Safaricom

The Mobile Money Revaluation

M-Pesa“If the Cash is King, then the King is

Dead”

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ByWasim Khalil

Safaricom Safaricom is a leading telecommunication operator in

Kenya,

which is 40 percent owned by Britain's Vodafone , started as a department of Kenya Posts & Telecommunications Corporation, the former monopoly operator, was launched in 1993 and

become market leader in Kenya by provide the lowest charge for nationwide in world,

Safaricom also pioneered commercial mobile money transfer globally through M-PESA,

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Mobile Payment It is also referred to as mobile Money, Mobile

Wallet, Mobile Money Transfer.

Mobile payment is defined as “paying for goods or services with a mobile device such as a phone, personal digital assistant (PDA), or other such devices.

Allow to deposit and withdraw money , transfer money to other users and non-users, settle bills and pay for all sort of services as well as digital or hard goods.

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M-Pesa M-Pesa (M for Mobile, Pesa is Swahili for money) is a mobile-phone based money transfer

and micro financing service. launched in 2007 by

 Vodafone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania.

It has since expanded to Afghanistan, South Africa, India and in 2014 to Eastern Europe.

M-Pesa allows users with a national ID card or passport to deposit, withdraw, and transfer money easily with a mobile device.

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M-Pesa The service allows users to deposit money into an

account stored on their cell phones, to send balances using PIN-secured SMS text messages to other users, including sellers of goods and services, and to redeem deposits for regular money.

Users are charged a small fee for sending and withdrawing money using the service.

M-Pesa is a branchless banking service; M-Pesa customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking agents

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Market Trends 2011 Mobile payment users hit 160 Million users. Mobile payment Transactions value : $106 billions. 2013 Mobile payment users hit 245 Million users. Mobile payment Transactions value : $235 billions. 2017 Mobile payment users hit 450 Million users. Mobile payment Transactions value : $725 billions.

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Market Trends The Growing ease with which it enables people to

collect payments from customers, buy goods, pay for services and send money to family and friends.

Facilitating for unbanked people to access to many services and interact with many financial services and performing money transactions.

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Industry Structure Mobile Payment Move faster in developing

country because :

Mobile Money can operate outside the structure of formal financial sector.

Mobile Money is powerful substitute for conventional alternatives.

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Looking Forward More than 100 mobile-money deployment in

emerging market start operating.

M-Pesa, M-Paisa, FNB, GCASH, SMART Money.

More than half the word adults do not use financial services.

More than billion people in emerging and developing markets have cellphones but not a formal bank account.

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Questions Q 12-3 Question 12-3 Dynamism creates opportunity as well constraints. Identify

the most promising opportunities as well as constraints for mobile money service providers in developed markets then do the same for firms in developing markets, how they are similar? How do they differ?

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Questions Q 12-3 Answer 12-3 Opportunities in Developed MarketStrong physical infrastructure, Sophistication of buyers and

sellers of financial services, Effectiveness of regularity for those reasons the Mobile industry could find good environment for growing

Constraints in Developed MarketsExtensive Access, Diverse options, High Sophistication, far-

reaching regulations could slow down the growing of mobile payment industry additionally to the fact that vast majority of people in developed countries have little need for mobile money.

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Questions Q 12-3 Answer 12-3 Opportunities in Developed Market Mobile money can operate outside the structure of the

formal financial sector additionally to that Mobile money is a powerful substitute for conventional alternative.

Constraints in Developed MarketsPotential criminality call for vigilant, it could be used for

cleaning money

Questions Q 12-4 Looking out over the next decade, forecast the likely

standards of value creation in the mobile money industry. How would you advice a company like Deutshe bank or Visa to configure and coordinate its value chain to prosper in this environment? Would you advise the same to companies like IBM, Google, or Safaricom?

Deutshe bank or Visa(Finance company) must focus on unbanked people and align there Strategy to serve this category of customers.

Technology and Communication Company have a good opportunity to invest in Mobile money.

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Questions Q 12-5 What sort of executive perspective do you see as critical to

identify and understand the opportunity of mobile money in emerging markets? Will the same set apply to executives working in established countries?

It is good opportunity in Mobile Money because a billion people in emerging Market have a cellphone but not a formal account.

For the established countries most of people have a formal bank account so the opportunities is less than Emerging market.

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Questions Q 12-6 In the long run, do you anticipate a few global players

applying an integrated strategy across multi markets or many national companies emphasizing local adaptation to create more values in the mobile money industry? Identify technology trends, business practices, and regulatory conditions that support your choice.

International consortiums are establishing to support mobile Money for example Apple, VISA and MasterCard they provide new services to support payment by Mobile across multi market, and will apply the conditions applied for visa and MasterCard the technology could use to support national market and will support bank and un-bank organization.

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