The apparent M-Pesa monopoly may be set to crumble

Monday, June 30, 2014

Competition to the M-Pesa is heating up in Kenya, the world’s most advanced mobile payments market.

The world’s leading mobile payments provider, M-Pesa, is about to see competition reach a boiling point in its home market of Kenya for the first time since it was launched seven years ago.

Regulators there have licensed three mobile virtual network operators, or MVNOs—Finserve Africa, Mobile Pay, and Zioncell Kenya—to shake up the near-monopoly that critics say M-Pesa has enjoyed for far too long. The move threatens to knock parent company Safaricom, a Nairobi-based mobile network operator that is 40% controlled by the UK’s Vodafone Group, off its pedestal as the most profitable company in East Africa.

An MVNO is a wireless communications services provider that does not own the network over which it provides those services to customers. All three new MVNOs will have their mobile wallets hosted by Airtel, Kenya’s No. 2 wireless operator behind Safaricom.

Source: Fortune (link opens in a new window)

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