ID Requirement to Withdraw Mobile Money Can’t Work-MTN2 min read
Mobile Telecommunication Network-MTN Uganda has dismissed as unfeasible, talks of plans to make the National ID an identification requirement for anyone intending to withdraw cash from a Mobile Money agent.
The company says the current level of digitization in the country is not yet at a stage where such a mass service would require an ID.
Copies of a printed notice purportedly from MTN has been making rounds on social media claiming that starting February 1, anyone who intends to withdraw cash from a mobile money agent will have to present their National Id.
MTN has denied having issued such a notice but says identification is important at every stage of revolution in the financial sector, specifically as Uganda strives towards a cashless economy.
John Mark Sebunnya, the head of Fintech Architecture and Platforms, MTN Group says that as money gets digitized, so must identity.
He says it is impossible not to recognize the importance of identification in the sector, and that this has to become more complex and hard to beat, so as for the sector to stay ahead of fraudsters.
Sebunnya, however, says, that since the mobile phone was considered personal to the user, the introduction of mobile money neglected the importance of the ID as everything was done on phone and security-enhanced by codes attached to the user’s telephone number.
But as fraudsters become more sophisticated, there is also need to step up security efforts, at the same time simplifying the process for the users.
Commercial banks, for example, have moved from physical scrutiny of signatures and ink-thumb/fingerprints to facial recognition and identity cards to machine-reading of thumbprints.
Most banks now require only the thumb or fingerprint for the customer to be able to transact.
On the fingerprint being recognized by the machine, it displays the bio-information of the customer, satisfying the banker that the person they are dealing with is the holder of the account.
However, mobile money agents do not have such machines.
Sebunnya says if the ID was made a mandatory requirement for one to withdraw money from an agent, it means many of the current agents would fall out of business, as it would become quite expensive to operate.
But Sebunnya also says that currently, it would need heavy investments for the agents to be able to have equipment that can scan documents, which is currently no tenable.
Innocent Kawooya, the Chief Executive of Hi-Pipo, a digital age and financial inclusion promotion company, says if the cost of these services is not kept low, people will abandon it.