Building an efficient mobile payment platform for Sierra Leone

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Mobile Money agent, Osman Bah attending to a customer in Shenge, Southern Sierra Leone

By Alfred Koroma

No doubt, mobile payment is growing rapidly and expanding the space for financial inclusion in Sierra Leone.

Thanks to COVID-19 and limited access to formal financial services in larger area of the country which became the driving force for Sierra Leoneans to embrace their mobile phones to make financial transactions.

Launched in 2010, the digital payment technology which allows users to send and receive money using their mobile phones, has revolutionized financial inclusion, made transaction easier and enhanced access to financial services to those previously deprived of access to formal banking system.

Sierra Leone has two mobile money systems – Orange Money and Afrimoney operated by the major Mobile Network Companies (MNOs). Customers use the service by visiting agents at the nearest kiosks, hand them physical cash to pay their bills and transfer money.

It is less cumbersome and easy for a customer to own a mobile money account as compared to formal banking system.  Opening a mobile money account only requires one to just get a sim card and register, says Robert Charles Davies, Communication Supervisor, Afrimoney.

But despite the increase growth of mobile money, payment system in the country is still predominantly cash-based.

Lack of interoperability

Lack of interoperability between Mobile Network Companies operating mobile money and limited network coverage in many parts of the country remain a dominant challenge, preventing citizens’ from tapping into the benefit offered by the digital payment services.

Osman Bah is a mobile money agent in Shenge, a fishing community in the coastal area of Moyamba District, the Southern part of Sierra Leone.  Bah operates with both Orange Money and Afrimoney. People often go to him to collect money sent by their relatives in cities and major towns.

The challenge Bah faces is that Africell, one of the telecom companies has the most effective network coverage in the coastal community while mobile money transactions in the community are mostly done via Orange network. But because an Orange customer cannot send money through Afrimoney, Bah said it is very challenging for him dealing with customers.

 “Customers give my Orange Money line to their relatives in the city to send them money, their relatives would try to call my line, but it sometimes take days to reach me through my Orange line,” he said.

“The network system is very challenging here. You have to seat in a particular location to send and receive money. And sometimes even when you think you are at the right location, the system goes down. I try to send money to people no way.  They tell you connection error,” the agent added.

One of Bah’s frequent customers, Adama Koroma is a fish monger. She does not have a mobile money account but relies on mobile payment system in her fish business. Koroma packages ‘smoked’ fish and send them for sale to her sister in Freetown, who sells the fish and send her back the money through mobile payment.

“Before now, It was difficult to send my sister fish and easily get back the money. But now it is better. She send my money to the agent, I collect it there and buy another fish, she said.”

However, Koroma reveals it sometimes takes longer to receive money sent through the agent due to faulty network coverage or lack of energy.  “There are times when I come to collect my money, the agent would tell me he has not received it as a result of the network while my sister would have confirmed she has sent the money.  Sometimes he tells me his Orange Money phone is not charged, except I have to wait.” 

Mobile network coverage is still ineffective in certain part of Sierra Leone. And in some parts, no network coverage is available, leaving millions of people unconnected to the digital world.

A report by the International Monetary Fund indicates that network coverage is still limited with 15 percent of Sierra Leone’s population having no mobile phone signal. In the report, the country is ranked 168 out of 173 countries for quality and speed, which suggest network quality in the country remain relatively weak.  

Learning from success stories in Africa

Credit: ICTworks Kenya

Despite increase in the use of mobile phones, the percentage of Sierra Leone’s mobile money account holders is still low as compared to other African countries.

Only 19.8 percent of Sierra Leoneans have access to formal financial services in the country, including mobile money, according to a publication by the UN Impact for Capital Development. Whereas over 55 percent of the population in Kenya and Ghana has a mobile money account each.

And unlike Sierra Leone, mobile payment operators in those countries interoperate or allow payment transactions between more than one telecommunication service providers.

If you are in certain areas of Sierra Leone where you only have access to one network coverage, you cannot conduct any digital payment transaction as long as you are not a subscriber to the network coverage available.  

Lack of interoperability is limiting access to mobile payment across the country and hindering the potential of mobile payment to promote financial inclusion, as users are unable to transact with people on other networks.

Appreciating the introduction of mobile payment, Sahr Ibrahim Komba, a mobile money user recalled his current and previous struggles to send money for his relatives outside Freetown.

“Before now, it was really challenging, he said, “Sometimes the money I send through travelers to my village don’t reach my relatives and sometimes it takes time to reach them. But with mobile payment, it has become better.”

But Komba laments he still encounters some challenges, as Orange is the only way of sending money to his relatives. He cannot use other mobile money operators to do so. The agent in his village only works with one mobile money operator.

“Let them allow interoperability,” he said.  “This will receive a ripple effect. It will be easy for us and allow more people to adopt mobile payment in the country.”

Awareness challenge and the trust for physical cash

Many Sierra Leoneans use mobile money mostly to transfer and receive cash, but not necessarily to save and make other digital payments. Most Sierra Leoneans with mobile money accounts prefer to cash out their money and keep it physically to having it in their phones.

“One of our major challenges has to do with Knowledge about mobile money in the country as a whole. If you go to Kenya and China, the people are more knowledgeable about using mobile money,” Davies said. “Getting knowledge about mobile money and getting people to get use to mobile money is a major challenge for both mobile network companies operating mobile payment in Sierra Leone.”

 The peoples’ fear is that keeping money in a mobile phone may lead to it being lost if the phone gets missing.

In other instances, people have raised concern about receiving SMS messages from fraudsters, claiming they have won prizes from the promotions offered by the competing telecom companies. Mobile payment agents have also expressed dissatisfaction with the slow process involved in reversing money sent to the wrong customers. These are flaws the telecom service providers have not been able to tackle.

But Mamadu K Barrie, Afrimoney operations staff said individual mobile money accounts are secure. Subscribers are at liberty to provide unique password that secure their accounts which they can change at will.  And where the phone of a mobile money customer gets missing or are stolen, the cash in there can be retrieved.

But many mobile payment account holders have no knowledge on how they can personally protect their accounts, which suggest the need for more education and awareness campaigns to address digital payment literacy gap and build trust for mobile money services in the country.

“The mentality of handling physical money is still much in Sierra Leoneans. We have more to do,” Barrie said.  However, he argued that awareness raising alone by telecom service providers without government intervention is not enough.”

‘We need the Policy makers”

Barrie suggests government implement policies that would make digital payments mandatory across the country. “If parents pay school fees with mobile money, at the supermarket, you pay with mobile money, and a passenger pay a taxi driver using mobile money, it would ease the burden of government having to print money every year. Government need to drive the use of mobile money payment.”

There are plans for government to introduce a digital payment system that allows interoperability among mobile payment operators, commercial banks and Point of Sale (POS) systems.

That’s packaged in the National Payment Switch Bank of Sierra Leone launched in May this year. According to the Central Bank, the digital infrastructure will facilitate electronic payment in the fastest possible time and promotes financial inclusion through interaction with banks, POS, Automated Teller Machines and Mobile Payment Systems.

The switch, whether it has started working or not, is currently at its first phase, limited to only five commercial banks. Mobile payment is yet to be included.

“We haven’t got interoperability. Even at the central bank, it is not available. This is the issue with telecoms and mobile money,” Barrie said. “If the national switch is extended to the mobile money, it will accept moving money from one network provider to the other. Afrimoney platform is ready, but just that regulation does not allow at the moment.”

This report is produced under the DPI Africa Journalism Fellowship Programme, organized by the Media Foundation for West Africa with support from Co-Develop.

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