Bankelele had an interesting post up yesterday, detailing how banks need to make peace with MPesa and the challenge it presents to their industry. Sadly, rather than seeing the money transfer system as an opportunity, it appears that some in the banking industry would prefer to see it shut down.
But the post did get me thinking: what next for M-Pesa? And my next thought was payment. Rather than simple money transfer, become almost a bank in its own right, with the ability to issue cards and offer a range of banking facilities, such as standing orders and maybe even loans.
One of the biggest obstacles to E-commerce in Kenya today is the low penetration rate for credit and debit cards. Without the ability to buy things over the internet, most trade will continue to be cash or cheque transactions that are neither as efficient or as quick as money transfer by card or via mobile phone, which M-Pesa already offers.
In order for E-commerce to take off in any significant way, the means to participate in the electronic economy need to be democratised. That means that a majority of the population need access not only to the internet, but also to the means to pay electronically for goods and services.
Will we see the launch of an M-Pesa payment card? Safaricom have not made any encouraging noises about one. Practically, there is little point in launching one while the majority of businesses still expect either cash or a cheque as payment. What we need is for a revolution in payment terms on the part of businesses. Once a majority of companies are able and willing to accept electronic payments on a large scale, the way will be clear for M-Pesa and its subscriber base to make a move. And the banks? They will simply have to play catch-up.
[Image by Andres Rueda]