Technology

New York-based agency lauds Kenya’s mobile money growth

m-pesa

A Safaricom agent transacts at an M-Pesa outlet. PHOTO | FILE

The government’s nod to banks and telecommunications companies to run cashless transactions has been hailed worldwide as promoting access to financial services in the country.

New York-based Transparency Market Research’s in its latest report titled Mobile Wallet Market - Global Industry Analysis, Size, Share, Growth and Forecast 2012 – 2018 says that active involvement by the government has greatly helped promote penetration of cashless services.
“Government initiatives to encourage the use of mobile wallet are accelerating in emerging markets such as Kenya and Philippines due to the larger gap that can be accomplished by joint ventures between government, telecom companies, and financial institutions,” says the report.
The report observes that continued increase in smartphone penetration and mobile data usage has created a convenient and environment-friendly nature of mobile wallet industry, propelling the market to new heights.
Kenyans, notes the report, have also embraced use of mobile phone based transactions to pay for goods and services at supermarkets, restaurants, petrol stations, gyms, car parks and stadiums.
Recently, the government sanctioned use of cashless fare payment in public transport that has since been deferred awaiting provision of point of sale machines to matatu operators ahead of its official rollout.
Nairobi County has also rolled out its cashless system where motorists are now paying for parking via their phones.
Mobile money service M-Pesa is notably a leader in this field but its dominance could soon be tested once Equity Bank rolls out its Mobile Virtual Network Operation ( MVNO) that will enable its 9.1 million customers access accounts from mobile phones using a thin SIM card provided by its partner Finserve.
Tangaza and Zioncell have also obtained licences ready to challenge M-Pesa’s market dominance. However, the mobile money operator Safaricom has since lodged a complaint over security fears linked to the SIM-based technology, saying it could expose its M-Pesa users to vulnerable attacks by hackers risking billions of shillings.
According to the report, rapid growth in the mobile wallet market is threatened by security concerns, especially in the remote areas where awareness of the technology is low.
The report covers banks, MVNOs, payments network, intermediaries, merchants and customers.

Kenya is a leader in cashless transactions based on penetration of mobile phones.

Wide usage of mobile devices has seen more people enjoy better financial services at their doorstep without a need to travel long distances to access a bank or savings and credit society.

[email protected]