Interview: Yo-Uganda’s Gerald Begumisa On A Digital-Finance Revolution

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Gerald Begumisa at his office

Gerald Begumisa is the Managing Director of Yo-Uganda Limited. Whereas you may not have heard of them, you most certainly have used their products without knowing that you were. Yo! Payments gateway is used by many financial services providers and is the main focus of Gerald’s company. We caught up with him to get the low-down on their story over the years.

Gerald’s  journey into the world of computers technology

I had always had an interest in technology from my early days but my dad formally introduced me to technology in my Primary Five (I was about 10 years old at the time). While he was an Economist by profession, he was a bit of a computer enthusiast and influenced me in that direction. Having a computer at home from that time helped a lot as well.

I worked with Uganda Online through my high school vacation and remained employed there throughout my 4-year Electrical Engineering course at Makerere University.  Juggling work and study was certainly a challenge but thankfully I had a favorable study timetable that allowed this.  I also deliberately and with great conviction chose to work throughout my studies in order to “keep in touch” with the real world.

gerald3I founded Yo! in January 2006 with 3 other people, and graduated with a Bachelors Degree in Electrical Engineering later that year.  Towards the end of January 2006, we took on another shareholder.  Our big idea in 2006 was to offer an alternative, low cost international calls service by sending the calls over the Internet using VoIP technology.

The launch of mobile money services in Uganda in 2009 provided the space for a new focus for our company when we started building our Mobile Financial Services gateway, Yo! Payments, which we launched in 2010 to take advantage of all the payments service opportunities that we believed mobile money would bring to the Ugandan consumer.

Yo! Payments currently takes nearly 80% of our strategic attention as we believe the digital financial services industry is only going to get bigger.  Yo! Payments focuses on enabling organizations incorporate the use of Mobile Money services in their operations.  Customers using this service range from Financial Instituations, Not-for-Profits, Corporates and even individuals.

gerald12Why Financial Solutions?

As Yo!, we always had an interest in financial solutions.  One of the products that Yo! sold in its early days was actually a telephony billing system called YBS that we developed for use for our VoIP service.  In addition to using this system ourselves, we sold this system to several other international VoIP providers in the UK and USA.  We still use the system internally for rating and billing our Voice Messaging, SMS and USSD services.

The success of MPesa in Kenya also opened our eyes to the opportunity.

With this background, movement to the provision of mobile payments solutions was a natural progression, as a result of recognizing needs in the market.

Briefly talk about the trend of E-commerce in Uganda as you’ve personally observed.

E-commerce is a broad and amorphous term that needs to be understood and contextualized when using it. E-commerce in the context mobile space has seen rapid adoption and East Africa has to some extent leap-frogged more traditional mobile banking services that were introduced in other parts of the world in early 00s.

In the context of Internet / Web services, E-commerce is still in its early infancy. Before the coming of mobile money, the only channels through which payments could be processed online was credit cards, which suffered, and still suffers, very low adoption locally due to high costs, high barriers to entry imposed by the banks and preference for using cash. Whereas Mobile money in effect ‘closed the gap’ between cash and banking by providing a simple ‘electronic mobile based store and send/use value system’.

gerald4Is Uganda ready for digital commercial solutions?

Yes, we are more than ready for this.  Capacity and Infrastructure is a bit of a chicken and egg thing – do you create the capacity first then wait for the adoption or do you first realize the adoption then grow the infrastructure and capacity?

As we are not a government entity, we go with the latter – realizing the adoption in its early stages and steadily growing infrastructure and capacity to meet anticipated need based on actual results.

Let us not take for granted what the mobile operators have provided in the form of a mobile money ecosystem. Uganda is one of leading countries in terms of mobile money adoption in the world and that was mainly due to the foresight of the mobile operators. M-Pesa in Kenya exerted a significant influence on the mobile operators in Uganda.

What makes Yo-Uganda relevant in the “Digital Inclusion” fight?

Yo! is positioned as a mobile technology solutions company. We develop tailored solutions geared at delivering significant operational benefits to our customers such as increased efficiency in processes, reduced costs, accelerated growth, increased profitability. Our solutions leverage various mobile platforms such as Mobile Money, SMS, USSD and Voice to deliver value to our customers.

Yo! Payments gateway is enabling businesses to accept mobile money payments online which is going to grow E-commerce exponentially.

Yo! range of services allows us to integrate payment services and messaging services for a client. So for example Yo! can deliver a tailored solution for a company wishing to settle their monthly wages via mobile money by providing them with a salary payment interface which also sends a salary advice notice via SMS.

What are the opportunities in the financial services sector for young technologists?

There are still very few mobile applications in the financial services sector.  I would strongly encourage a young technologist to start thinking about integrating payment capabilities in mobile applications. You can now process payments from within your application – capability that was not there just a few years back.  This allows the developer to get paid directly by their customer hassle free.  Previously the only way to do this was through airtime billing which was fairly inefficient due to high taxes.

Lionel Kabenge is Manager - Projects, Business Development and Aggregation Services at Yo-Uganda
Lionel Kabenge is Manager – Projects, Business Development and Aggregation Services at Yo-Uganda

There’s talk about “mobile Money eating banks’ lunch” and experts spelling doom for the traditional banking industry. What’s your take?

Mobile Money has addressed certain financial services needs in ways that traditional banks were previously unable to. However, traditional banks are still very much part of the banking ecosystem.  Behind any mobile money service, there is a holding bank where all the electronic value in the mobile money system is backed with actual cash. I also foresee much greater integration between mobile money systems and the banking systems. Banks have accepted that mobile money are now a permanent part of the banking system and will surely benefit as the entire ‘banking pie’ has increased in size. There remain numerous opportunities for banks to benefit from the mobile money customer base.

Do you think Barclays is exiting Africa because of shrunk business in the sector? Shrunk by Mobile Money growth?

Obviously I am not an insider but I think Barclays PLC may have more on its plate to consider than just the impact of mobile money. The bank had global issues in terms of capital adequacy ratios. The emerging market fall out in 2015 and the resultant collapse of most African currencies including the South Africa rand, where ABSA generated the vast majority of Barclays Africa’s revenues, was a major contributing factor to their withdrawal. The returns on equity in 2015 were <10% in Africa, which is not good.

Shell Nakawa as seen from the UAP Business Park. When you pay for fuel at Shell stations, the transaction is facilitated by Yo! Payments.
Shell Nakawa as seen from the UAP Business Park. When you pay for fuel at Shell stations, the transaction is facilitated by Yo! Payments.

What is the process that a website owner has to go through to set up his website to receive payments online?

There are 3 main steps. First, they need to open an account by visiting our website through https://payments.yo.co.ug/ and clicking “Sign Up”.  Secondly, they need to upload to their account a list of KYC (“Know Your Customer” details), after which their account would be upgraded to a business account.  Finally they need to integrate our system to their website – there are a number of options we give for this third part depending on the technical capabilities of the website owner.

Yo! Payments won “Best Financial Services App” at the MTN Innovation Awards last year. What impact has this had for your business?

We certainly feel very honored by this recognition as we have been working very hard to innovate in the financial services space.  The biggest impact has been awareness about us and our product, which has started to translate into a bit of increased business.

gerald2What would you say is the single most important factor to your success over the years?

I would say the single most important factor has been persistence.  Through the years, we have developed and launched so many products that have not performed well, but we think that being (ironically) energised by the failure and using that energy to try something new or try the same thing in a different way has contributed to the successes we have been privileged to have.

What more can we expect to see from Yo! Uganda?

We plan to expand in the region and around Africa.  We hope to have a presence in most African countries within the next 10 years.gerald6

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