This week, the eagerly anticipated inter-operability of mobile money schemes in Ghana is scheduled to commence under the supervision of the Bank of Ghana and its dedicated electronic money facilitation subsidiary, the Ghana Interbank Payments and Settlements Systems.
But even as the users of the estimated 24 million mobile money accounts evaluate their options under a new dispensation where they can transfer money through their mobile phones across different networks – hitherto mobile money transactions have only been possible within each network – the telcos themselves are preparing for what may be the most ferocious dogfight for market share since mobile telephony was first introduced in Ghana over two decades ago.
While the number of mobile money accounts at 23.95 million as at the end of 2017 still lags far behind the number of voice telephony accounts, at 37.445 million as at September last year, the former is easily the fastest growing segment of telcos activities; the value of mobile money transactions grew by 98.5% last year to GHc155.8 billion, up from GHc78.5 billion in 2016, while the amount held in mobile money accounts as at the end of 2017 was GHc2.3 billion, up 84.6% over the GHc1.3 billion held in such accounts a year earlier.
However, this market, up till now has been overwhelmingly dominated by MTN with 93.5% market share as at October last year. This is because MTN has for long had a critical mass of mobile money service subscribers and since transfers have not been possible between different networks, nearly everyone wishing to use mobile money services have therefore opted for MTN since that is the only network where transactions are possible with virtually every one else.
As inter-operability begins this week however, this situation will change; every mobile money user, no matter his or her network’s platform will be able to send money to and receive money from every other mobile money service user. This will take away MTN’s huge advantage and all the other networks are eagerly gearing up to take advantage so as to win substantially bigger market shares than they have currently.
In 2017, mobile money contributed 15% of MTN’s revenues; none of its competitors got up to 10% of their (much smaller) revenues from this activity segment, a situation which they are all now looking to change.
Customers stand to gain immensely from the impending fierce fight for market share as inter-operability opens up the market. Already, in a bid to stave off the impending competition, MTN is establishing self service points akin to ATMs for the convenience of its customers. It has also entered a collaboration with AFB, one of the biggest and most sophisticated micro financiers and payroll lenders in Ghana to introduce a new product called “quick loan” the first product that allows customers to take short term unsecured loans, processed, approved and disbursed by mobile phone in a matter of hours.
The competing networks that offer mobile money – Vodafone and Airtel Tigo – can be expected to follow suit as the opening salvos in a market war that will extend to pricing in terms of both tariffs on transactions and the interest rate offered on account balances.
Already there are fears that MTN, in its bid to defend a market share that is sure to decline somewhat, will deliberate try to sabotage transactions between its own network and other networks. However, MTN chieftains assure that this will not happen and the sanctions they would incur would be more costly than any market share they stand to lose anyway.
From this week, mobile money customers in Ghana will begin to enjoy a new era of significantly better value for money.