three of
these companies are now acting as aggregators for mobile money services, Selcom,
Maxcom and E-Fulusi. They have established agreements with the major MNOs in
Tanzania that enable them to provide solutions that span across networks. This is
important in the context of this report, as both are now offering bulk payment products
that allow organizations to send money to a registered user of any of the four mobile
money service providers at the same time.
As will be discussed in more detail later in the report, many of the early adopters of bulk
payments products in Tanzania have faced the challenges due to the lack of
interoperability between mobile money platforms. When an organization decides to use
mobile payments, they usually establish a partnership with one of the four mobile money
service providers. This means that they can only send money directly into the mobile
wallet account of customers registered with that same service provider. On the contrary,
when they send money to phones that are not registered with that same service
(referred to as off-net payments), the money is not deposited directly into the person's
electronic wallet, but rather is sent in the form of a token that expires in seven days if not
reimbursed at an agent for physical cash. In addition, this token is not received if that
18
person is out of network or if their phone is off, both of which are common in rural areas.
While mobile wallet interoperability is certainly one solution to this problem, the most
immediate solution is for organizations to use third-party providers, in order to deposit
the funds directly into any mobile money wallet regardless of the MNO. Recipients still
have to own a phone and to register for a mobile wallet; however, it does overcome the
key obstacle to adoption of bulk payments, as will be more apparent in Section VII,
which discusses Pathfinders use of mobile payments to pay community healthcare
workers (CHWs.)
MNO
Customers
Bulk
Payment
Pricing
Functionality
19
CONSUMER PROTECTION
While each mobile money service provider has a different set of standard operating
procedures, each institutes their own set of internal controls to prevent fraud within the
corporate structure, amongst agents, and against clients/users. The following is a brief
overview of the general consumer protection measures that MNOs in Tanzania
implement.
Table 8: General Consumer Protection for Mobile Money
General Consumer Protection for Mobile Money
PIN Number
Customer
Care
Each mobile money provider has a customer care line separate for
users, corporate clients and agents. These customer care lines vary in
user experience, but the purpose is to avail them to report issues of
fraud, consumer challenges, and consumer protection issues.
Agent
Network
Management
Most mobile money service providers also monitor their agents closely,
as the agent is the point of contact for the customer. Providers are in
essence outsourcing customer service to a network of agents, and
therefore in order to ensure a high quality of service there must be
significant attention paid to recruitment, training, and monitoring to
ensure that agents are well prepared to manage the customer
relationship. This management is also critical to ensuring that agents
maintain a balanced liquidity of cash and electronic float, since both are
necessary to allow customers to transact. Each provider in Tanzania
uses a similar system that generally involves multiple levels of agents
(including bank branches to ensure liquidity) and regional managers to
monitor liquidity and to respond to customer complaints.
Bulk
Payments
20
21
While all organizations are concerned about the cost of cash, they expressed more
concern than implementing partners in other countries about the risks to having staff
carrying and responsible for large amounts of cash, as well as the lack of transparency
when using cash payments. As a direct result, all eighteen partners interviewed reported
that they are minimizing cash payments and have made significant efforts to reduce the
distance and time over which they transport of cash. None of these organizations are
currently transporting large amount of cash at one time over long distances from
headquarters to field offices, as they did in the past. Rather, they have found ways to
minimize the need to transport cash strategies that have their own strengths and
weaknesses, as discussed below.
The first way that most organizations minimize their use of cash is through EFT. IPs are
actively encouraging vendors, from hotels to newspaper delivery men, to open bank
accounts, if they do not already have one, to ensure that all vendors are able to accept
payment via EFT. A few of the organizations are making these EFT payments directly
from an online banking platform provided by the bank, thereby replacing the need to
write checks. Removing the need to issue and sign checks saves a significant amount
of both administrative and management staff time. In addition, EFT is a safe and secure
way to make payments. However, the use of EFT is limited by the fact that
organizations cannot always convince vendors to open bank accounts and that they
often work with vendors and participants that do not live in close enough proximity to
bank branches to receive payment in a timely manner these are the last mile payments
that are still made in cash in almost every country where USAID works.
