Mpesa takes on Banks with Mpesa Prepaid Card

 

lipa na mpesa cardToday, Mpesa announced it was piloting an Mpesa Payments Card, a  Lipa na Mpesa prepaid card. Mpesa card was inevitable, given the Kenyan local cards versus mobile payments turf wars pitting Kenyan Banks on one end vs Safaricom.

Techweez reported,

“The card, mirrors a user’s M-Pesa account, meaning whatever amounts are in your M-Pesa wallet are reflected in the card.”

 

The Lipa-na-Mpesa Payments card works at acquired mechant points

“The card is NFC enabled where a user can Tap and Go at the point of checkout when making purchases for goods and services.”

Most interesting, the cards work on proprietary custom hardware Point of Sales

The card is to be used at merchants for purchase of goods and services and will have its own Point of Sale System”

And…

it links up with your phone, so you can receive SMS notifications.

The card is being trialled in a pilot internally

“with 1,500 of its employees using the card to pay for their meals at the company’s cafeteria”

 

What does this mean?

 

Safaricom now owns and controls a complete vertical, end to end: SIM card, Communication network, Agents, Merchants and now, Card and Point of Sale.

Mpesa = (Bank + Visa, Mastercard + Telcos + ATMs + Merchants) combined

Having its own Point of Sale System will tighten Mpesa’s grip on payment channels. Only Mpesa products will work on it. Just like Safaricom decides who appears on your SIM card Menu.

 

What is going on?

 

It seems odd that a company renowned for mobile payments is taking us back to cards, even after successfully scaling mobile payments in Kenya. Perhaps competition from Banks at merchant and agent level has prompted this move.

IMG_2897

Kenyan Banks have always been on the back foot, trying to catch up. Eventually they came together to take on Mpesa. Banks have swamped customers with Visa and Mastercard branded debit cards, that let you pay at acquired merchants using Point of Sales card terminals and withdraw cash from ATMs, and bank agents with card terminals.

Already, Mpesa users can make withdrawals at ATMs. Mpesa is simply expanding options for its customers’ mobile wallets to include what banks offer – card payments.

Banks combined are yet to catch up,as per the Central Bank of Kenya statistics they have:

  • lower cards issued versus Mpesa subscribers (19 million)
  • lower acquired POS merchants versus Lipa na Mpesa Merchants (44,000 merchants)
  • lower bank agents versus Mpesa’s mobile money agents (more than 83,000 agents).

To be fair, it is not the first time a Telcos has got into the card payment business. Airtel launched a Airtel Visa Card in February 2014. But hey, this is Kenya, Mpesa territory.

 

 

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Comments

  1. That is the greatest idea ever

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