Africa’s leading mobile money platform, M-Pesa, is partnering with Visa to launch a virtual payment card in a bid to capture some of the continent’s US$40-billion/year subscriptions market.
The M-Pesa Global Pay Visa virtual card will allow users to securely pay 100 million foreign merchants like Amazon and Alibaba from their mobile phones, without the need for credit cards or accounts with processors such as PayPal.
M-Pesa Africa MD Sitoyo Lopokoiyit.
The virtual card is also targeted at the fast-growing markets in Africa for services like Netflix and Spotify, said M-Pesa Africa MD Sitoyo Lopokoiyit.
Transactions on the virtual card will be secured with a unique security code sent to the user’s mobile phone
The virtual card is initially available to more than 30 million M-Pesa users in Kenya and will be rolled out to Tanzania, where testing is going on, Mozambique, Congo, Lesotho and Ghana by April 2023, Lopokoiyit said.
M-Pesa launched 15 years ago as a simple money transfer service and now accounts for roughly half of Safaricom’s revenue as consumers use it for purchases, savings, borrowing and insurance. Safaricom is partly owned by South Africa’s Vodacom Group.
“A lot of M-Pesa customers today don’t have bank accounts… [The virtual card] is a catalyst for e-commerce and digital payments,” said Visa official Alex McCrea.
Transactions will be subject to the M-Pesa platform’s limits of KSh150 000 (R20 000) for a single transaction and a daily limit double that. Users will be able to use the virtual card while travelling abroad.
Transactions on the virtual card will be secured with a unique security code sent to the user’s mobile phone and the user’s M-Pesa personal identification number.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
M-PESA, the mobile money service of Kenya’s largest telco has officially reached 50-million active users across Africa it is now, by the sheer size of its active user base, the most popular mobile money platform on the continent and the largest financial technology in Africa, says a statement from Safaricom.
The service counts the majority of its users in Kenya, more than 29.1 million, in which it also enjoys near-utter ubiquity across the country’s cellphones with nearly 99% of the market share. The service is also available in Tanzania, Mozambique, DRC, Lesotho, Ghana and Egypt.
M-PESA is now, by the sheer size of its active user base, the most popular mobile money platform on the continent and the largest financial technology in Africa.
M-PESA was initially launched in 2007 and has been constantly improved through new features and services that have propelled it to the status it enjoys today. The platform has also been responsible for the continued closing of the financial inclusion gap across the continent, and especially in its home of Kenya.
“14 years ago, we launched M-PESA to connect our customers to each other and to different opportunities. We are delighted to celebrate this remarkable milestone with our more than 50-million customers across the continent,” said Sitoyo Lopokoiyit, MD, M-PESA Africa.
In its current form, M-PESA offers two key options – it provides financial services to both private individuals and businesses. Customers can use the platform to send and receive cash from over 200 countries and regions across Earth. Investors can use the platform to make bull payments, and businesses can leverage M-PESA to process payments as well.
More than 500,000 businesses transact more than $7-billion every month through M-PESA, Safaricom says. The company also says it has more than 500,000 M-PESA agents supporting the platform and its services. Recently Safaricom also launched a smartphone super-app that contains all of M-PESA’s available services, as well as a host of new features.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The world’s largest mobile money platform, Safaricom’s M-Pesa Africa has appointed Sitoyo Lopokoiyit as its new Managing Director. He is a “mobile financial services expert who has directly managed mobile money in two of the largest markets in the world – Kenya and Tanzania,” reveals MyBroadBand. Lopokoiyit joined Safaricom in 2011 as head of M-Pesa strategy and business development. He then went on to Vodacom Tanzania in 2016 where he worked as the director of m-commerce, before re-joining Safaricom in 2018.
Sitoyo Lopokoiyit
It could be recalled that Kenyan Senators have been working towards breaking up Safaricom so M-PESA can be a separate entity to prevent what they call undue monopoly. They believe that Safaricom should split into two firms – Mobile Services and M-PESA. According to The Star, a split would see the mobile telephony service regulated by the Communication Authority of Kenya (CAK) and the M-Pesa division regulated by the Central Bank of Kenya (CBK).
