The system of interoperability introduced between mobile money service providers in Kenya is a positive step, but should only be the first development in making services interoperable as the country moves towards financial inclusion.

This is according to panelists speaking at the East Africa Com conference hosted in Nairobi last week, where the recently-launched mobile money interoperability was much discussed.

The new system allows for the seamless transfer of funds from one mobile money wallet to another, regardless of whether the user is subscribed to Safaricom, Airtel or Telkom. It follows a long period of deliberations, and is designed to make the movement of digital cash cheaper and more efficient in Kenya.

Initially, interoperability is only available between Safaricom's M-Pesa and Airtel Money, with Telkom Kenya - which has launched its own mobile money service, T-Kash - set to join the initiative shortly.

Communications Authority of Kenya (CA) board director Paul Kukubo said Kenya had one of the most vibrant telecoms markets in Africa, and would see further development with the arrival of interoperability between mobile money service providers.

"The policy of interoperability is a good example of forward progression. It was a balance of allowing competition to thrive and allowing companies to enjoy the benefits of their investment," he said.

Representatives from mobile operators agreed the new policy would help the country's telecoms market develop.

Alice Kariuki, group regulatory director at Airtel Africa, said the arrival of interoperability had "helped to expand the space for mobile financial services", while Mercy Ndegwa, head of regulatory and public policy at Safaricom, said it created a competitive environment in which to offer services.

"So far it seems to be working well. Let's see how that goes," she said. "It seems to be working well because it has been led by the regulator in a very systematic process."

However, other speakers argued that mobile money interoperability should only be the first step in ensuring the financial services industry in Kenya developed to its full potential and helped foster financial inclusion in the East African country.

Anuj Tanna, director of mobile financial services of Telkom Kenya, said interoperability would have a very powerful effect on the industry, but nonetheless it falls short in many respects.

"If financial inclusion is the end goal, we are not making efficient use of our resources to facilitate that," he said. "There are a bunch of closed loop ecosystems. The real prize is in agent and merchant interoperability. How effectively can we take cash and make it digital?"

Tanna was referring to the fact that one mobile money agent often works for at least two operators, and that merchants are also employing a number of services.

He said operators should not compete with each other in areas that are already served, and instead focus on extending financial services into underserved and unserved regions.

"There have been a lot of strides, but I think the risk is in becoming complacent," said Tanna. "We need to push an agent and merchant sharing agenda."