For these last mile payments, organizations are using bank branches in the field. This is
very different from EFT because the payment is not made directly to the intended
recipient. Instead, the organization will send a finance staff member out to the field, who
is responsible for withdrawing cash from the closest bank branch and then distributing it
to the intended recipients. This is possible since, while the bank branch penetration in
Tanzania is low as described previously, there is one local bank, the National Bank of
Commerce (NBC), which operates at least one branch in each of the 114 districts in
Tanzania.
Therefore, the use of NBC (or another bank nearby, depending on the
district) can drastically reduce the need to transport physical cash across long distances.
Organizations in Tanzania report that both the costs and the challenges associated with
this strategy are significantly less than the alternative of transporting cash all the way
from the headquarters office. However, they are still concerned about the costs of time,
transport, and per diem payments for the finance officer who is required to travel to the
field to conduct the payments. They are also highly concerned about the risk of
providing one person, even a finance staff member, with access to a large amount of
money. Sometimes the money is transferred to this persons personal bank account,
which is a less than ideal scenario; other times, the person is provided access to a
company account. Either way, many financial managers reported they are not entirely
comfortable with this strategy, nor are the comfortable asking a staff member to assume
this level of cash risk.
The following section provides a more detailed look at the costs of using cash, based on
two health organizations which have already implemented the use of bank branches in
the field in order to issue per diem payments for trainings.
22
23
Organization 2
Payment Process
This organization is also conducting trainings to build the capacity of health systems in
Tanzania, and has similar processes as those described for Organization 1. The key
difference is that the policies of Organization 2 stipulate that a financial officer from the
main office is only sent to a particular training if that training requires the distribution of
more than USD 18,000 (TSH 30 million). If the total is below this amount, then the
training coordinators will issue the cash payments directly. Out of all of the training
conducted thus far, 40% have been under the limit, while the majority (60%) required a
financial officer present as they were over this limit.
Non-Financial Costs
Organization 2 also experiences a significant drain on human resources when they have
to send a finance officer to a training. When the trainings require less than the cash limit
and the responsibility falls to the coordinator, there are additional programmatic costs.
Dealing with cash takes away from the time that the coordinator has to spend on training
content and methodology, which can potentially impact the quality of the training. In
addition, the organization is accepting a higher level of risk by asking a non-financial
staff member to assume the responsibility of cash, and to account for any shortages or
overages that occur if the actual numbers of attendees varies from the estimate.
Financial Costs
24
The following is an estimate of the costs associated with one training lasting ten days,
and requiring one finance officer to issue payments. The training is in Mwanza, a region
most accessible from Dar Es Salaam by plane.
Table 10: The Cost of Cash for Health Trainings, Organization 2
Summary
The following chart shows the unit costs for the four line items for each organization that
is absorbing the cost of cash transfers, per the previous analysis. This illustrates the line
items in a program budget that are most impacted by the cost of cash transfer.
Understanding where these costs are will help all organizations to properly assess the
costs associated with cash in their current operations.
With this information,
organizations can conduct a comparison of the cost of cash in their program with the
projected costs associated with mobile payments, in order to assess the benefits of a
transition to electronic payments. The costs and benefits of electronic payments are
outlined in more detailed in the following sections.
25
Figure 3: Breakdown of the Line Item Costs of Cash Payments for Two Health
Programs (USD)
300
250
200
150
Organization 1
Organization 2
100
50
0
Finance Team Finance Officer Transport Costs
LOE
Accomodation
(Airfare)
and Per Diem
Bank Fees
26
health workers (CHW) that receive monthly stipends as well as a significant capacity
building component. They have historically used a large amount of cash in the field to
pay CHWs and to reimburse training participants. This all changed when the
organization hired a new Chief Financial Officer (CFO) who believed that the use of
physical cash was both an unacceptable risk of fraud and an unnecessary operational
cost, and therefore committed to removing all handling of cash from the organizations
operations.
The first step was to switch to EFT payments through an
online banking platform, which reduced the use of checks
Going cash-lite required
eventually to only four per month a significant time
organizational behavioral
savings for the Country Representative who reported that
change driven by an internal
he used to spend hours signing checks, whereas he can
champion committed to
now push one button on the online banking platform to
ending the use of cash in order
complete all payments at the same time. In order to
to manage risk and reduce
achieve this reduction, the organization had to advocate
costs.
for all of its vendors to open bank accounts, and even
convinced the newspaper delivery man to open a bank
account by telling him that he could only receive payment electronically.
