Why we should Slay Mpesa, and save the town

article2Kenya and east africa’s mobile money systems are overly reliant on Telco’s networks and SIM modules. The status quo is detrimental to Banks, Non-banking financial institutions and a whole host of digital token value services e.g sports betting and prepaid electricity tokens.

Telcos, now Mobile Money Operators, are a Banks wet dream. Peer to peer money transfers in Kenya almost always route through a mobile network operator’s SMS, SIM card and USSD channels; they are the gatekeepers.
[Read more…]

Kenya clamps down on Cash

From my Twitter timeline, I can tell there is a lot written about the ongoing war on cash; an international war on physical paper and coins. Today, it was much closer to home.

Central Bank’s new tough rules to monitor large cash transactions was an article from the Standard Digital dated January 28, 2016 [Read more…]

Why Bitcoin Matters

Bitcoin article

Bitcoin, a little know currency that emerged in 2009, has achieved what was previously thought impossible, a digital cash. It went up from a market cap of under $1 million to today’s $6 billion. It also got Central banks excited by the concept of issuing virtual currencies, and a real shot  at eradicating cash. Never has the role of Bitcoin been more clear. In a world of state issued digital monies, a censorship resistance digital bearer asset is the only check against bad government. [Read more…]

5 more things they didn’t tell you about m pesa

Cover Mpesa myths

Despite a fair number of attempts at elaborately fleshing out Mpesa for readers, in this article I outline 5 more things left out  by:

Claudia McKay & Rafe Mazer did an article for the CGAP titles “10 Myths About Mpesa: 2014 Update” – a follow up to a previous article by Claire Alexandre “10 things you thought you knew about Mpesa”. In both of these articles, 5 crucial things were left out that you should know about!

Mpesa is used on a contractual basis from Vodafone Group.

M-pesa is not a Kenyan invention, by any stretch. M-pesa is owned by Vodafone Group, was partly funded by the UK DFID, conceptualized by Nick Hughes – an executive at Vodafone – in 2003 and finally project managed by Susan Lonie – an m-commerce expert – from pilot to commercial operation.

A confluence of factors – fashionable sustainable development, microcredit prospects in East Africa and a willing mobile network operator, Safaricom – meant that Kenya was a hotbed for testing a pilot. [Read more…]

FinTech Takes on East Africa

Introduction: Leapfrogging Sub Saharan Style


Leapfrog – is commonly associated with East Africa.  Sub Saharan Africa’s potential to overcome persistent challenges in novel ways abound in heaps –attributable to a convergence of forces i.e. a rapid technological boon and a resurgence of SSA development activity. As an example, the wild success of a simple communication tool, the mobile phone transformed traditional banking models and prompted thoughts on next generation financial services. SSA is poised to ride on technology rails and in a truly unique fashion leveraging technology to break down traditional barriers to financial access.

Bright B. Simons, on a past post for the Harvard Business Review

“In much the same way that Africa’s lack of significant telecom capacity was a boon rather than a hindrance to the emergence of mobile telephony, its lack of legacy infrastructure for everything ranging from waste management to energy utilities could provide the appetite — non-existent in the West — for genuinely transformative, future-friendly reconceptualization of the very notion of infrastructure”

Breaking Banks: Mobile Money Operators redefine financial services

Take financial services in East Africa which are increasingly offered through a simple communication tool, the mobile phone. The far reaching implications of fusing technology and financial synergies to address developmental challenges are of a grand scale. For the unbanked, access to financial services, credit, savings accounts, investment schemes and innovative financial products are now feasible en masse through last mile cellular network channels. [Read more…]

PesaBit #003 : Why the Matatu Cashless payment initiative failed

bebapay-googleafrica-tweetA little more than a year ago, Equity Bank and Google partnered to offer Nairobi commuters NFC based prepaid cards and simultaneously equipped matatu touts with android phones accepting NFC payments. No issuing, acquiring and transactions fees were involved; matatu owners now had an auditable tool to aggregate daily collections straight into their bank accounts. In light of Kenya’s fast tech based economy, on paper and high up in the boardrooms, this was ostensibly a brilliant idea.

