Mobile money opens smooth traffic for business transactions

Products like M-Pesa represent attractive revenue centres, promising to rake in over nearly $124 billion in the next five years for developers, operators and related businesses.

Research firm ABI predicts that by 2013, over half a billion subscribers will use their phones for mobile-commerce.

But the attraction is not restricted to the mobile sector.

Recent moves in the financial sector indicate the traditionally technology-shy Kenyan banking community is also warming up to the cost-saving benefits of mobile money services.

“We see our partnership with M-Pesa as the largest outreach programme in corporate Kenya’s history,” said Martin Odour-Otieno, the Kenya Commercial Bank CEO.
KCB has become the first Kenyan bank to state its intention to ride on M-Pesa technology to extend its reach.

The bank hopes to use the service to attract small traders like Ms Mwatela who require micro-finance products such as loans to build their businesses as well as using the tool to recruit the traders who do not have formal bank accounts.

Even with the interest of some members of the banking community, it is still a two-horse affair in the mobile money transfer market.

Six months ago, some players pledged to unleash their ‘M-Pesa killers’, the fighter brands that aimed to compete for the big revenues and wide publicity that the pioneer service had marshalled. They are yet to create impact.

Essar, which had indicated that it would roll out a system with Obopay, is yet to ink a deal with the America-based online payments channel, while Telkom Kenya is said to be reconsidering its intention to launch a mobile money transfer product in the next two years.

One of the challenges the new players are facing is the customer loyalty and the temptation to be a copy-cat of what is already in the market.

Competitors will also have to mount a restless campaign to leave a scratch on the market surface and confront constant product reviews by leaders that have realised that value-addition, pricing, and customer care were the key platforms from where revenue is minted.

Among the financial players, most companies have gone back to the drawing board hoping to come up with distinct services from the two local market leaders, M-Pesa and Zap.

But Zap, which aspired to build on the gains made by M-Pesa, has run into operational headwinds after its much anticipated launch a few months ago.
Having recruited nearly 300,000 users, who can access the service through a network of over 4,000 agents, Zap’s growth is taking off at a higher speed than M-Pesa did in its early days.

Positioned as an m-commerce solution as opposed to a money transfer product, Zap allows customers to gain access to money in select bank accounts, as well as pay for bills, products, and services.

But consumer awareness on available outlets is not high and market players say it is yet to push past the high publicity and visibility enjoyed by its competitor.