The second step was to tackle the last mile payments those payments that could not
effectively be made through bank transfer. For Pathfinder, these payments are mainly
made to their network of 3,500 community health workers (CHWs), who support efforts
to improve health systems at the community level. CHWs attend initial training and then
annual one-day refresher trainings, and receive USD 27 (TSH 45,000) in per diem to
cover the cost of attending each training. They then receive a small, monthly allowance
of USD 15 (TSH 25,000) to support their efforts in the community (CHWs in Tanzania,
and many countries, work as volunteers and are not salaried employees.) This totals at
least US 724,000 or TSH 1.16 billion in cash payments per year.
Pathfinder could have used a security company to deliver these payments in cash.
However, their initial assessment found that this option was too expensive. Therefore,
they set up a partnership with Vodacom to use M-Pesa to make these payments. It is
important to understand how extraordinary this decision was in 2010. At the time, there
was only one mobile money provider in Tanzania, usage rates were still low, and few if
any non-profit organizations were using mobile money for bulk payments. Pathfinder
has been a trailblazer, and their work with Vodacom to improve the bulk payment service
27
over the past three years has paved the way for other organizations to benefit from
these services as well.
Pathfinder started first using mobile money to pay CHWs in the urban center of Dar Es
Salaam, and eventually scaled up so that all CHWs nationwide are receiving payments
this way. They are now making as many as 12,000 payments per month, which qualifies
the organization one of the largest Super Users of M-Pesa in Tanzania. As they
expanded the program, they continually modified their Standard Operating Procedures
(SOPs) for making payments, learning through trial and error how to ensure that all
payments are delivered securely to the intended recipients.
Costs and Benefits
Pathfinder has not been able to do a full cost analysis of the M-Pesa program, because
of a lack of time and resources to do so. However, the Country Representative
recognizes that the use of mobile payments has allowed them to scale their program if
they were making the payments in cash, they simply would not have been able to train
so many people at once. With M-Pesa, all payments are issued and approved by two
finance team members located at the head office. With cash, they would have to send
finance staff to the field, paying for transport and accepting a much higher level of risk.
For example, the Country Representative remembers sending finance staff out to the
field with large sums of cash. For security reasons, finance staff members were forced
to sleep with the cash hidden within their pillows or take other extraordinary measures to
ensure the safety of the cash. Now, this money is sent in electronic form, directly to the
mobile phone of each participant. Pathfinder does not transport any physical cash at
any point, and participants have gained access to basic financial services, as they are
learning to use and store money in their mobile wallet.
The key successes of the
initiative, as described by Pathfinder, are:
Pathfinders efforts to go cash-lite have not been without obstacles and challenges. The
organization has learned through trial and error, and both the management and staff are
committed to troubleshooting and to ensuring that all payments are complete. The
commitment to learning and continually modifying processes and procedures is a critical
part of Pathfinders success. The following is a summary of the main challenges that
Pathfinder has faced, as well as an overview of some of the creative strategies that they
have developed to continue to scale.
28
Full support from Senior Management and a CFO who championed the need
for cash-lite operations.
29
2.
3.
4.
5.
Buy-in from internal staff was critical in hindsight, they would have benefited
from having all staff use the system first, as understanding of internal staff
(especially field staff) is critical to recipient understanding and training.
New SOPs: Electronic payments required an adjustment on the part of the
finance staff, and they adapted their standard operating procedures to better
fit the mobile payments modality. It was important for the staff to stay flexible,
and continue to receive support from key leadership as instituting behavior
change can be challenging.
Time and staff devoted to troubleshooting. Because the organization was
committed to going cash-lite due to the risks associated with cash, they have
worked through challenges with M-Pesa and found creative solutions to
issues.
A devoted point-of-contact in the mobile money operator to support in the
scale-up of the initiative.
30
The main challenge for D-Tree is that they do not have visibility into the transactions of
the TBAs, and therefore cannot confirm when they have withdrawn money or paid the
taxi driver. This is a common complaint from implementing partners. There is a good
reason for this lack of visibility: mobile wallets are personal accounts that facilitate a
variety of financial transactions and therefore transaction history is private to the
individual account holder (much in the same way that an employer in the United States
could not access an employees bank account.) These mobile wallets can be used for a
number of different transactions beyond those controlled by the program.
