This archive report was first published on 24 June 2020.
June 24, 2020 - Safaricom's M-Pesa has been the undisputed king of mobile payments in Kenya and beyond. But with the recent introduction of WhatsApp Pay in India and Brazil, many are wondering if this new service will finally provide the competition M-Pesa has been lacking.
According to the latest Communication Authority statistics, M-Pesa subscribers exchanged over Sh686 billion between them over the last three months, with merchants and their banks exchanging Sh860 billion during the same period.
However, WhatsApp Pay's entry into the Kenyan market may not be as straightforward as it seems. The service requires a smartphone and internet connectivity, which excludes millions of M-Pesa subscribers who do not have access to these basic necessities.
Furthermore, WhatsApp Pay's back-end design requirements, which include credit card or debit card integration, may also limit its appeal to Kenyans who do not have bank accounts. According to Central Bank records, less than 30 per cent of Kenyans hold a traditional bank account.
While WhatsApp Pay may provide some competition in the diaspora money remittance market, where Kenyans abroad can use it to send money home, M-Pesa already has the same option for a wide selection of countries abroad.
It seems that the only thing that could provide good competition to M-Pesa is a totally different service from Safaricom itself. The company's Bonga Point ecosystem, which has been expanded to include retailers and other merchants, may be a foundation for something bigger going forward.
Only a blockchain-based financial service, with its futuristic promises, can potentially disrupt M-Pesa's dominance. It looks like it is only Safaricom that is trying to disrupt its own flagship product M-Pesa.
