Safaricom faces battle for M-Pesa customer billions

Safaricom’s stranglehold on the mobile money market could be tested with the launch of a service that allows users to send money across networks.

This is after Safaricom and Airtel agreed to pilot a mobile wallet that will enable Kenyans to send or receive money across networks at no extra charge.

The pilot phase of the platform is set for roll-out on Monday and will involve employees of Safaricom and Airtel with Telkom expected to come on board next month.

“This is a service that will make sending and receiving money across networks seamless and will have a lot of benefits for the users who will not be limited in their options,” said ICT Cabinet Secretary Joe Mucheru.

The interoperable mobile wallet was one of the recommendations in a survey commissioned by the Communications Authority of Kenya (CA) to look into dominance in the telecommunications sector.

One of the recommendations of the report was for operators to set up an interoperable mobile money system to remove costs associated with cross-platform transfers.

According to industry statistics from the CA, M-Pesa commanded 80.8 per cent market share in the quarter ending September 2017.

Safaricom transacted more than Sh1.3 trillion against Equitel, which processed the second-largest number of transactions at Sh322 billion during the same period.

The platform was initially expected to be rolled out in June last year but was shelved as operators failed to agree on certain aspects. At the same time, Telkom Kenya’s re-brand that saw the company shut down its mobile money service further compounded the delay.

Telkom is yet to join the other operators in the pilot with the company saying it is ready to plug into the system as soon as it receives the licence from CBK.

“We have conducted the pilot for our mobile money service which we finished last month and now we are just waiting for the licence from the Central Bank of Kenya,” said Telkom Chief Executive Aldo Mareuse.

Get it right

“We have to make sure everything is right before we roll out because it is a very big responsibility handling people’s money and we have to make sure we get it right.”

Kenya will join fellow East African countries Tanzania and Rwanda where operators have established common wallets.

In Tanzania, operators Vodacom, Airtel, Tigo and Zantel linked their mobile money platforms to one commercial network in early 2014.

According to a report by international telecommunications lobby GSMA published last year, support for interoperability has grown despite initial apprehension on the loss of brand identity among some operators.

Fiona Asonga, the head of the telecommunication service providers setting up the system said it would go a long way in improving competition and service in the ICT sector.