However, Zantel has offered D-Tree a solution. The organization and the TBA can
register for joint accounts, which work in a similar way (from technology standpoint) as
the accounts for Super Agents and sub-agents. Super Agents and sub-agents have
linked accounts, since the Super Agents manage sub-agents and their funds, and
therefore the Super Agents needs to view the account balance and transaction activity of
the sub-agent. Using a similar arrangement, D-Tree can register for a master account
and the TBAs can register with sub-account, directly managed by D-Tree. In this case,
the TBA is able to open a personal, individual mobile wallet with a provider of their
choice if they wish to make private transactions, which will remain separate from the
sub-agent account established purely for the D-Tree program. This is a reasonable
option for an implementing partner to explore who would like more visibility into the
transactions of their employees or participants with whom they have an on-going
relationship.
31
microfinance institution (MFI) which recently because the first existing MFI to receive a
license to take deposits24. The institution has 23 branches across the country, and 90%
of their loans are under USD 1000 (TSH 1,637,000).
Reaching this level of scale took a significant amount of planning and upfront investment.
FINCA began due diligence in January 2012, at which point they decided to partner with
M-Pesa based on an assessment of client preference. After initial talks with M-Pesa,
they signed a contract in April 2012 and started a three-month pilot using manual
processes. By that summer, they had completed a full integration of their own
accounting system with the M-Pesa system25.
Automation is a very significant achievement. It provides a much higher level of internal
control by eliminating the risk of human error in the accounting process. When a client
makes a repayment via M-Pesa, the client enters their own account number, and the
system can automatically credit their account with the repayment. This process became
even easier when M-PESA put FINCA directly onto the bill payment menu when an MPesa client selects the bill payment option on the mobile phone, they can a see a list of
companies that accept bill payments, one of which is FINCA. This means that clients
only have to remember their own account number, where in the past is was also
necessary to remember an additional identification code for FINCA.
However, FINCA found that a risk still existed: the manual transfer of money from MPesas bank account to the FINCA bank account during the settlement. Therefore they
set up a division of tasks, requiring three separate departments to approve this type of
transfer. This division of labor provides adequate mitigation against the risk of any one
employee disrupting or diverting this transfer.
Like Pathfinder, FINCA has yet to devote time and resources to a full cost analysis.
However, they are clearly seeing financial and non-financial benefits, as summarized
below:
Cost Savings: Rural clients use The M-Pesa repayment option most frequently.
These clients, who do not live close to a branch, were previous making
repayments at a different bank, which caused significant delays and was highcost. FINCA is confident that these savings will translate into lower interest rates.
Client benefits: Group meetings are shorter and clients feel more secure not
having to bring cash to meetings; at the same time, there has been no noticeable
impact on group solidarity. FINCA reports that they have received no complaints
at all from clients using the service.
Ability to Scale: 1 branch costs USD 100,000. In a country as large as Tanzania,
reliance on a branch network would severely restrict ability to scale, especially in
rural areas. With mobile repayments and future options for agency banking,
FINCA plans far beyond the clients who are convenient to their 23 branches.
24
Entrepreneurs Finance Centre received the first such license; however, they were not previously
operating in Tanzania.
25
The technical support for this automation was provided by Craft Silicon, a Kenya based company.
32
RECOMMENDATIONS
IMPLEMENTING PARTNERS
Through USAIDs commitment to the BTC Alliance, USAID is encouraging the transition
to electronic payments (including mobile money) in all USAID programs and operations,
where appropriate.
To do so, USAID is providing a variety of resources to assist
implementers in conducting proper due diligence to determine if electronic payments are
appropriate and beneficial to their program, and if so, which form of electronic payments
are most suitable (EFT, mobile payments, or card-based payments, for example.)
In Tanzania, where mobile money usage is growing rapidly and the USAID Mission has
expressed strong support for implementers to transition to mobile payments, where
appropriate, we recommend the following steps. These steps are comparable to the
steps suggested in a similar review document developed for Uganda, but may be
different in countries with less developed mobile money markets and/or with a USAID
Mission with different objectives.
