The central banks of four East African countries are conducting a study that will set the baseline for money transfer fees across the region.
Heads of state in Uganda, Kenya, Rwanda and South Sudan in a June directive ordered individual bank regulators to study money flows in mobile platforms and state how harmonisation of the rates could affect the flow.
“The central banks are spearheading the study to inform the provision of mobile financial services in the region,” said a Northern Corridor Integration Project Summit Authority statement on Friday.
Through the One Network Area Agreement, ICT ministers of the four countries have arranged with finance ministers and central banks to review the report together once it is complete.
ICT Cabinet Secretary Dr Fred Matiang’i said that individual operators from the countries involved in the survey have been asked to negotiate an inter operator rate for money transfer.
The study will assess technologies applied in mobile money in respective countries, how secure it will be to harmonise the rates and have regional money transfer provisions.
LOWER RATES
It will also explain the legalities involved in the changes that are expected to take place. Consumers are also to be notified of the benefits of harmonisation of the rates compared to the demerits.
“Central Bank of Kenya, Bank of Uganda, National Bank of Rwanda and Central Bank of South Sudan are all attending the eleventh Northern Corridor Integration Projects Summit, to explain to the heads of state, how cross border money transfer can be made possible at lower rates,” said head of the NCIP authority in Kenya, Mr Joseph Nyaga.
Harmonised mobile money rates are likely to come through by close of 2015. It will enhance international remittances between say M-Pesa, Airtel, and Telkom Kenya through to MTN mobile money customers in Uganda, Rwanda and South Sudan.
“We want you to be able to move money from your M-Pesa account here to a relative in Kigali and vice versa or from Airtel Uganda to Safaricom in Nairobi,” Dr Matiang’i said.
Central Bank of Kenya said that Kenyans transacted Sh418 billion via mobile phones in the past two months. The deal could be a loss to regional telecommunication firms such as Safaricom, who are making money across the region through international money transfer deals.