A recent report by TechWeez revealed that senators believe there should be a level playing ground for the likes of Telkom and Airtel Kenya who operate at the mercy of Safaricom as they owe it billions of shillings.
“The market is not competitive any more. The other operators should be allowed to operate, by giving the dominant operator its right, but also allowing the others to operate, and allow innovation in the country,” says Senator Petronilla Were of the ICT committee.
Senator Irungu Kang’ata echoed this sentiment, saying “in Kenya, you have a situation where one single player dictates how much you are going to pay for data bundles, for calls and Short Message Service because it controls almost 90 per cent of the market”.
“In such a situation, I do not foresee any other entity growing. We are not going to create more jobs and innovation in that industry because of the dominance of one entity.”
Senator Enock Wambua urged Safaricom to confirm whether it is a communication company or a banking institution. “I would suggest that Safaricom is split into two. Safaricom the communication company, regulated by the Communication Authority of Kenya (CAK), and the M-Pesa division regulated by the Central Bank of Kenya.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
As African startups make inroads into fintechs, the biggest opportunities are in savings, wealth management and insurance. This was the opinion of the chief executive officer (CEO) of Africa’s largest mobile money operator, M-Pesa Africa who says that there is still ample room for growth for mobile money throughout Africa, according to Sitoyo Lopokoiyit, interim CEO of M-Pesa Africa.
According to Lopokoiyit the future of mobile money in Africa is fantastic. “We are leapfrogging the card generation and going straight into digital financial services and payments.”
Sitoyo Lopokoiyit, interim CEO of M-Pesa Africa
It could be recalled that Kenya’s leading telecoms operator Safaricom launched the revolutionary mobile money platform M-Pesa in 2007, a step many doubted its viability then. M-Pesa which bypassed the traditional banking system allows subscribers to transfer money between one another and deposit and withdraw cash through a network of agents. The service has presently been expanded to several other African countries and the CEO believes that the future growth in the fintech space resides within the provision of financial health solutions.
“On financial inclusion when M-Pesa started, it was about 23% [in Kenya]. In places like Kenya, it is [now] 84% and above; in Tanzania, it is about 70%. But while that has been really good, financial health has remained relatively low … at about 20%. In this area of fintech and mobile money, we need to start looking at areas in which we can provide savings, wealth management and insurance to be able to cushion customers on the shocks that they may have as they live their lives,” he said.
Covid-19, said Lopokoiyit, has, once again, made the impact of external shocks on financial health abundantly clear. He wants fintech players to be more innovative in developing these solutions and finding ways to make financial products – even those such as government bonds – available to a wider range of customers. M-Pesa is hoping to encourage this innovation by opening its platform even more to third party developers.
“How do we encourage more developers and fintech to come into our ecosystem and innovate?” he asked. “Today in Kenya, there are 29,000 developers on our platform. I would like to see 100,000 developers across Africa use our APIs to develop innovative products and services.”
Referencing the recent announcement that Silicon Valley financial services company Stripe had acquired Nigerian start-up Paystack, Lopokoiyit explained partnerships of this nature are key for African fintech companies to get the valuations they deserve. “If you look at the talent that is being recruited from Africa by the big tech companies it shows that there is potential.”
The intention to establish M-Pesa as a super app that will feature various services such as transport, tourism, e-commerce and utility payments on one platform, was reiterated by Lopokoiyit. He believes partners would be able to publish their offering onto the super app, immediately adding value to the M-Pesa subscriber (more choice) and providing 40 million potential customers to the partner (access to market). “I want customers to look at [the M-Pesa app] as much as they look at WhatsApp on a daily basis, or Instagram.”
Lopokoiyit wants fintech companies and innovative start-ups to embrace engagement with regulators in their jurisdictions. “We work with them every single time. There is no product and service that we launch without the regulator. We actually have discovered it is better to, even on a concept stage, to engage the regulator.”
He further touted the importance of considering a regulator’s perspective when they fulfil their mandate to protect the consumer from systemic risk. “We are commercially driven, we are about transforming lives, but the regulators look at it from a bigger and broader scope; they interact with other regulators across the world, so they do add a lot of value,” he said.
