I am impressed by the work that went into the Mpesa Generation II platform iteration. While it has grown in complexity, it covers almost all the permutations that make for a more efficient business operation where the speed of cash flow is key to sustaining many enterprises. We have in the past explored how the banking sector has been caught napping, as Safaricom extended its focus from peer to peer money movement to business transactions. This has a number of benefits for small and medium sized businesses, both in relation to trade between themselves and trade with large enterprises, who have since time immemorial leveraged the earnings and trade volumes of their suppliers on punitive pay cycles.
The benefits of Mpesa Gen II are best realized when hinged onto valued added platforms such as Lipisha, KopoKopo, WezaTele and a handful of others, which via application programing interfaces – API’s, can marry data generated by the business and automate certain processes that have business owners avoid the backend admin complexity on the Mpesa Gen II dashboards.
We have already been doing this for years now with players such as Cellulant, PesaPal, JamboPay among others having built sizable business providing payment aggregator services to a growing number of customers, most notably utility companies. The Mpesa Gen II value that is realized is on the consumer side, where LipaNaMpesa online is poised for an overhaul that will see a departure from the use of the Bonga PIN to complete online transactions. The possibility of push payments opens up a new avenue of opportunities in differentiated M an E commerce user experiences. The result with be higher value baskets and lower cart abandonment rates, where most attrition happens at checkout.
With a growing number of businesses having adopted the Paybill and Buy Goods facilities, it is now possible to move payments directly from one Paybill number to another in real time. Think of a scenario where the enterprise resource planning platform or customer relationship management system raises a payment request to a customer with all parameters already embedded and it only takes a simple maker – checker process to have the payments approved and moved with all authorizations and KYC verified.
Access to capital
The only downside to the Mpesa Gen II ecosystem that would apply to businesses is access to additional business support services, core of which is access to loans. Any growing business will at some point in their lifetime require this facility, whether it is to fuel growth or service a purchase order. The standalone Mpesa ecosystem lacks this facility which means that even at scale, banks still maintain this hold on the business consumer, meaning that business owners will probably opt to eventually route cash flows back into the traditional banking pipes. There is currently only one partnership – with Kenya Commercial Bank that provides an associated benefit; a start but hardly enough.
Maybe if Mpesa were to be hived off and setup up as its own entity and thereafter take on a banking license would the service come full circle. Highly unlikely though, so we work with what we have.