This archive report was first published on 22 August 2019.
On August 22, 2019, George Bodo wrote about the benefits of mobile infrastructure sharing in the telecommunications industry.
According to Bodo, players in the sector already share resources in the broadband space by buying each other's redundancy. This allows affected operators to re-route services to another operator who has not been affected on a commercial basis.
Even the payments space is not being left behind in terms of infrastructure sharing. Visa, a global payments technology company, announced a project to establish an agent switching scheme involving six commercial banks.
Behind the scenes, the owner of a single device runs all the numbers and determines who owes who money and does the settlement. This has been touted as the future of infrastructure sharing in the agent banking system.
Analysys Mason found significant market power in the mobile money retail market in Kenya, leading to the adoption of wallet-to-wallet interoperability. However, operators need to scale this up by allowing agent interoperability.
Implementing agent interoperability can be a simple mechanism. Operators agree to the idea, appoint a single bank to act as the clearing agent, and re-work their back-office.
The clearing bank determines who owes who money through a series of netting off at the end of a clearing cycle. The person owing is debited, and money is credited into the entity owed money. Applicable fees are also loaded into the netting off system.
The clearing bank can also provide a centralised float system, allowing agents to recharge their floats from the same bank. This places the customer at the centre and is not a far-fetched proposition.