According to Lopokoiyit, Covid-19 pandemic was a the great accelerant for businesses because the impact Covid-19 has had on digital financial services has led to the speed up of adoption, as well as regulatory change and innovation.
There are three phases when looking at the impact of Covid-19, he explained. First, there was the response period from March 2020 when most countries went into hard lockdowns. During this time, various businesses, regulators and governments were looking specifically at how they could assist communities. “We worked, for example, with central banks on lowering or zero-rating transaction fees below $10 to drive more financial inclusion,” he said. Other projects included working with governments to enable disbursements of much-needed relief finance to vulnerable communities. “That showed the impact of mobile money especially in Africa.”
The second phase is one of rebuilding. “This is really critical for the future of businesses in Africa. As we open up, how we look at SMEs and micro-SMEs; how can we help them get back to business?” he asked. Possible interventions could be in one or all of four areas: capacity building; providing working capital at affordable rates; value-added services such as accounting solutions or simplifying cross-border payments; and improving connectivity at affordable rates.
The third phase is reimagining. “We’ve seen areas such as e-commerce really accelerate in the last nine months. Somewhere like Kenya, where we expected to be in 2025, has happened now.” It is time to rethink how to enable businesses to operate in the new dispensation post-Covid-19.
As an example, he listed the number of M-Pesa merchants at 157,000 in March 2020. By September of last year, this had already grown to 170,000. “I think this shift is permanent towards the digital channels,” said Lopokoiyit.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The growing adoption of cashless policies across many African countries has been touted as a very impactful strategy in the fight against the spread of Covid-19 in the continent. In most African nations, governments have undertaken extreme health measures such as sensitization campaigns, lockdowns, curfews, and the production of test kits and masks. African tech companies and startups have also not been left behind and are developing digital solutions to meet the unprecedented challenges of the coronavirus.
Sitoyo Lopokoiyit, the Chief Financial Services Officer at Safaricom
These solutions include Check-in App And Symptom Tracker that was developed by Ghanaian health startup Redbird (formerly Redbird Health Tech), and Chipper Cash that allows to send and receive money across the African continent at no fee. By doing this, platforms like Chipper Cash have significantly assisted in reducing the physical handling of cash. Going cashless has so much been encouraged as it minimizes the risk of coronavirus. We have also seen different other organisations including Safaricom and Jumia encouraging this.
Safaricom partnered with public transport sector players to accept cashless payments through M-PESA. “Many businesses are seeing an increase in demand to accept M-PESA payments due to the ongoing concerns around the Coronavirus’’ Sitoyo Lopokoiyit, the Chief Financial Services Officer at Safaricom says adding that “our partnership with the different public transit players brings the convenience and safety of M-PESA to this crucial sector given the widespread uptake of public transport across the country.”
Jumia Kenya also announced that it had stopped the use of cash for payments with all customers now having to pay via mobile money or bank cards via JumiaPay platform. “This is according to Central Bank of Kenya guidelines that we deter from use of cash as it has been found to be a major vector for Coronavirus infections. You can pay upfront or await delivery to make payments via mobile cashless platforms,” Jumia Kenya MD Sam Chappatte says.
Platforms like Chipper Cash are allowing customers in Kenya to transfer money of up to Ksh.2 million per day or Ksh.15 million per week. Chipper Cash was developed in the heart of Silicon Valley in San Francisco by Uganda’s Ham Serunjogi and Ghana’s Maijid Moujaled, Chipper Cash and launched in October 2018. It’s available on both Android and iOS mobile devices. “Chipper Cash is enabling Africans to transfer and receive money across Africa in a fast, free and easy way right from their mobile phones. We hope to expand this untapped opportunity in Kenya and continue bringing Africa together, one transaction at a time,” Co-founder and CEO of Chipper Cash, Ham Serunjogi says.
The World Health Organization (WHO) recently reported that Africa would see coronavirus cases rise from current thousands to 10 million within three to six months. Africa’s tech innovators offering low cost and more advanced tech solutions like Chipper Cash have taken the lead in developing solutions that curb the spread of the virus. Going cashless is setting us up for a cashless society and could indeed be one of the positives to pick from the coronavirus pandemic.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
