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

Discussion in 'Kenyan News and Politics' started by Nairoberry, Jul 25, 2012.

  1. Nairoberry

    Nairoberry JF-Expert Member

    Jul 25, 2012
    Joined: Mar 7, 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.
  2. m

    mwathai Senior Member

    Aug 8, 2012
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    Hi Nairoberry.
    Nairobi has long since Nairovention. Please update. But honestly, how is kenya a threat to the giants inn the world. Is worldbank trying to kill the Nairovention? Is it that WB does not like invention made in africa?
  3. V

    VictoryMobileNetwork Member

    Aug 9, 2012
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    Victory Mobile Network supports the fast track mobile payment systems development in East Africa, and Kenya in particular. Big-up Nairovention, that's your local cup of coffee n' doesn't need WB's sanction!

    Victory Mobile Network.