Olumuyiwa AsagbaThree years since Interswitch Ltd, with origins from Nigeria acquired a 60% controlling stake in Bankom Limited, it has signed a partnership with telecom giant MTN. The Independent's Julius Businge talked to Olumuyiwa Asagba, the Interswitch CEO.
You have just partnered with MTN Uganda to facilitate mobile money transactions on your switch. What is the deal?
What we have done with MTN Uganda is to interconnect MTN Mobile Money with our interbank switch so that MTN can leverage on the ATMs of our partner banks. What that means is that instead of MTN having different connections to all these banks, MTN can, with one connection to Interswitch enable MTN mobile money subscribers use the ATMs and devices of Interswitch partner banks.
So how does the consumer benefit from this partnership?
For subscribers of MTN Mobile Money, this partnership is very exciting. They (subscribers) will have more channels to access their MobileMoney. Bank ATMs run twenty four hours a day, seven days a week, which is not the case with Mobile Money agents.
It is believed that acquiring a company comes with a lot of risks and challenges. What has your experience been since Interswitch bought majority share in Bankom Ltd in 2009?
Before acquiring stakes in Bankom, we studied the market and had an idea of what the market needed. We did not have the biggest banks on our switch and we were seen as a small company. We realised we needed to create value on the switch and attract the big banks.
The partnership with MTN is one of the ways we are creating value. At the moment we are bringing on board one of the biggest banks in Uganda. Overall, our strategy has always been to add value to our primary clients who are banks and identify and provide solutions to what their customers require.
This market has 25 commercial banks, but only 10 are connected to your switch, won't this partnership be looked at as beneficial to a few people?
It is true that 10 banks are integrated to our switch. These 10 banks are live and are Cairo, DFCU, Fina, Finance Trust,FINCA, Global Trust, Imperial, Opportunity, Orient, and UBA. What we are doing is to engage the other banks. We have signed agreements with three more banks and we expect all the three to be live on our switch by the end of January 2014.
For banks not on the Interswitch network, they can either connect to MTN Mobile Money directly or, connect to our switch. Connecting to our switch will enable these banks to not just provide the MTN Mobile Money Cash Out Service on their ATMs but also be able to interconnect with the partner banks on the Interswitch network.
How about partnering with the other mobile money players?
About two years ago, we did a similar partnership with one of the major mobile money players in this market. We are also in discussions with the other players in the market and these discussions are at different stages.
ATM fraud is one of the issues in the public domain and is seen as a threat to customers' cash deposits. How strong is your switch when it comes to detecting fraudulent transactions at ATM machines?
We have a very strong system that detects fraud and there are very many things we are doing to detect fraud. There are anti-skimming devices that prevent a fraudulent transaction to happen. We also ensure our banks install cameras fixed at ATM pointsto capture anyone who transacts. When a fraudster makes a transaction, they can easily be identified.
We plan to launch a new product next year which will be able to preventing fraudulent transactions at ATMs. We also have a VerveSmart Card that has a lot of security features that can completely eliminate fraud at ATMs. So far banks connected to our switch have not reported any cases of fraud.
So looking at the other markets elsewhere where you operate, how do you compare them to Uganda in terms of say profitability and uptake of your products?
Uganda is the only market we have operations outside Nigeria; where our head offices are although we are currently partnering with the Central Bank of Gambia to build a national payments switch in The Gambia. In Nigeria we have a much larger share of our transactions compared to Uganda. Uganda's market is growing too and we continue to see a lot of opportunities here.
Looking at the numbers, Uganda has four to five million bank accounts and a little over two million ATM cards, yet its total population is over 34 million people. What we see is more and more people getting banked and that means a lot of opportunities to our business.
Mobile money has done a lot of work in trying to serve the unbanked population, a reason why we are partnering with MTN to tap into that opportunity. In terms of profitability, our business in Uganda is also growing aggressivelyand we expect that trend to continue.Generally, the uptake of our products has been very positive here and we see more new corporate companies, government institutions and others getting in touch with us, which gives us an assurance that this market is promising.
What major plans do you have for this market in the medium term?
We want to interconnect most of the banks in Uganda. Next year we will have 13 banks on our network. We want to make sure that our infrastructure remains strong, secure, reliable and available.
We are also making sure that we tap into new opportunities like we have been doing for Mobile Money. We are working on alliances and partnerships with other switches in the East African region to enable cards and ATMs in Kenya, Tanzania and Rwanda interoperate.
I understand you are a Nigerian by nationality, as CEO, what challenges have you encountered working outside your home country?
Uganda is a beautiful country with fantastic people. There haven't been any challenges acclimatizing and working here. It's actually been very nice.
What do you think makes a CEO successful?
I think one of the most important things CEO's keep in mind is the vision of the company which the company must work towards if it is to achieve its goals and targets. In Interswitch we share the vision as a team; I try to keep the team motivated, develop them and urge them to aim higher.