Technology

Mobile phones open business gap in digital money services

802018-01-02

A mobile phone in a shop displays a bitcoin sign in Hong Kong. Mobile technology has improved access to financial services among the poor. FILE PHOTO | AFP

The recent public announcement by BitPesa of a successful funding round to the tune of $1.1 million led by Pantera Capital, brings into sharp focus the growth of alternative forms of what I call “value transports” that continue to ride on the greenfield opportunity that mobile and mobile money have opened up.

While the global remittances remain the low hanging fruit, with Africans in the diaspora sending home billions every year, the really big opportunities are yet to be unearthed and how the pioneer providers play the game will determine just how far and how fast the technology will be entrenched into current and emerging services.

BitCoin is perhaps the better known cryptocurrency with thousands of services built on top of it but there are more than 500 heirs to the throne, with everyone pushing to be the entrenched and globally accepted leader.

“There were more than 530 cryptocurrencies available for trade in online markets as of January 5, 2015, but only 10 of them had market capitalisation over $10 million,” according to Wikipedia.

In a market where mobile money has crippled the business models of traditional financial service providers, forcing them to play ball, I half expect that the various institutions, from saccos to fully fledged banks would be looking into the cryptocurrency movement keenly.

The sole intent of this focus would be to “panel beat” the technology giving it scalable local use cases; if but to ensure a fighting chance against mobile money that is controlled by cash-rich telcos that are looking to diversify.

Apart from the creators of the currencies, we see a growing number of ecosystem or channel innovators building the bridges that would ensure interoperability with “legacy” instruments at scale with a focus on open decentralised systems, multicurrency support and secure real-time transaction processing.

This is where a number of well-known technology players seem to be placing their bets with strategic investments in companies that are trying to either build out such bridges or leveraging the most stable releases out there to address the not so obvious opportunities to be found in connecting to, storing, transiting and exchanging value.

Having made a clarion call for the local technology players to engage actively in lobbying, I am keen to see if this yet to be fully understood opportunity with be met head on by pushback from the August House or other regulator.

Most players, probably as both a mitigation and preservation strategy are quickly setting shop in multiple countries. Play well and live long would be the single statement of advice, for now.

Mr Njihia is CEO of Symbiotic.
Twitter: @mbuguanjihia.