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Kenya dominating global mobile payments industry, posing monopolistic threat: World Bank

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by Nairoberry, Jul 25, 2012.

  1. Nairoberry

    Nairoberry JF-Expert Member

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    Jul 25, 2012
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    The numbers tell the story: There are roughly 40 million users of mobile payments systems worldwide. About half are residents of Sub-Saharan Africa who use a system developed in Kenya that last year processed an average of $500-million of transactions a month.
    In fact, the Kenyan system known as M-PESA has become so successful that it now accounts for a meaningful chunk of the national economy.
    Trouble is, the Kenyans may be too successful. The World Bank is warning that the handful of companies dominating the industry in the African country may have become too big for the good of the global mobile payments industry, amassing potentially monopolistic clout to the detriment of their competitors in other countries.
    According to a new report by the Washington-based organization, the sub Saharan mobile payments market is dominated by a small number of telecom firms whose systems don’t allow interoperability, making it almost impossible for smaller players to survive.

    The rise of mobile payment services has transformed much of the continent, providing basic banking services for millions of people who previously had no access to a bank. It’s also created thousands of direct and indirect jobs as telecoms such as Safaricom work to build networks to meet demand.
    Indeed, this may come as a surprise to many North Americans where banks and telecoms are still cautiously testing the waters, still unsure they’ve got the right technology.
    Interestingly, many of the Kenyan systems use phone time as currency. Subscribers buy minutes and instead of using them to talk, and the minutes become money that can be transferred almost instantaneously to a local merchant or a relative in another country.
    “Mobile financial services are among the most promising mobile applications in the developing world,” the report said. “Mobile money could become a general platform that transforms entire economies, as it is adapted across commerce, health care, agriculture, and other sectors… While the benefits of mobile payment systems are clear, observers remain divided over whether mobile money systems are truly fulfilling their growth potential.”
    The Financial Times‘ Alphaville blog looks at the same numbers and comes to a more optimistic, making the case that the M-PESA system, far from a threat to economic growth, could be a model for Europe
    Kenya dominating global mobile payments industry, posing monopolistic threat: World Bank | FP Street | News | Financial Post
     
  2. Lonestriker

    Lonestriker JF-Expert Member

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    In fact, the Kenyan system known as M-PESA .....Is This a Kenyan system???A Kenyan system owned by Vodafone,the server being based in Germany....How do you pay royalty to something that you own?
    According to a new report by the Washington-based organization, the sub Saharan mobile payments market is dominated by a small number of telecom firms whose systems don't allow interoperability, making it almost impossible for smaller players to survive.This is very true Safaricom is simply a monopoly and showing all signs of a monopolistic firm,same case apply to Vodacom in Tanzania


    Interestingly, many of the Kenyan systems use phone time as currency. Subscribers buy minutes and instead of using them to talk, and the minutes become money that can be transferred almost instantaneously to a local merchant or a relative in another country.Am not getting what the writer meant...where do we buy minutes and turn them into cash?
     
  3. Nairoberry

    Nairoberry JF-Expert Member

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    nenda ukabishane na hao watu wa world bank. si mkenya aliyeiandika hii article. wacha uzembe na wivu pia. world bank is a reputable organization and the financial post is one of the best magazine in the world. jemeni if you have nothing to say do not say it here. if world bank says MPESA is kenyan who are you to dispute???
     
  4. Lonestriker

    Lonestriker JF-Expert Member

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    Thanks for the rubbish...the question still remains,how can one pay royalty to something that one owns?Does it make sense to you?Safaricom pays royalty to Vodafone for the use of M-pesa platform...I understand that Vodafone is a Uk company that is one of the major shareholders of Safaricom....The reality is M-pesa is not a Kenyan System and that's why Vodafone is using it Tanzania where it is the majority shareholder of Vodacom and also uses the M-pesa platform in one of it's subsidiary in Asia.
    By the way uzembe na wivu upi?Since when did pointing our the incorrect facts become wivu na uzembe....Uzembe ni ku-post incorrect facts ua kukosoa the incorrect facts?
    Siwezi kukulaumu since you were among many Kenyans who accepted the shit story that M-pesa is a Kenyan system yet everything is based in Germany and Safaricom pays royalty to Vodafone for the use of M-pesa service.
     
  5. O

    Oshany Member

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    Is M-PESA a Kenyan system? Yes and No. Why? You need to go through the history of M-PESA to know it was developed well by Vodafone but for Kenya market.

    It is true that for Kenya Safaricom dominates the market of mobile banking, the main reason is that Safaricom's share in the mobile telephones market in Kenya is about 80%. The case of Tanzania is different as Vodacom Tanzania has less than 50% of the market share. The latest information I have indicates Vodacom's M-PESA to have 6ml customers with TiGO Pesa having 2ml customers with Airtel Money also in the market. In the near future I predict the distribution to be even much more shared between Vodacom and TiGO.

    On using airtime as currency I believe there is a confusion in the WB report, I have experiences with some people from Europe not clearly understanding the difference between air time and mobile money and this is a good example. In my understanding, we do not convert air time into cash but rather convert mobile money into cash and vice versa (Cash in and cash out)
     
  6. S

    Silicon Valley JF-Expert Member

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    It is very possible to convert airtime to cash and vise vesa some people when they are given airtime voucher they resale it to merchant store or anyone in need, even airtime by transfer through phone(voda rusha) can be resold in the same way.
     
  7. O

    Oshany Member

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    Agreed, however, this type of transaction does not feet 100% in the definition of mobile money. Why? I do not think regulators such as central bank can record this type of transactions and provide statistics. That is my opinion and I stand corrected.
     
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