33
Table 12: Suggested Due Diligence Activities and Tools for Implementers
Activity
Reference Document
Available
1
N/A
Demystifying Electronic
Payments: Lessons
Learned From Pathfinder
On Transitioning Away
From Cash28
34
35
benefit analysis of their internal operational costs, both financial and non-financial. In
addition, organizations need to ensure buy-in from all levels, including management and
field staff, and be open to modifying financial and administrative SOPs in order to adapt
to the new payment method.
Organizations who are using the bulk payments product at this time are early adopters,
and their communication with the mobile money service providers is helping to improve
the service and grow the mobile money ecosystem in Tanzania. They are not alone in
this effort. The Bank of Tanzanias National Payments System team is also supporting
growth by drafting thoughtful guidelines for both mobile money and agency banking.
USAID/Tanzania and other donors can also help by encouraging implementing partners
to explore mobile payment options through hortatory procurement language, technical
assistance, facilitation of partnerships, and support of innovation through value-added
services.
USAID recognizes that each implementing partner operates in a different country and
context, and those solutions that work in one place may not be beneficial in another.
Tanzania is one country where there is a clear opportunity to leverage mobile money for
payments to counter the challenges with cash. Through its commitment to the BTC
Alliance, USAID will continue to work with local partners to examine how electronic
payments solutions, including mobile money, can improve aid effectiveness in their
particular situation.
36
Organizations
Airtel
Tigo
Vodacom
EFC
FINCA
Standard Chartered
Price Waterhouse Cooper
BRAC
Smart Money
Selcom
Kopo Kopo
Go Finance
Bank of Tanzania
USAID/Tanzania EG
USAID/Tanzania DG
USAID Tanzania EDU
USAID/ Tanzania Health
WFP
Gates Foundation
Financial Sector Deepening Trust
ACDI/VOCA
Care
Creative Associates
D-Tree
Datavision
Deloitte
Elizabeth Glaser PedAIDS Foundation
IMA
Intermedia
Intrahealth
Jhpiego
JSI
MEDA
Mkapa Foundation
PASADA
Pathfinder
Technoserve
WWF
Financial Institutions
SMEs
Government
Donors/NGOs
37
Organizational Objectives
Target geographies
Target populations types
What are your average transaction
frequency and amounts?
What are all of the areas within your
work where you must send and receive
money to individuals?
To organizations? What types of
organizations?
How are you currently processing these
payments?
Did you need to partner with and MNO
rd
or other 3 party vendor?
If yes, what was this experience like?
Were you able to negotiate bulk or
special rates for your organization?
Can you describe obstacles to this
change? Political, technical, training,
other?
How did you determine the level risk
associated with the new program?
Did you change the prices of your
products/services as a result?
How did you educate
consumer/beneficiaries about the
change? Do you have any lessons
learned as to how to best approach this?
How do you find the new system?
Are the back-end reports sufficient?
Have you received feedback from
employees/clients/beneficiaries?
38
39
40
B. Vodacom M-Pesa
41
C. Airtel Money
42
FINANCIAL DOCUMENTATION
IN THE USE OF ELECTRONIC PAYMENTS
REFERENCE TOOL
43
I.
Introduction
Electronic payment systems can be safer, faster and more cost effective than
cash disbursements. Various electronic payment systems are emerging in the
developing world that have the ability to potentially alleviate administrative burdens on
program operations as well as accelerate financial inclusion for billions of people who
would otherwise have no access to financial services. Increased innovation in this arena
has brought real and feasible electronic payment products to down market populations.
There are a variety of electronic payment methods available today and some
examples include electronic funds transfer (EFT), point-of-sale (POS) devices used in
conjunction with pre- and post- paid credit, debit and/or smart cards and more recently
mobile money.
i.
ii.
iii.
Electronic funds transfer this is the most popular form of funds transfer
originated by a bank when it transfers funds electronically to the bank account of
the recipient.
Point-of-Sale Devices with pre-/post-paid debit/credit cards and/or smart cards
Card-based payment systems utilizes magnetic stripes to store financial and
identification information that end users can swipe via a POS terminal. Cards
can be pre paid, meaning they have a pre-loaded value, or post-paid meaning
your payment will be reconciled at a date in the future.
Mobile Money - These are money transfer services usually offered by Mobile
Network Operators (MNOs) as seen in countries like Kenya, Haiti and
Afghanistan, or as a value-added service offered by banks (sometimes in
partnership with an MNO), or by third-party service providers typically
independent from any specific bank or MNO
II.
