Category Archives: kenya communications

Simplifying M-Pesa Payments with 1Tap

As they announced their 2017 financial results today, Safaricom also unveiled 1Tap – the next step of innovation to drive increased financial inclusion in Keyna.

M-Pesa is ten years old and CEO Bob Collymore said that Safaricom was launching “Mpesa 1 tap”  which would reduce the number of steps to complete an M-Pesa transaction, currently about 8 steps on SMS and USSD, to just 1 step.

At the result announcement, the Safaricom CFO Sateesh Kamath said that while 75% of M-Pesa revenue was from traditional person to person transfers, 25% was new from new business like “Lipa na Mpesa” (pay with M-pesa) payments.

Buy Goods is free for customers, except at petrol stations which levy an additional charge, and just over a month ago, Safaricom announced a 50% tariff reduction for all Lipa Na M-PESA Buy Goods merchant fees – to 0.5% of the transaction amount. These were also was capped to Kshs 200 for any payments over Kshs 40,000 (~$400) while payments to merchants below Kshs 200 were made free. Lipa Na M-pesa is used by over 50,000 merchants and Safaricom plans to enable more kiosks, boda-bodas, newspaper vendors and other merchants who are in the informal sector where 80% of Kenyan work to receive such vital business payments at no cost.

Merchants can also get instant payments into their bank accounts at any of 23 partner banks (of the 40 banks in Kenya) from a Lipa Na M-pesa menu in their phones in just a few seconds – and this is useful as many of the merchants don’t have time to go to the bank to deposit cash.

With 1 Tap, all a customer needs to do is tap their cards on the mobile POS machines and then enter their secret M-Pesa PIN to confirm the transaction. Pilot testing for Mpesa 1 Tap has been ongoing in Nakuru where the service now has 13,000 customers and 900 merchants. Kenyans briefly got to see what NFC could work with the Beba Pay service a few years ago, with payments in public service vehicles.

Rediscovering Telkom Kenya

Monday’s nationwide outage of telephone, internet data, and mobile money services showed the practical need for people and companies to have viable alternatives for their daily connectivity. One of the oldest companies in this space is Telkom Kenya.

While it has been in the news more for its foray into mobile phone business under the Orange brand, other parts of the company have continued to chug along providing affordable and reliable services to customers, governments, and institutions  all across the country

Telkom Enterprise has three key connectivity products:  JamboNet for large businesses, E@synet Broadband for SME’s, and Flybox for homes and small businesses. Telkom has continued to invest and grow its infrastructure as well as through partnerships in submarine cables to extend broadband connectivity. The Telkom Kenya Entreprise division is now led Kris Senanu, long-associated  with Access Kenya and the history of internet service businesses in Kenya. Telkom manages the National Optic Fibre Backbone (NOFBI) for the Kenya Government and was recently contracted to roll out free Wi-Fi to over one thousand,  government-funded, incubation hubs in 290 constituencies around the country.

Telkom is 60% owned by Helios, an Africa-focused investment firm, and the Kenya government owns the other 40%. Other investments by Helios in Kenya include Africa Oil, Vivo Energy, and the Wananchi Group. It is also invested in Interswitch which supports financial connectivity services at a dozen Kenya banks and 1,000 ATM’s.

Kenya’s Money in the Past: Digital Kenya

Digital Kenya, by Bitange Ndemo and Tim Weiss, charts the rapid emergence of Kenya in the world of technology. Through stories and interviews with people in the sector, you learn about risk-taking and making policy from humble beginnings back in the mid-1990’s when the whole country shared 32 kbps, and the then telecom Kenya Posts & Telecommunications (KPTC) monopoly declared internet services as being illegal. At the time, KPTC was connecting about 10,000 users to the phone network, and with 77,000 potential customers waiting, they envisioned a 5% tele-density in Kenya by the year 2015. The tele-density in 2015 turned out to be 88% thanks to rapid changes that came after fibre cables and the cheaper mobile phones emerged.

