Mobile money services must innovate to be sustainable - Tigo
By Tom Jackson, South Africa
Mobile money services must continually be innovating if they are to make their business sustainable in the long-run, according to Diego Gutierrez, general manager of Tigo Tanzania.
Gutierrez told the AfricaCom conference in Cape Town even though the mobile money market in most African countries was sizeable - Tanzanians transact US$120 billion in a year by mobile money - innovation was crucial to make the business a long-term success.
“Initially mobile money services were rolled out by the MNOs as more of a churn reduction tool,” he said. “But it comes at a good time when voice revenues are under pressure. Now that we have established mobile money services to make it sustainable we need to take the customers on a journey of innovation. If you want to make the business sustainable you have to keep creating new solutions.”
Tigo Tanzania has launched a number of new innovations in the past few months, including the September launch of Tigo Wekeza, the world’s first mobile money service that allows customers to earn automatic returns on their balance. The service allows users to earn returns direct to their wallets without the need for a separate registration.
But it was the August launch of the world’s first interoperable mobile money service that gained the most attention, with Tigo partnering with Airtel to allow customers send and receive between Airtel Money and Tigo Pesa in Tanzania.
“In order for interoperability to work there must be the tech integration, but there needs to be a model where there is no differentiation in the amounts you pay an operator. It must be seamless for the user. As long as the charges are similar, it should be a model that works, but there needs to be communication and education.”
Gutierrez said this had been possible because the banks understood that mobile money service providers were helping rather than hindering them.
“Interoperability is something that has already happened in our market. I think that banks have understood that model, they don’t see us as threats, they see us as vehicles to reach others,” he said.
“When we talk about MNOs and banks we say it's not competing but completing, because you are approaching a group of people the banks are not accessing.”