Electronic  payment systems, like mobile money services, have become one of the most convenient ways of paying utility bills, as well as sending money to the remotest village and buying top-up airtime. From students to the working class, traders, and peasants, anyone with a mobile money service registered cell phone number is one only an agent-away from receiving their cash.

Things have become even better with the introduction of cross-border mobile money transfer services by all local telecom firms Tigo (Rwanda/Tanzania), MTN and Airtel for Northern Corridor countries). Tigo Rwanda and Tigo Tanzania’s Tigo Cash subscribers have been using the platform to send and receive money between the two countries, while MTN Rwanda and MTN Uganda subscribers are able to do the same under the One Area Network arrangement between the Northern Corridor states – Rwanda, Uganda and Kenya.

This direct service, especially between MTN Rwanda and MTN Uganda, has created uncertainty among mobile money agents who have been collaborating with their counterparts in Ugandan towns like Kabale, Mbarara and Kampala to send money on behalf of Rwandans at a fee. This, therefore, means that MTN Mobile Money subscribers are the big winners. So what will happen to the whole chain of agents who these people previously relied on?

Mixed reactions from mobile money agents

Robert Karyeija, a forex dealer at Gatuna border post, says the service has not yet affected his business. Yesterday, his exchange rate was 4.65 (Rwf1 is equivalent to Ugsh4.56).

Simon Mwangi, a mobile money operator in Remera, a Kigali suburb, echoed the same sentiment, saying nothing seem to have changed with the direct mobile money transfers between MTN Rwanda and MTN Uganda, and "there are no emerging fears yet”. Mwangi believes that old customers use services of agents for a number of reasons.

"We don’t levy any charges when sending money, and basing on the exchange rate, the sender just has to part with a round figure,” Mwangi says.

Mwangi was remitting money at an exchange rate of 4.3 yesterday. This means that one sending Rwf1,000, the recipient would get Ugsh4,200, but this is lower than 4.46 offered by MTN. However, MTN has a transfer tariff, and one is charged depending on the amount they are sending.

Unlike Mwangi, Ambrose Byamukama, an employee with Prestige Ventures, a money transfer service in Kimironko, says the direct remittances could mean diminished business.

"Right now, you cannot tell the impact but eventually we will understand after monitoring how business goes and the people remitting money with us in the coming months,” Byamukama says.

The firm’s rate was at 4.2 yesterday.

Statistics show that mobile money transactions increased from about 20 million in March last year to 35.1 million this year, translating into a 122 per cent growth in value, from Rwf115.7 million to Rwf257.4 million over the period.

However, with the coming of MTN cross-border mobile money services, some agents from the border points say business could eventually go down, driven by the difference in the interest rates and convenience.

"If someone has an option of transferring money directly, it means that they will be more comfortable with that service,” says one Simpi, an agent at Katuna border.

He also points out that most people use one reliable person who also gives them a better exchange rate. "However, they may not hesitate to switch if they deem the direct mobile money transfer service more convenient and affordable,” he explains.

Reducing risks

MTN Rwanda chief executive Gunter Engling is confident that the direct cross-border mobile money transfer service improves safety of cash transactions, among many other benefits.

Engling says when money changes hands, three to four times, the risk increases.

"It is a fairly lengthy process, and there are always fears that the money may not reach the recipients in Uganda,” Engling notes.

He adds that with the new system, people no longer have to walk across the border with huge sums of money because the telecom offers attractive exchange rates.

"First, everyone along the chain gets a percentage as payment, but now with an exchange rate similar to that accepted by the National Bank of Rwanda, people send money at low costs with peace of mind,” he adds.

According to Emil Sjöblom, the acting head of mobile financial services at Tigo, despite improvements in money remittances, mobile agents will not be eliminated from business.

Unlike MTN and Airtel, Tigo, which currently offers a similar service between Rwanda, DR Congo and Tanzania, has not penetrated the Ugandan market but Sjöblom says that in any country, a mobile money agent is at the end of the chain.

"Sending money directly still requires mobile money agents to cash it out to clients. When one needs cash, he has to approach a mobile money agent to withdraw it,” Sjöblom explains.

Statistics show that at least 6.4 million Rwandans now have a mobile money account, way higher than the banked population. This group is open to innovations that will help further make their business operations and lives easier and better.

Charles Masaba, a mobile money subscriber, says direct mobile transactions are a relief, adding that previously, one had to spend a lot of money on airtime trying to check whether the money has been sent or not.

"Whenever you send money to Uganda through other people, you follow up through constant calls. This wastes airtime and more money,” Masaba says.

Belyse Umutoniwase, a resident of Remera, is optimistic that once it is possible to receive money from Uganda, businesses that import merchandise from the country will cut on operational costs.

"When you can receive money at anytime from another country, it is a sign that time is not wasted,” she says.

Customers who rely on cross-border money transactions to run their businesses have only to keep their fingers crossed since MTN is also planning to launch direct money remittances to Kenya soon.