One of our staff writes a quarterly round up of the mobile money scene. I thought I’d share it with you this quarter. Always interesting times in this sector…
Mergers & Acquisitions (M&A)
An evident push for industry consolidation across continents saw potential changes in the Ghanian, Indian and Senegalese MNO landscapes. Bharti Airtel (Airtel Ghana) entered an agreement to merge with Millicom International (Tigo Ghana) aiming to displace Ghana’s second-largest market player, Vodafone. In Senegal, we saw Wari make a US$129mn bid for Millicom’s Tigo Senegal; responding to industry rumours of Orange’s initial market interest nine-months prior.
Shifting continents, Airtel India’s acquisition of Telenor was green-lit, providing seamless customer and network integration, while simultaneously strengthening Airtel India’s market-leading position. On the contrary, India’s number two player, Vodafone, made a defensive play to ‘create a stronger asset’ by initiating merger talks with India’s third-largest market player, Idea Cellular.
Product Development
From Uganda’s ReadyPay Solar micro instalment product, Ghana’s eTranzact mobile money card, the launch of Safaricom’s taxi-hailing ‘Little Cab’ mobile-based Savings and Credit Co-Operative Society (SACCO) to Bitwala’s bitcoin M-PESA remittance integration; innovation is rife across both new and old mobile money territories.
Sparking significant market interest, Ecobank Ghana launched the first government-based mobile money product, the ‘TBill4All’ self-service 91-day and 182-day treasury bill. While the first of its kind in Sub-Saharan Africa, the Kenyan government swiftly responded with the ‘M-Akiba’ bond for both Airtel and Safaricom customers.
A push towards the legalisation of the Agency Banking Model in Uganda has seen Stanbic commit to hiring agents with aims to minimise current levels of branch losses (~25%). Ecobank Nigeria has begun rollout of its Agency Banking locations in partnership with Airtel Nigeria.
Market activity from MTN across multiple territories saw the launch of MTN Ghana’s ‘Yello Save’ savings product in partnership with Fidelity Bank, ‘Tap2Pay’ NFC integration and MTN Rwanda’s ‘MoKash Saving’ interest-earning savings product in partnership with the Commercial Bank of Africa (CBA). Due to a lack of commercial viability, MTN South Africa terminated its mobile money payment partnership with the Commonwealth Bank of Australia’s, Tyme. Irrespective, MTN South Africa remains committed in exploring new ways to bring banking services to its customers.
Regulatory Environment
Much to the frustration of Ghanian MNOs, the Bank of Ghana (BoG) is set to impose a third-party intermediary for inter-MNO mobile money transactions. On the contrary, the International Finance Corporation (IFC) has launched its campaign to encourage and promote the interoperability of mobile money services in Tanzania.
Mobile money pioneer, Safaricom, has come under pressure from the Communication Authority of Kenya (CAK). The first area of concern was raised in terms of fee disclosure, with the CAK encouraging transparency via SMS as a replacement for tariff guides used in the past. More severely, the CAK commissioned a report recommending that Safaricom separate its M-PESA business from its communications business. While amendments to banking and communication regulations have been proposed, the changes in law must still be approved.
Kenya also saw the launch of its interbank mobile money transfer platform, Pesalink. As twenty-four banks go head-to-head with M-PESA; Pesalink serves as a complimentary tool enabling customers to make real-time cash transfers between mobile, internet banking channels, ATMs and branches. However, despite positive market traction, the Central Bank of Kenya (CBK) has instructed banks to reduce the Pesalink mobile money transfer transaction time by 50% as the system is perceived to be ‘too slow’ at forty seconds per transaction.
Onto Q2 we go…