The scope of this guidance is to focus on the audit trails available when an
organization decides to utilize mobile money systems for payment in order to ensure
that the transactions are properly tracked, reported, and validated. As used here, an
audit trail is any information, paper, digital or electronic, that can be used to capture,
record, or recreate the events in the life cycle of a mobile money transaction.
An audit trail should answer questions such as:
1.
2.
3.
46
As part of the registration process, some MNOs ask for the names of at least two
separate individuals within the organization, sometimes three or more, to act in the
capacity of Maker ,Checker and Verifier (others refer to it as the Initiator,
Authorizer and Administrator or Validator, Verifier and Confirmer the options
are varied).
The Maker is the designation for the individual who prepares and uploads to
the MNO systems the file containing the names, mobile numbers and payment
amounts for all individuals the organization desires to pay via the mobile money
system.
The Checker is the individual who verifies that the information loaded by the
Maker is accurate,
Most times, there is also the Verifier who actually authorizes the payment.
47
In the cases where the MNO requires multiple names on the account, each
individual is assigned a unique user name for the web based payments platform, with
their designated assignments, which dictates the level of functionality their account has
on the platform. Once the registration process is complete, the organization has
successfully set up a corporate account with the MNO and can begin the process of
making bulk mobile money payments.
Some MNOs allow its mobile money registered users to transfer mobile money to
mobile phone users on competitors networks, however, the recipient will typically need
to register with the MNO of the originating transferor in order to withdraw or transfer
funds or if registration is not required, s/he may pay a higher withdrawal or transfer
transaction cost. As such, most entities performing bulk payments will usually require
prospective recipients to register with the MNO whose mobile money transfer platform
they intend to utilize. This has the effect of lowering transaction costs for the payer
and/or receiver. Although this hasn't happened in Tanzania as of yet, some MNOs have
partnered with banks such that, at the point of registering for the MNOs mobile money
system, the user is also opening a bank account. This gives users the ability to withdraw
cash from the MNOs registered agents and also directly at the banks branches and at
its ATMs. Users are also required to set up personal identification numbers in order to
access any cash payments made to their mobile phones and to protect their mobile cash
balances.
Several countries, including Afghanistan, Haiti, and Kenya are already utilizing
mobile money systems ranging from the bank-led to the MNO-led models. Many banks,
as a value-added service to corporate customers, will perform the back office functions
typically performed by the payroll staff of the organization, and make bulk payments
through the MNOs systems to the individual recipients whose names and mobile phone
numbers have been provided by the organization. Some entities through its payroll staff
will directly interact with the MNOs to make bulk payments. Each model will typically
produce the same type of back-end report, which is an MNO report showing the
individuals paid, the amounts, their mobile phone numbers, and their transaction
confirmation numbers.
i.
The below are best practices and standards for bulk payments product, and do not
necessarily mean that each service provider will have all the functionalities listed below.
The list below should be used as a benchmark for organizations when scoping potential
bulk payments products.
1. Collection The organization collects the names, mobile phone numbers and
other information from the prospective recipients and captures the information
on a spreadsheet.
48
49
The identification codes for the individuals within the organization who
acted as Validator, Verifier and Confirmer for the bulk payment
transaction
The total amount of the payment
The total fees
Name of recipient
Mobile phone number of recipient
Amount paid to recipient
Charges if any
Status (completed, in progress)
Payment Status (Paid, Not Paid)
Transaction Code (some MNOs create a unique transaction code for each
recipient payment made, while other MNOs can identify each transaction
made by using the just the mobile phone number.
III.
Conclusion
Electronic payment systems are dynamic and undergoing rapid change and
innovation. Paypal and other internet based payment schemes are not discussed here as
such, any changes to the books and records produced, maintained and preserved for
and by the organization for audit trail purposes must be clearly documented, including
the changes required due to a rapidly evolving landscape, in order to ensure clarity and
continuity during any examination process.
50
Example Screenshots
Fig. A. Example of validation report for transfer summary using Yo! Payments as well
*The Warnings column shows where unregistered clients are and warns that there may be an issue with the
payment before sending it.
