back to article Kenyan court case could sound death knell for mobile money

Kenya is pretty much the only place where mobile money works. Now, it seems, the banks want to wreck it. Vodafone-owned mobe operator Safaricom runs M-Pesa, the poster child for mobile payments. It has revolutionised the lives of people who were so poor that the banks were not interested in serving them. However, having …

  1. denzil
    Paris Hilton

    greedy bankers . are you sure !.

  2. Anonymous Coward
    Anonymous Coward

    So competition is a bad thing now?

    1. NumptyScrub

      Of course not. However, note that M-Pesa was already competing with banks and apparently winning, so now banks are trying to claw back the lost custom. Custom which the banks refused to serve in the first place, because they couldn't see an easy profit in it.

      Interesting turn of events, really :)

    2. Simon Rockman

      Unusually, in this case. Yes. Because if banks stop telcos from doing mobile money then no-one will do it because the banks are not interested in the poor people the telcos are serving unless the telcos are serving them.

      1. PC Paul

        It would be a victory for the courts if they allowed the banks to clamp down on it BUT also introduced a mandatory banking service so they HAD to provide banking services to anyone and everyone at an equivalent cost to the mobile money that's there now.

      2. Eugene Crosser

        Does it promotes or prevents competition?

        Let me get it straight.

        • Vodafone has introduced "mobile money", with great success.
        • Some local bank(s) decided to introduce their own mobile money, to compete with Vodafone.
        • Vodafone tried to prevent banks from doing that, on the pretext that the technology proposed by banks weakens the security of the SIM.
        • Court gave the bank(s) green light, so both parties can now compete for the customer.
        • There is no sign (so far) of the banks trying to outlaw Vodafone's service.
        What I am missing, when I think that this is good news?

      3. James 100

        "if banks stop telcos from doing mobile money"

        That's the missing link in the logic: nothing here says anyone is trying to stop Safaricom's existing service, just that the banks want to get into the same game. Merely competing with them doesn't do that, unless perhaps the banks plan to run an unsustainably cheap banking service to wipe Safaricom's one out completely, then pull the plug and hope they don't come back - which would be a bit of a stretch.

  3. IGnatius T Foobar
    Trollface

    Kenya

    The only thing most people know about Kenya is that it is the birthplace of Barack Obama.

    1. Arctic fox
      Thumb Down

      Re "The only thing most people know........."

      Only if you define "most people" as co-identical with the BWRP.*

      *Barking Wing of the Republican Party..

    2. Cliff

      Re: Kenya

      For small values of 'most'

  4. tony2heads
    Unhappy

    also used in South Africa

    Although not as widely as in Kenya used because of the banking regulations - the banks saw them coming!

    1. GraemeD

      Re: also used in South Africa

      its was developed in SA, my father is involved in it.

    2. AndyS

      Re: also used in South Africa

      Also used quite successfully in other East African countries, and certainly successful in, for example, Tanzania and Uganda. But it's Kenya which has really taken off.

      Interestingly East Africa has, in some terms, led the world in terms mobile usage. No roaming charges between countries, cheap sim-only deals long before they were normal, mobile money (Pesa just means 'cash' in Swahili), very fast networks in urban areas, etc.

      1. foo_bar_baz

        sim-only deals and leadership

        SIM-only deals were always the norm in mobile pioneer countries. In Finland contract phones didn't exist until 3G phones were introduced, and 2G phones still can't be sold on contract. The laws there have always been in place to ensure competition and protect the customer, so for example comparing prices and switching operators while retaining your number have been made easy.

      2. Richard Altmann

        Re: also used in South Africa

        M-Pesa really got what´s left of the East -African economy rolling. Passing by banks that behave like robber barons. Its M-Pesa or the islamic money exchange. "Brother Abdul? Brother Kenan just gave me 100$. So when his cousin Adnan shows up, you give it to him." It´s not about money laundry for the peasant, it´s about getting money from A to B without being robbed on the way (Western Union and Banks and the likes)

        "very fast networks in urban areas, etc." Pse Sir, don´t make me love. Around 2000 the MTNs and Vodaphones rolled into sub saharan- africa. They promised the governments full, countrywide coverage of mobile connection in exchange for 10 years of not having to pay taxes or other dubious contracts. The results are BTSs on every hilltop, spoiling the african landscape. Only they never gave a shit about bandwidth management. Try to get through to Germany or even Nairobi from Kampala after friday lunch time until monday morning ... on whatever network you are on ... forget it. In Abuja, Capital of Nigeria, people carry 3 mobile phones with different SIM Cards in the vague hope, they might get through to someone or someone might reach them. Don´t mind the monster billboard ads for LTE which frequently collaps under strong winds and kill passing people. Same goes for Addis Ababa, Ethiopia. Djibouti? Forget it. Better get talking drums. Of course every court in sub saharan africa will give way to any law the banks demand. What with the lawmakers being overbribed "by being rich beyond my wildest dreams" by the banks.

  5. webbr23

    Sorry Simon Rockwell - as salacious a headline as it is, this will not sound the death knell for Mobile Money! Safaricom have had an easy run to date with fees that are quite unaffordable for many Kenyans. In the run up to the launch of Equity's MVNO, Safaricom dropped MPESA fees by up to 67%. This simply in anticipation of increased competition. A positive step that will see increased usage!

  6. Anonymous Coward
    Anonymous Coward

    Well, as it happens ........

    "Merely competing with them doesn't do that, unless perhaps the banks plan to run an unsustainably cheap banking service to wipe Safaricom's one out completely, then pull the plug and hope they don't come back - which would be a bit of a stretch."

    This is quite a common practice with startup airlines in New Zealand, especially those trying to compete on international routes.

  7. ecofeco Silver badge

    Big business uses laws to stop competition?

    No way! I'm shocked I tell you. Shocked!

    1. Tom 7

      Re: Big business uses laws to stop competition?

      I thought they got laws written to stop competition.

  8. This post has been deleted by its author

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