A new World Bank report suggests mobile money operators to allow interoperability.
Interoperability will reduce domination by some mobile operators and will make the service even more accessible to thousands who need them, says the report.
According to the report, Safaricom’s M-Pesa controls 68 percent of the entire mobile money market share. M-Pesa claimed over 18 million subscribers with deposits surpassing Ksh185 billion in their last quarter.
Although Kenya has more than three mobile money operators, none allows cross network services. Only Tangaza and Mobikash offer mobile money across networks in the country but the services which serve parts of Nairobi are just a drop in the ocean compared to nearly 30 million mobile subscribers across the country.
This move might not go well with the mobile money operators as it would mean a cut in their profits. Safaricom made Ksh 17 billion from M Pesa alone.
According to the World Bank, transactions across networks expand a firm’s clients and even increases revenue through surcharge. Mobile money operators however see this as a threat to their business after investing much in their infrastructure.
Safaricom’s chief Bob Collymore says, “The move is miscalculated and none of our clients have put demand for it”.
On the contrary, Airtel money, which serves a smaller fraction of the market and YUCash, hopes the service would be good for users in Kenya and the firms themselves. The two firms support the move.
There are more than 40 million mobile money users in the world and Kenya tops the list with 47.5 percent of the whole global sum. There are 18.9 million mobile money users but most of this are spread across four mobile networks lead by M Pesa, Airtel Money, Orange Money and YUCash.
The World Bank says Kenya’s mobile money market equals nearly 50 percent of the global mobile money subscription. There is need therefore to harness the service by allowing transactions across networks and reducing unfair competition.
The World Bank says that a dominant player like M-Pesa’s 68 percent will always drive the sector for its gain. Proper regulation is needed to end these competitions.