Fig. B. Example of Tanzania Tigo Pesa's Bulk Payments upload screen where you
upload .csv document that contains the list of payment recipient information
51
Fig. B.1. Example of Airtel Money Uganda screen showing payment information
uploaded, the status allows you to see before sending the payment what accounts will
not work.
52
Fig. D.1. Example of Uganda Airtel Money completed transaction report screen
53
54
55
2. What are the transaction costs for sending bulk payments? Do the costs differ if
the recipient is not a registered user or is registered to a different mobile
money service?
Note for all: Transaction fees for sending bulk payments are only one side of
the cost, withdrawal fees may also be imposed and should be considered
when sending payments to registered customers. The normal withdrawal
fees found on the tariff sheets of each service provider apply. See Appendix 1
for links to the providers tariff information.
Airtel:
Airtel charges a flat fee of 200 Tsh per transaction for sending bulk
payments.
Airtels fee structure for sending payments to someone not registered
on the Airtel network is set forth in the table below. The prices are
tiered based on the transaction amount:
Cost per
transaction (TZS)
Type of customer
Unregistered
Range
1,000
9,999
550
10,000
19,999
1150
20,000
49,999
1200
50,000
99,999
1,900
100,000
199,999
2,300
200,000
299,999
3,500
300,000
399,999
5,000
400,000
499,999
6,000
500,000
1,000,000
6,500
customers
56
Vodacom:
Transaction Cost
1,000
9,999
550
10,000
19,999
1,000
20,000
49,999
1,200
50,000
99,999
1,900
100,000
199,999
2,300
200,000
299,999
3,500
300,000
399,999
5,000
400,000
499,999
6,000
500,000
1,000,000
7,000
57
How long does the recipient have to cash out? A non-registered payment
recipient has up to seven days to cash out a deposit.
Where does the money go once it expires? The funds are returned to the
sender29 Alternatively, subject to knowing the token, the funds can be
retrieved by the sender from an Airtel Money agent.
Can I send payments to customers on different networks at the same time,
or do I have to send in batches according to the recipient's network?
Using the bulk payments process, transactions can be sent at the same
time in the batch mode irrespective of the recipients network.
Tigo:
Vodacom:
How long does the recipient have to cash out? A non-registered payment
recipient has up to seven days to cash out a deposit.
Where does the money go once it expires? After the seven-day period, the
funds are returned to the Sender.
Can I send payments to customers on different networks at the same time,
or do I have to send in batches according to the recipient's network? If an
organization is paying the withdrawal fees, Vodacom recommends
separating payments to numbers registered with other MNOs and
Vodacom numbers. This makes it easier to apply the specific withdraw
fees associated to on network and off network transactions. If the
organization is not absorbing the withdrawal fees, then an organization
can easily combine both on network and off network transactions onto
one batch.
In interviews with users of both M Pesa and Airtel Money bulk payment services users, it was
noted that the fund recovery process was more complicated than expired funds simply being
returned to the sender's account
29
58
4. Do you offer any discount on fees for non-profit organizations or for large
volume customers?
Airtel:
Tigo:
Vodacom:
5. Can your customers send multiple payments (bulk payments) directly from a
mobile phone?
Airtel:
AirTel currently does not offer the ability to make bulk payments from a
mobile phone.
Tigo:
Tigo customers can initiate bulk payments (by initial file upload) through
Tigos web interface. Customers can access the web interface through a
smartphone web browser making bulk payments possible from a mobile
phone.
Vodacom:
Vodacom currently does not offer the ability to make bulk payments from
a mobile phone. The bulk payment system is web based.
59
6. What is the process and timeline for opening a corporate account? Does an
organization need an account with the MNO or with a specific bank?
Airtel:
Opening a corporate account with Airtel can take up to five working days
subject to the provision of all applicable documents. The documents
Airtel requires are similar to those needed to open a bank account. Airtel
will open a mobile money account for the organization; this mobile
money account will be housed on the Airtel Money platform, although it
will be managed entirely by the respective organization.
Tigo:
Vodacom:
7. Does your system allow for dual authorization, much like a check requiring
two signatures?
Airtel:
Airtels system has a provision for maker and checker in the batch
creation module. The maker has to log in with the username and
60
Tigo:
Vodacom:
Airtel does not have a stipulated customer care policy. Airtel does offer
corporate customers front line support by assigning each corporate
account a dedicated Key Account Manager to whom all queries and
concerns can be raised.
