Mobile money competition rises with the introduction of Visa payment service

Kenya is one of the most attractive markets for mobile money because of the success of Mpesa, launched by Safaricom, which is 40 per cent owned by Vodafone, nine years ago.

                                     Photo: Credits

Visa, the world’s largest payment company, has taken the competition for mobile money service a notch higher with the launch of mVisa that enables Kenyans use mobile phones to transact cash and make payments.

The payment service platform has partnered with four banks in Kenya to launch a mobile phone payments platform that will mount the first credible challenge to the country’s dominant Mpesa system. The rollout of the service will enable Kenyans make free domestic mobile money transfers using mVisa.

The daily limit for person to person transfers is set to be Sh250,000 with the per transaction limit being Sh100,000. This is in comparison with mobile money services whose daily transaction limit is Sh140,000 while per transaction limit is Sh70,000. Unlike Mpesa, customers will not be charged to convert money received to cash since they can withdraw it from an ATM.

The growth of mobile money services in many countries in the region has been helped by African governments, which have crafted favorable regulatory policies. This has resulted in stiff competition between banks and mobile phone companies. The rise in the use of mobile money has further been fueled by the increasing availability and use of mobile phones as operators compete to capture customers even in rural areas, to increase their customer base.

The new Visa service will be competing with M-Pesa, Airtel Money, Equity Bank’s Equitel and the recently launched Pesalink owned by Payment Services Ltd, an affiliate of the Kenya Bankers Association.

Mpesa users, in contrast, only need a mobile phone. Mobile phone penetration in Kenya is almost 90 per cent, while the number of people with bank accounts is less than half that.

Leave a Reply

%d bloggers like this: