Safaricom opens M-Pesa to its rivals

Safaricom opens M-Pesa to its rivals

10 JUL 2014

Other operators are being granted access for the first time to the all-powerful network of agents that underpin the dominance of mobile money service M-Pesa, according to Business Daily.

As a result, subscribers to rival money services such as those offered by Airtel, Orange and yuMobile will be able to pay in and collect cash from M-Pesa agents, a huge boost to the upstart services.

“We made a strategic decision in February 2014 to remove all exclusivity provisions in our M-Pesa agent contracts,” said Safaricom corporate affairs director Nzioka Waita in a statement.

“All our 85,000 M-Pesa agents are, therefore, free to engage with whomever they please (this will include other mobile money service providers).”

Safaricom will retain the current level of commission it pays agents.

Establishing a large network of agents is essential to the success of any mobile money service because they enable subscribers to more easily pay in and collect money sent from friends and family.

Conversely, money services with small numbers of agents tend to struggle. Hence, the current move should boost the smaller players in Kenya.

However there is less motivation for a dominant operator to open up its agent network to smaller rivals.

Safaricom’s decision comes just before the Competition Authority of Kenya rules on a petition made by Airtel which asks for Safaricom’s network to be forcibly opened up.

The country’s dominant operator claimed the decision to open up was a commercial one and not a case of jumping before it was pushed.

Airtel has led the charge on gaining access to M-Pesa’s network. It has argued that the country’s mobile money services should be integrated at the technical as well as distribution levels to boost competition. Currently there is no interoperability between the rival money networks, meaning money paid into one service can only be delivered to users of the same service.

Interoperability is seen as key to mobile money take-up. A group of operators in Tanzania recently struck the first interoperability agreement for mobile money in Africa.


Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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