Tigo:
Tigo has a corporate sales division that assists in any high level queries
from organizations. Tigo also has a customer care department to resolve
any issues experienced in the market.
Vodacom:
9. What level of support are you able to provide in terms of training, setting up
new internal procedures, and reconciliation of accounts?
Airtel:
Airtel offers full support to corporate customers through its Key Account
Manager (KAM). The KAM is responsible for setting up the corporate
account, training, and is empowered to address queries related to
reconciliation based on the reports that are system generated. In
addition, all other errors or difficulties faced by corporate clients when
using the Airtel Money application can be addressed to their KAM.
Tigo:
Tigo provides organizations and their relevant teams with the necessary
support and training to effectively perform the bulk disbursement
transactions. Tigo also provides the necessary reports to effectively
reconcile accounts.
Vodacom:
10. What kind of report is available for bulk payments transactions? How long does
it take to get the report of transactions?
Airtel:
Tigo:
62
The reports can be requested through Tigos web interface and are
immediately available on the platform.
Vodacom:
Vodacom keeps a record of the uploaded bulk file remains in its system.
Organizations can choose the timeframes to view transactions. Vodacom
also can generate reports to view individual transactions.
11. Once the corporate client transfers money from a bank account to the Mobile
Money account, when are the funds available to make a bulk payment?
Airtel:
Tigo:
Vodacom:
Vodacom monitors its accounts every two hours for deposits. Vodacom
recommends corporate clients notify M-Pesa when a deposit has been
made for ease of tracking. The availability of funds on Vodacoms system
for bulk payments depends on the originating bank for the funds.
Typically, funds are available within twenty-four hours.
63
12. What policies do you follow to comply with Know Your Customer (KYC)
requirements and to monitor transactions for possible money laundering?
Airtel:
Tigo:
Vodacom:
Agent Networks
13. How many agent locations do you have? How many are active (have completed
a transaction in the last 30 days)? Why is there a discrepancy between these
two numbers?
Airtel:
Vodacom:
14. How do you address issues of agent liquidity, especially in rural areas?
Airtel:
Tigo:
65
Vodacom:
Rural Coverage
15. Do you have any specific products or partnerships in place to support farmers
and/or agricultural value chains?
Airtel:
Tigo:
Vodacom:
Vodacom is working with farmers and the agriculture sector through its
work with Care International and the Village Savings and Loans groups in
Arusha.
16. If an organization is working with rural populations, farmers, or agribusinesses operating in areas without coverage, is it possible for you to increase
coverage? If yes, how fast can we expect increased coverage?
Airtel:
66
Tigo:
Vodacom:
Troubleshooting
17. How can the payer recover funds sent to the wrong account? How long does
this process take?
Airtel:
Airtel requires that the payer notify Airtel of the transaction details
immediately upon discovery that the funds were sent to the wrong
number. The reversal can take up to seven days subject to compliance
with Airtels internal process for reversals of incorrect payments.
Tigo:
provided that the funds have not yet been cashed out. Tigo usually
requires permission to return funds from the unintended beneficiary
similar to the process for reversing an incorrect bank transfer
Vodacom:
18. What kind of fraud is common in your business? How have you or are you
seeking to minimize the risk of fraud?
Airtel:
Tigo:
Vodacom:
21. How can a corporate account receive funds from an individual (i.e. C2B)?
Airtel:
Tigo:
Vodacom:
69
22. Are there any plans to develop applications for smartphones, such as Android
or iOS?
Airtel:
Airtel does not have any immediate plans to develop applications for
smartphones, however, it does not rule out the possibility of development
subject to customer demand and requirements.
Tigo:
Vodacom:
Vodacom does not have any plans, at the moment, to develop smartphone
applications.
23. Do you provide a function that enables the payer to restrict funds to certain
uses (in other words, do you offer coupons or e-vouchers?)
Airtel:
Tigo:
Vodacom:
http://www.africa.airtel.com/wps/wcm/connect/africaairtel/Tanzania/AirtelMone
y/get_airtel_money/tariff/
Tigo Pesa:
http://www.tigo.co.tz/pesa_tariffs.php
Vodacom M-Pesa:
http://www.vodacom.co.tz/vodacom-m-pesa/customer-tariff
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