Coming soon to Rwanda: Mobile money transfers across networks

Monday July 23 2018

Tigo Rwanda, Airtel and MTN have agreed to interlink their money services. FILE PHOTO | CYRIL NDEGEYA | NMG


Mobile money subscribers in Rwanda can expect lower transaction costs and convenience as telcos move to integrate their systems.

Airtel Rwanda, Tigo Rwanda and MTN are seeking regulatory approval to roll out cross-network services like their counterparts in Kenya and Tanzania.

These approvals will set the stage for the telcos to start commercial negotiations, agree on transaction tariffs and sign agreements with an independent switch provider, enabling them to embrace mobile money interoperability or the ability to offer services across networks.

Analysts say mobile money services in Rwanda have not been fully exploited, partly because of the high costs of transactions. A typical off-net transaction requires an agent to transfer money to another account, which comes with extra costs.

Once operational, mobile money interoperability is also expected to deepen financial inclusion an agenda the government hopes to achieve.

For years, the National Bank of Rwanda has been pushing for interoperability but the players have failed to agree among themselves.


Analysts say that in most markets, the players usually move to protect their share and investment.

For example, while Tigo Rwanda and Airtel interoperated Tigo Cash and Airtel Money, they faced resistance from MTN Rwanda, which refused to link them to its MTN Mobile Money. Now MTN has agreed to interlink its services with the two rivals.

The letter was written on July 12, according to the MTN Rwanda head of mobile money Arthur Rutagengwa.

However, The EastAfrican has leant that by Wednesday last week, the central bank had not received it.

“The telcos are only planning to deliver the letter,” a source at the National Bank of Rwanda said.


The government is keen on linking mobile money operators and financial institutions in order to capture the financially excluded population.

Rwanda has chosen a spokehub model of interoperability, where an independent investor runs a switch that facilitates off-net mobile money services.

“The spokehub model has the advantage of economies of scale. We are not only linking mobile money operators but also banks and microfinance institutions,” said the director of payment systems at the National Bank of Rwanda, John Karamuka.

He described the model as comprehensive and inclusive since people at the bottom of the pyramid can use the service without incurring high costs.

RSwitch, a national e-payment service is already connected to all banks in Rwanda, meaning that it will add a layer for the financial institutions and mobile money network operators to deal with each other.

Using RSwitch is expected to result into a direct saving for telcos and financial services providers since they will save on the huge investments in systems and equipment needed for mobile money interoperability.

“Financial institutions will only invest in the front desk of their systems translating into much lower transaction fees for the consumer and also a seamless user experience,” said RSwitch CEO Jean Claude Gaga.

Rwanda will become the third country in the East African Community to roll out interoperability of mobile money after Kenya which went live in April 2018.

Currently, mobile users in Kenya can send money between the country’s largest networks — Safaricom and Airtel.

The challenge is that the country is only implementing platform-level interoperability, leaving out agent-level interoperability. Agent interoperability permits agents of one service to serve customers of another service and customer-level interoperability permits customers to access their account through any SIM card.

In Tanzania, the service started four years ago, positioning the country as the most mature in mobile money interoperability in Africa.

Rwanda is racing against time to catch up with its neighbours ahead of the launch of an EAC-driven mobile money interoperability project.

The regional project is expected to complement private initiatives and boost bilateral linkages between mobile money operators in Tanzania, Kenya and Rwanda.

For example, MTN Rwanda, MTN Uganda and M-Pesa are linked through MSS-Africa, which is hosted in Mauritius. Airtel has its own hub located in Nairobi. There are different platforms across the EAC.