M-Pesa, the mobile money system that is the pride and anchor of Kenya’s homegrown technology community, has had plenty of hype and excitement since it launched in 2007 says Yinka Adegoke, Quartz Africa editor
But in the last fortnight there have been two key M-Pesa news developments which have been covered by the media without the usual fanfare.
The first piece of news is that Kenya’s regulators have convinced local mobile money competitors to enable interoperability. So, for example, this allows Safaricom customers to use M-Pesa to send money to an Airtel Money customer, which currently isn’t possible. To be clear, Safaricom has built a strong enough dominance in the market (around 70% market share) that this might have little impact on the Kenyan market for the foreseeable future.
But things start to get more interesting when you consider mobile money is still at a very early stage in many other African markets and even beyond the continent.
Then a few days later came the news UK’s Vodafone Group had transferred a 35% stake in Safaricom to its South African subsidiary, Vodacom in a $2.6 billion. The news rightly grabbed plenty of financial news headlines but not as many in terms of its operational impact.
Now that more of Safaricom’s ownership structure is consolidated with a South African holder, it appears there will be more focus on a pan-African strategy, particularly through its M-Pesa crown jewel. Safaricom and Vodacom made no secret of their ambitions to explore this option. Vodacom has tried unsuccessfully in the past with M-Pesa in South Africa, but that doesn’t mean the mobile money platform couldn’t work in many other promising African markets, especially if Vodacom works closer with Safaricom.
In fact, when you join the dots on both pieces of news, you can envision how a rising tide will lift all boats in a genuinely competitive pan-African mobile money landscape that involves major players like MTN Mobile Money, Orange Money and Airtel Money among others. The hype about M-Pesa has been great, but even Safaricom’s own chief executive Bob Collymore has described its technology as “clumsy”. This could all change on a continent-wide scale—and not just for M-Pesa.
It will take time—years, not months—but interoperability, pan-African competition and open markets will drive several African tech sectors and local companies to take an unassailable and sustainable global lead in mobile money.