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Fintech technologies have upscaled access to financial services – Stephen Mutana

KAMPALA- Before the idea of mobile money came to life, the modes of receiving and sending money for goods and services was not only informal but was risky too. At the time, financial services were largely concentrated in urban areas.

Commencing with peer to peer or sending, receiving, and withdrawing money, no one would have anticipated the extent to which mobile money would transform lives. STEPHEN MUTANA, the General Manager, Mobile Financial Services at MTN Uganda shares his opinion on how mobile money penetration has boosted the access of modern financial services to the rural and unbanked population.

What is your view on Fintech as a financial inclusion mechanism?

Financial technologies promise to increase efficiency in delivering financial services and promote financial inclusion. Currently, mobile penetration in the country is higher than banking, which provides telecoms with an edge for marketing financial products to their clients through greater reach. The service has been a major driver of financial inclusion in the last decade.

Mobile money services  currently allows the unbanked people to use their phones as a bank account, to deposit, withdraw, and transfer money with their handset. People can also use mobile systems to pay utility bills and pay for goods in merchant shops.

Is the integration of Fintech and banks the remedy to Uganda’s financial inclusion?

I know that the power of partnerships should never be underestimated. As the central bank finalizes the National Payment Systems Act regulations, we fore see more possibilities for partnerships between banks, Fintech, and Mobile Network Operators that will further drive financial inclusion. We improve on partnerships focusing on leveraging on existing infrastructure such as distribution systems sides for cost effective operations.

Partnerships that aim to drive innovation by exposing prebuilt APIs. For instance, access to accounts, transaction history, know your customer, or metadata enhancements.

How have you managed to develop a seamless digital payment Solutions system?

As one of the leading telecom operators on the continent, we have taken a global view on developing platforms. We are focusing more on solutions that enable many players or stakeholders to come on board or simply plug into our system.

 MTN launched the Open API (Application Programming Interface) two years ago to enable digital payments and collections. An API is a computing interface that allows two applications to talk to one another. For instance, when you go shopping online and use mobile money to settle a payment, you are using an API. Currently, over 100 partners have joined the API platform. 

Active Mobile Money users have grown to over 7.4 million.  Mobile Money services have grown to include bill payments, group salary payments, and school fees payments. 

Your Brand is the Fintech in the country, what do you think about the National Payment Systems Law?

The National Payments Systems Act, 2020 (Act), effectively became law when it was assented to by the President in July this year. The law regulates operators of payment systems, payments service providers, issuers of payment instruments and issuers of electronic money.

We think the law seems to be comprehensive enough to plug some of the regulatory loopholes that have been prevalent among players in the payments space. As the novel COVID-19 continues to spread, the race is on for innovators to design products that will add another layer of safety to support how payments for goods and services are settled. Therefore, clear regulation and legislation are key in defining a sustainable approach within which payment service providers and consumers interact, exchange data and make payments.

What are your thoughts about how this law might impact the smaller Fintech in the country?

With regulations in place, smaller Fintech firms which have enabled value addition on our products and services will find it a lot easier to integrate into the API platforms. There will also be deliberate support from us to Fintech partners that work in areas of national development plan priorities such as healthcare, agriculture, job creation, and education. Although we welcome the move to regulate these smaller Fintech firms a tiered regulatory approach will spur the innovation space. Innovation and technology have always moved faster than regulations.

What is the way forward for the smaller companies as far as the law is concerned?

We encourage our regulators to have a light touch to a regulatory approach that can improve access to technologies but also spur innovations. Most importantly though, regulating the sector will drive confidence and trust in Fintech products and services. Customers and suppliers, both local and foreign will have greater clarity on products and safeguard customer funds. As a leading player in the Fintech sector, we think this will allow us a greater scale. 

What are your parting shots?

The transformative role of mobile financial services will depend largely on whether stakeholders private, government or international organization invest in approaches to solve every day problems. Also, partnerships are key if we want to progress. Behind the success story of mobile money, MTN has had partnerships with a number of Fintech firms that have enabled the technological capabilities needed to make the financial services a success. 

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