M-Pesa has played a major role in bringing financial services to Kenya’s unbanked population. Serving 56% of the population, mobile money has had a major impact on Kenya’s economy – approximately 25% of the country’s GDP flows through M-Pesa. Safaricom’s introduction of the Lipa Na Mpesa service was aimed at bringing the benefits of cashless transactions to business operations. This would eliminate the risk of carrying and transporting cash to both large and small businesses.
Recent reports indicate that Safaricom will be expanding their Lipa na Mpesa service to include NFC SIM cards. Through NFC, merchants who partner with Safaricom will be able to facilitate a contacless means of payment for their customers. This is useful to many businesses PSV operators, supermarkets, vehicle service stations and those who provide loyalty services to their customers.
Official sources from Safaricom confirm that the mobile operator is exploring possibilities along this direction.
The implementation of contactless mobile payments promises growth in Kenya’s e-commerce sector. The government has been carrying out a PKI infrastructure pilot which if deployed nationwide will support this sector. There have also been major efforts to digitize government services including payment of taxes and several counties have forged partnerships with Safaricom to meet this target.
The July deadline for PSV operators to convert their payment systems to cashless platforms has also been of benefit to Safaricom which is offering matatus their Mpesa system as a solution pitting it against Equity’s Beba Pay cards.
Safaricom mobile money accounts serve 20 million Kenyans compared to the country’s 4 million bank accounts. This gives the mobile provider a great advantage upon rolling out their NFC mobile wallets – the ability to reach mass market with ease.
A spokesperson at Safaricom acknowledges that the company is looking into how they could expand their Lipa na Mpesa service, “In a bid to drive relevant solutions, we are continuously looking at ways to innovate taking advantage of the changing market dynamics and technologies,” she says. “As such we are looking at new integration opportunities for Lipa Na M-PESA that have been brought about by evolving technologies. It is however too early for us to give a view on which direction we will pursue.”
Equity Bank has also been making waves in the mobile space with its bid for an MVNO license. The bank has since gained the confidence of Kenya’s security agencies and now only awaits scrutiny by CCK’s technical committee after which it can begin doling out its SIM cards to the public.
Where other banks have failed to bring financial services to Kenya’s mass market, Equity was able to thrive. Equity’s journey towards getting its 10 million accounts included utilizing a system of banking agents, this brought financial services closer to the unbanked allowing more customers to open accounts with the bank. Equity now wants to leverage its customer base to bring in more revenue by offering mobile phone services.
The dominance of Safaricom in the market means other operators are recording losses, this has brought about the exit of Yu and a decision to restructure operations by Orange. 2 more applications for MVNO licenses – Zioncell Ltd and Mobile Pay Ltd – are set to be approved along with that of Equity, upon approval this will be Safaricom’s new competition – all of them gearing up for mobile payment revenues.
