Pesabit #004 : Equity Bank & Safaricom Run Neck and neck over SIM Overlay

Safaricom Equity Bank Historical profit COmparison Chart

In the past 3 months, two juggernauts in Kenya have clashed over the introduction of SIM overlay technology into the market – Equity Bank Group (Bank) and Safaricom ltd (Telco).  Safaricom  Ltd.  the largest Mobile Network Operator in Kenya (67.9 % market share) while Equity bank is the largest bank by customer base (8 million +).

As the incumbent mobile financial services provider, Safaricom faces a direct threat to its dominant sway, MPESA from A controversial SIM overlay technology set to be introduced by Equity Bank into the market through its subsidiary Finserve. Equity bank made a strategic move in acquiring an MVNO license from the regulators, Communications Authority of Kenya. Through this license, Equity can venture into the cellular network business and more crucially, the mobile financial services business – MPESA’s turf.

By leveraging its proprietary ownership of the SIM, Safaricom has continued to lock out financial services firms from its service platform; effectively acting as gatekeeper. The trouble is

A single mobile device is not supposed to be restricted to a single service provider, especially when different service providers having the mutual business interest over a single mobile phone users

It is easy to see why it has been labeled a monopoly and followed by cries to open up their platform. The mobile phone is a clear winner as a form factor in East Africa. Knowing this, financial services firms have been itching to catch up after losing out years back to Telcos. [Read more…]

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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…]