Welcoming the New Kid on the Block — My take on Mowali
If you are in the mobile money industry in Africa you have probably seen articles and chatter regarding MTN and Orange’s announcement of their interoperability project in West Africa, Mowali. You can read the press release here. We have been following this developing project for some time, and have even participated in some of the working group discussions around its conception.
What does this mean for MFS Africa?
To start with the obvious: yes, the Mowali project does represent competition for us, and a likely loss of market share on some of the francophone West African corridors in the next few years. MTN and Orange continue to be MFS Africa partners for a range of services, but of course as the project becomes operational, we expect them to use Mowali for transactions between the two of them. While we would love for every mobile transaction to pass through our MFS Hub, monopoly has never been a realistic goal, nor has it ever been the case. The payments hub game has always been a ‘game of few’ — one provider is too risky; many providers are too fragmented. On a three- to five-year horizon, and assuming Mowali is executed well enough, it could become a significant player in the Hub market alongside ourselves, Homesend, TransferTo, and TerraPay.
With all of the donor-funded regional interoperability initiatives (Mowali’s technology is funded by the Gates Foundation) we’ve seen come and go in the last three years, we knew it was only a matter of time before one of them gained traction. We have been connecting mobile wallets to enable international remittances since 2012, and mobile-to-mobile regional payments since 2014, and in that time we have seen a number of formidable players enter and leave this space.
One of the clearest lessons we’ve learned in the past eight years is that the technical solution is only part of the answer. For an interoperability hub to succeed, operations, treasury, product development, and compliance are equally if not more critical. With a sharper spotlight on interoperability in the industry, we will continue to focus our efforts on those critical fronts: maintain a world-class back office, delight our partners with relevant products and services, and lead the industry in compliance.
What does this mean for mobile payments more broadly?
Mowali’s announced entrance in many ways also represents a validation of MFS Africa’s goal of universal mobile payment interoperability, which is increasingly shared and embraced by our partners. The mobile payment industry is accelerating towards our vision of a world in which any mobile payment user can transact freely with anyone else, simply and seamlessly. The Mowali project, if successful, will accelerate the realisation of the vision by creating efficient pathways between MTN and Orange that we and the whole ecosystem can take advantage of. And in the end, the African consumer will be better off.
We didn’t start this journey because we thought it would be easy; we started it because we knew that it is critically important. While we take the long view and celebrate the industry’s evolution and the associated wins for financial inclusion in Africa, we are also keeping our focus on the challenge ahead. And as we scan the horizon, we are also reflecting on our own participation in upcoming industry shifts, whether through strategic partnerships or consolidation. Mowali’s entrance will most certainly accelerate consolidation talks in the space.
As we enter this new phase of the industry, I warmly welcome Mowali and wish them well on the journey. Let’s make sure that through our collective work, Africans come to take making a cross border payment through a phone for granted, the same way we do now for cross border calls or messaging. Let’s make borders matter less. Let’s unleash possibilities. And let’s enjoy the ride there!
