NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, July 17, 2014

Safaricom’s move last week to allow agents for its M-pesa mobile money service to work for rival operators is broadly being viewed as having the potential to further fuel the growth of such services.

The move means that agents can now run M-pesa services alongside those of rival operators such as Airtel Money and Orange from Telkom Kenya.

Safaricom was forced to open up its mobile money agent network to rival operators after the matter went to arbitration by the Competition Authority of Kenya (CAK). The CAK took up the case when Airtel Kenya filed a petition, accusing Safaricom of unfair competition.

Airtel Kenya’s official complaint came after years of infighting about the issue among the telecom rivals.

M-pesa is East Africa’s most popular mobile money service, with over 18 million users.

Amos Kalunga, telecom analyst from Computer Society of Zambia said in an interview that Kenya has become the second country, after Zimbabwe, to force mobile operators to open up their agent network to rival operators.

“We are now seeing African governments removing barriers that somehow affected the rapid growth of mobile money in the region. Zimbabwe was the first country to do so early this year,” Kalunga said.

It is not clear for the moment whether the M-pesa agent network will be opened up in all the countries in which M-pesa operates. M-pesa agents handle the cash end of mobile money transfers, receiving text messages with PIN codes from senders and handing over money to people meant to receive cash.