A recently concluded workshop in Congo on the Future of Money Transfers conducted by TerraPay established that global digital payment rails would create new opportunities for future growth. The workshop saw industry influencers - representing a cross-section of banks, mobile money service providers, regulators and money transfer operators - gathered to exchange ideas on interoperating payment services.
Like most economies in Africa, Congo is registering a strong demand momentum for digital payments products – international and cross-border money transfers in particular. Congo’s payment landscape is dotted with multiple money transfer operators, catering to a wide base of banked (13% of the population) and unbanked consumer segments. The services however operate in silos and the resultant market fragmentation constrains the pace of digitalisation, said TerraPay.
According to TerraPay, mobile operators are well-positioned to take the lead, as they issue payment instruments (store value accounts) and are the biggest distributors of financial services in the country. Instead of competing for the 3%(credit transactions) share of the market, the firm suggested that service providers to collaborate to capture the 97% dominated by cash.
For electronic payments, to effectively compete with cash, they must be simple, interoperable, and easy to use and made for the consumer, said the firm. TerraPay claims that its mobile-first international payment networks can build the rails for global payments by interconnecting traditional money transfer providers to the existent mobile infrastructure.
TerraPay said that consumers would be able to send money seamlessly across networks using their mobile number, addressing the expensive and cumbersome methods of transfers existing at present where customers have to physically withdraw monies from bank accounts and make transfers and know the recipient's BIC and IBAN codes.
Ambar Sur, Founder and CEO TerraPay
Ubiquity and trust are two important dimensions to make any payments system relevant and valuable for users. Payments are a volume-driven business requiring substantial scale to make a profit due to low margins.
Ramakrishnan Sundaram, COO TerraPay
Multilateral payment models can strengthen transaction security and risk governance. Money transfer operators, operating services independent of each other, do not have access to a customer’s transaction history on another network.
