Mobile money competition heats up in parts of Africa

Competition for mobile-phone based transactions in East and Southern Africa has gone a notch higher with the introduction of services by MobiKash Africa, an independent provider.

The independent m-commerce platform will be the first to challenge the notion that mobile transactions can only be offered by mobile-phone service providers. Currently, MTN offers the largest m-commerce services in 21 African countries, Vodafone operates in several markets through Vodacom and Safaricom.

The MobiKash m-commerce platform is seeking to increase the current level of financial inclusion of those who don't use banks or make little use of them, through a simplified registration process for opening mobile wallets, as well as rapid bank-account opening processes.

"Integrating financial institutions and other stakeholders into a single mobile commerce platform makes it a great deal easier for individuals, governments and businesses to manage finances," said Duncan Otieno, CEO of MobiKash Afrika.

MobiKash will offer the services through the Sybase 365 Mobiliser platform and is expected to demonstrated its efficiency and competitive edge over other networks in a pilot project in Kenya with a combination of banks, Micro Finance Institutions and bill issuers utilizing USSD (Unstructured Supplementary Service Data) as the mobile communication channel.

In parallel, the MobiKash business model is being established in various other COMESA (Common Market for Eastern and Southern Africa) territories where several project contracts have already been signed and deployment work has commenced.

"The MobiKash project represents a significant step forward in delivering the necessary integrated infrastructure required to ensure that the "unbanked" can now move toward seamless transactions via an exceptionally advanced m-commerce portal service," said Matthew Talbot, vice president, mCommerce, Sybase 365.

Sybase is already supporting other m-commerce platforms in Africa and is hoping to integrate the services once those become more common and providers find a way to interconnect. Currently, money can only be sent to a subscriber of the same network, for instance, a Zain subscriber cannot send money to a Safaricom user.

"With many similar projects already being deployed by Sybase 365, the African continent will eventually become an integrated single mCommerce ecosystem using a common architecture and product set," added Talbot.

MobiKash is hoping to move beyond the current person-to-person transactions to major enterprises, small, medium and micro enterprises (SMMEs), cooperatives, insurance, medical and pension plans, schools, disbursement channels, government agencies, and international remittance channels.

However, the company will have to address the thorny question of security and how subscribers can be assured that their money will not be siphoned from their accounts.

"Customers are exposed and service provide do not provide answers; it is important to have appropriate security for these kind of transactions, just like we have with other payment transactions," said Dorcas Muthoni a mobile-money user who said she lost money through the Mpesa service offered by Safaricom.

While MobiKash is promising a different experience, the extent of the network security and efficiency of its technical support team will be known next year, when the service becomes fully operational in the region.