Kenya’s financial regulator – Central Bank of Kenya may force Safaricom to allow its vast network of MPESA agents to operate other mobile money services. The move would come to life if it implements guidelines intended allow seamless transfer of cash between mobile money service providers in the country. According to new proposals from the bank, a review of payment systems will consequently force Safaricom to open up it’s wide network of MPESA agents to other providers.
The new proposals were revealed on Wednesday when the regulator unveiled the process for public participation. If in fact the proposals are adopted, the move may threaten Safaricom’s dominance in the mobile money market as we know it. Considering Safaricom’s financial muscle which has contributed immensely to its success while intimidating competitors, opening up MPESA network to competing providers will effectively mean the likes of Airtel and Telkom can expand very fast to anywhere that MPESA exists.
Proposals in the new draft regulations;
According to the new draft regulations, CBK intends to harmonize cross-network mobile money transfer services, enabling subscribers to withdraw their funds from an agent of their choice. This basically means, someone can withdraw money in their Airtel money wallet from an MPESA agent and vice versa.
Additionally, if the draft regulations are adopted, someone on a different network such as Airtel can use their wallet balance to pay for bills through Safaricom’s Lipa na MPESA service. It’s a direction the regulator deems necessary to drive financial inclusion in the country as well as entrenching mobile money services to all Kenyans.
Currently, users on different networks can send money to another provider, such as from Airtel Money to MPESA, but cannot withdraw money held in a competing service. For instance, you can only withdraw money from MPESA through an MPESA agent and money in T-Kash through a T-Kash agent. These rules are obviously expected to push Safaricom in the opposite direction, threatening one of its most successful services.
What the report aims to achieve
According to the report, the new guidelines will enable users to affordably access their stores of value from different channels and providers to seamlessly pay for goods and services that will facilitate economic activities.
It should be noted Safaricom has had a difficult time opening up it’s mobile money network to rivals arguing it would expose its lucrative MPESA mobile money platform to stiff competition. At the moment, an estimated 30 million people in the country depend on MPESA mobile money service to make important transactions.