There’s an African proverb that goes “When two elephants fight, it’s the grass that dies.” The saying is applicable to wars, policy, labour, and a multitude of other scenarios. I hadn’t heard of it before this week when a twitter friend told me about it. He told it to me in the context of an article I posted on an upcoming battle between two software giants in Africa. And he said it might be the first case of “the grass” benefiting in this case. The story is about the looming competition between M-Pesa and Whatsapp for payment king in Africa. M-Pesa has long been the king of the jungle. Its dominance is documented in case studies across MBA curricula worldwide, and it now has plans to spread across Sub-Saharan Africa and the rest of the world. Meanwhile, Whatsapp is the messenger of choice for most of the emerging market world. Their approach has been to launch Whatsapp for businesses, which is seen as the first step for getting into payments. A key quote from the article is below.
“WhatsApp Business has been something of a Trojan horse for the platform’s commercial potential. “It’s already big, larger than we would have expected, with several million users,” he said, declining to reveal specific numbers. He described the total as “already very material” even when viewed in the context of Facebook’s 70 million global advertisers…In countries where WhatsApp has gained major market share, central banks and other financial regulators will naturally be concerned about its impact. In India, where WhatsApp has around 200 million users, it has been testing its payments product since February.”
So what happens when Africa’s homegrown payments hero goes up against one of the worlds most well-funded messengers? They won’t open up their platforms to each other, and walled gardens will form on both sides. Each business will try and attract users into these walled gardens, which become better by offering more services, at better costs. That should be good for businesses, in theory. What is certain though, is that consumers will benefit. The grass will grow strong in this scenario.