Today, the online business daily ran a title “Family bank joins quest for cashless fare license”. The Kenyan Government has been keen to formalize the 218 Billion ($ 2.44 billion) public transport industry – matatus (collectively, vans and buses). Despite its obvious far reaching implications on curbing corruption, inefficiency, regulation and taxation– the move hit a snag and I wonder if Family Bank have an alternative to where its predecessors – Equity Bank and Google fell short. [Read more…]

PesaBit #001: 7 Reasons why East Africa is a Mobile payments and FinTech HotBed

Image credit: abmagazine

Image credit: abmagazine

Kenya and broader East Africa will lead digital finance and digital currency innovation in Africa. Going forward, I expect financial services and Technology (FinTech) in Sub Saharan Africa activity in Kenya to tap into mobile phones and mobile devices as a form factor.



7 reasons why I tip mobile payments and mobile financial services [Read more…]

The Role of Regulators in Mobile Money Deployment

PREAMBLEmobile runner

Mobile Money (MM) is hailed for accelerating financial inclusion and its potential for reining in an even greater multitude of unbanked global citizens into the formal financial systems. To harness its potency, policy and regulatory environments hold the key to exhausting its potential. It falls within the domain of Telecommunications and Financial Regulators/ Central banks. Central banks have asserted their regulatory authority in more recent times as Mobile Money (MM) has emerged as a remedy for financial exclusion risk. Central Banks in developing countries, including Sub Saharan Africa, are keen on leveraging MM to further their cause.

First, it’s important to state that Central Banks in emerging economies have a vast and vested interest in the success of mobile payment services. Indeed, as mentioned above, mobile payment services can contribute directly to the economic growth of the country – GFG group

Regulating MM presents simultaneous challenges and profound benefits. Regulatory and policy objectives have to be balanced with sensitive competitive market dynamics. Restrictive regulation can stifle competition, innovation and market adoption.

The importance of policy and regulatory frameworks in mobile banking development has inspired empirical research reports on the subject  such as What Regulatory Frameworks Are More Conducive to Mobile Banking? – World Bank. A 2013 GSMA report, titled Mobile Money: Enabling regulatory solutions, broadly categorized aspects encompassing all pertinent areas of MM regulation. [Read more…]

Money Chasing Mobile: The Threat of Telcos’ Mobile Money to Banks and Card Companies in East Africa

equitympesa2In early March, in an unusual collaborative move, Kenya’s two largest telecoms operators, Safaricom (66.5% market share) and Bharti’s Airtel (17.5% market share), made a joint $100 million bid for the third largest operator, Essar Communications, YuMobile (8.1% market share). Media reports claimed the two would split the spoils; Safaricom would take up Yu’s infrastructure network and Airtel Yu’s 2.7 million subscribers, boosting its market share up to 25% from 17.6%. Reports suggested that Equity Bank had expressed interest in rolling out mobile services and YuMobile’s existing network offered an enticing option. Equity Bank, the largest bank in the region, boasting 8 million customers, is hailed for reining in small and rural customer deposits in its inception years, catapulting it to the helm of the financial services industry. Nakumatt, Mobile Pay and Zioncell were also mentioned as showing interest. Orange, the smallest player by market share (7.1%), is speculated to be planning a wind up of its operations; a move likely to shake up the industry in this region.

Kenya is widely recognized as a model case for mobile banking impetus, apparent from its

An Mpesa Agent with a User in Kenya

An Mpesa Agent with a User in Kenya

ubiquitous mentions at conferences and conversations on the same. 18.6 million registered and 11.6 million active users, a larger base than any other banking institution in Kenya. See more facts here. Concerted efforts to replicate this model of financial inclusion in neighboring Somalia and other developing countries, was actualized with relative success. Zaad, a mobile money service offered by Telesom, the largest mobile phone company in Somalia, averages 34 transactions a month, higher than most places around the world. Bringing in the unbanked population into the formal financial system has far reaching desirable impacts for governments and central banks. Mobile banking has effectively allowed developing economies to leap frog traditional brick and mortar models of banking and achieve a more inclusive financial system – faster. [Read more…]