July 24, 2012
Is African Mobile Money Becoming Too Successful? WSJ
The developed nations continue to debate the best way of introducing mobile payments. In Africa, and in Kenya specifically, the use of mobile money is already well established. In fact it is doing so well that the World Bank has issued a warning about the way payments systems are developing and the threat of monopoly. The Wall Street Journal reports.
According to the World Bank there are over 40 million mobile money users worldwide and almost half of those are in Kenya, a country with more cellphones than adults.
More than eight in ten of the countryís cellphone owners use mobile money, mostly through the largest mobile network Safaricomís M-Pesa service. The World Bank recommends interoperability across mobile money services.
Although Kenya has more than three mobile money operators, none allows cross network services. Only Tangaza and Mobikash offer mobile money across networks in the country but the services which serve parts of Nairobi are just a drop in the ocean compared to nearly 30 million mobile subscribers across the country.
This move [to interoperability] might not go well with the mobile money operators as it would mean a cut in their profitsÖ
According to the World Bank, transactions across networks expand a firmís clients and even increases revenue through surcharge. Mobile money operators however see this as a threat to their business after investing much in their infrastructure.
The warnings from the World Bank about allowing a monopoly to develop reflect the success of mobile money in Kenya. A post by Izabella Kaminska in the ft.comís Aphaville blog suggests that this could be a model for Europe. The article also provides a description of how the mobile money system was born.
Read full article.
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