The chink in the mobile payments chain

Life is mobile and with life comes living, which requires one to part with cash or some other form of value in exchange for what they want. With the introduction of mobile money in many African markets and the success that is Mpesa, focus is shifting to mobile payments.

While some may argue that it is the technology that is holding back adoption of mobile payments on a mass scale, I believe it is the lack of reasonable business models that ensure all players in the value chain are adequately compensated. The tug of war that played out for us after the rollout of Mpesa, goes to show that while mobile payments is a lucrative market, cross industry synergies must be forged to ensure seamless service delivery and most importantly stability of the payment ecosystem.

The mobile payments arena is attracting many startups seeking to become the defacto connector in what could soon become a billion shilling industry as demand for payment convenience and online purchasing rises in the region. Some of the payment services currently in the market include; PesaPal, Commerce 360, Moca, JamboPay and Ipay. All of these services build on top of popular mobile money services Mpesa, Zap and Yu cash with extensions that support credit card payment to target the growing number of consumers who carry plastic.

An analysis of the current services looking to grow mindshare reveals that the ultimate business model for mobile payments at least on a local level is yet to be discovered. And perhaps that model doesn’t exist.

The concept of mobile commerce and e-commerce lends itself to different types of inventory being available for purchase. Notwithstanding different users want to be engaged in different ways and they want different things. The experience and billing for a virtual good purchased on a social network cannot be the same as that of an online store selling dresses.
The key lies in creating business models that suit the different consumer experiences. Models that adapt to the preferred method of payment as well as type of good or service being purchased. One underlying issue that must also be tackled head on is the revenue structures. Currently mobile money, which is the backbone of current mobile payment solutions, is the domain of mobile network operators and the tariffs for these services were not developed with m-commerce in mind.

The mobile network operators would do well for the market and themselves, if they crafted a proposition to add value to the mobile payments ecosystem.
This move in my opinion is as simple as adopting a different set of tariffs for mobile payments and setting standards for interoperability that will drive innovation by the upstarts seeking to deliver last mile payment solutions. This will lead to an increase in the volume of M and E commerce with all players being adequately compensated for their value addition.

An Africa based entrepreneur in the pursuit of opportunities without regard to resources currently controlled striving to build services that have real-world value for my beloved continent and beyond while having fun along the way.

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