Several online payment providers from East Africa attending Afrikoin discussed another hurdle/opportunity in the mobile money field. If customers seem to enjoy MPesa as way to send and receive money, merchants need another approach to be educated and convinced to join the mobile money movement.

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Customer considerations when adopting mobile money

Another great panel at Afrikoin gathered entrepreneurs from the industry:

  • Agosta Liko from PesaPal, a payment gateway with main clients in the education industry
  • Steve Ogola from iPay Africa, an agregator of payment services focusing on the retail industry,
  • Ben Lyon from Kopo Kopo, which provides a business intelligence tool for offline payment, mainly in restaurants and F&B
  • Eran Feinstein from 3G DirectPay, a veteran in the African online payment industry with a focus on the travel industry

A first step to understanding this topic is to know what merchants value the most. All panelist agreed that the speed of settlement is key, as many small businesses can’t afford to deal with disruptions to their cashflow and timelines without jeopardizing their project.

For larger corporations, integration of the e-commerce solution to the existing back-end or comfort of use for the end user (in the airlines) can be additional criteria when choosing a vendor for their payment solutions. Adding value to the experience is a way to increase conversions at the end of the day.

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Kopo Kopo adds business intelligence to the payment for restaurants owners

Surprising and valuable findings from mobile money entrepreneurs

Startups also need to keep testing and trying new methods and accept surprises in their developmental process. Our panelists shared personal experiences that struck them the most.

  • Agosta Liko discovered that “Africans don’t donate” and that the NGO industry isn’t a good market to be in.
  • Steve Ogola from iPay Africa tried to set up a mp3 store but “it just didn’t happen”.
  • Eran Feinstein was surprised that luxury hotels owned by Westerners and targeting Westerners found credit cards “unreliable and unsafe”, even though it’s their most common payment method.
  • Eventually, Danson Muchemi from JamboPay confessed that 50% of the transaction made on his payment solution were from diasporan Kenyans.

2 Key Takeaways about Mobile Money in East Africa

  • Firstly, the market in East Africa is huge. Even with 5 competitors gathered in the same panel, everyone had its niche. Most of the big businesses are not digitalised yet and even with some overlap, there are still huge gaps to fill.
  • Secondly, the question of the format of payment is not a good question to ask. Whether credit cards or Mpesa or Bitcoins “win” the mobile money race concerns only starters. Customers are concerned with only one thing: paying as fast as possible, whatever the infrastructure. From this perspective, NFCs are mere gadgets. You can’t pay on Skype with MPesa, and there’s no link between MPesa and VISA. Customers don’t care about the backend negotiations, they want to pay, period.

There’s obviously a huge gap in the industry. The next mobile money innovator who thinks with his own standard and bias, focuses on the consumer experience and who doesn’t care about these internecine fights can capitalise. There’s still much room for the next big innovator.

Martin Pasquier