One story is a narration of how, as a peace agreement was being signed in February 2008 to end the post-election violence in Kenya, the ICT Ministry managed to secure a guarantee to enable the laying of the TEAMS fibre cable that ultimately changed the face of ICT in Kenya. This came after the ministry had stepped back from another long-discussed  bureaucratic cable project – one called EASSY. This was one of the examples of government officials circumventing red tape for a good outcome. Another was the roll out of M-Pesa which is also cited here, ahead of regulations and thanks to some  individuals in government giving it their cautious blessing. Not all of them turned out well, and one case cited is of officials at the Postal Corporation sabotaging a land deal that would have led to the establishment in Nairobi of the headquarters of a multinational telecommunications organization.

There are many other stories that show issues of privatization, race, the lack of vision & finance, tech startups, the need for skills to scale, and the disconnect between local capital & the tech sector. It also shows the disconnect of ICT with both formal banking and also with the agricultural sector, two crucial links yet to be adequately bridged in Kenya.

Thanks to the Ford Foundation, the books is available free of charge and a free book download can be obtained.

E-Government Moment: Part II

Stuff happening on the e-government sidelines
  • July 1 is the deadline for Matatu’s and other Public Service Vehicles (PSV’s) to switch to cashless payments of accepting fares, in lieu of hard currency. PSV’s are meant to have signed on to services like Google & Equity’s – BebaPay or be in breach of the law.  It’s not expected to be smooth sailing considering the slow uptake of cashless systems among smaller matatus within  Nairobi, and it’s possible that after taxes, the minimum fare will be more than Kshs 30.
  • June 30, (today) is also the deadline for Kenyans to file their tax returns. This had been a largely academic exercise of submitting paper forms that the revenue authority (KRA) was unlikely to ever go through, and had even been discarded. But in rejecting a bill, parliament re-opened this tiresome exercise. This year, KRA has advertised its website, as the only way for Kenyans to file their taxes – but the site and service still has many challenges, including inaccessibility. 

  • While the schools laptop project seems to have stalled at the procurement stage, some $200 million has been allocated in the 2014/15 budget to procure some laptops. More visible in terms of making the government digital, has been the procurement by by county governments and parliament of iPad’s and other devices for leaders to use.
  • In the banking sector, June was a turning point for the migration to debit and credit cards to Chip-and-PIN enabled cards. While the benefits to consumers appear negligible (less fraud identity than swipe cards) and there is a cost of about $1.80 to 3.20, there has now been a liability shift, and going forward, costs associated with fraud involving non-EMV compliant cards will be borne by the issuing bank (currently they are borne by the acquirer/merchant).
  • In terms of digital television, there’s one year left for the analogue to digital migration in Africa. However, most countries are unlikely to make this deadline. Read more.
EDIT
  • The Kenya Government has automated registration of companies by launching a one-day registration of companies system to improve efficiency at the state law office.

Nairobi New Media Stocks, 5 Years Later

It’s been over five years, since a wave of new media stocks appeared at the Nairobi Stock Exchange  (NSE) including Access Kenya Safaricom, and Scangroup. They are all in the news this month, but for different reasons.
For Access Kenya, the deadline for shareholders to vote on a takeover by Dimension Data was extended by a day due to a national Holiday last week, However, Dimension Data just announced that they have received acceptances from 75% of shareholders and approval the Competition Authority of Kenya and will now proceed with the takeover which will leading to a de-listing of Access Kenya at the NSE.
Safaricom shares seem to have stabilized in the Kshs 7-8 price range  after spending quite a bit of time at Kshs 3/=, well blow the IPO price of Kshs 5/= in 2008. This disillusioned a lot of retail shareholders who bought their shares hoping to quadruple them when they listed, but then had to sell them at a loss. The company has since weathered many changes, but remains the market leader in Kenya, thanks largely to M-Pesa and the floundering of their rivals (Orange, Airtel and Essar). 
Scangroup got an investment from the WPP, in 2008 who gained a controlling interest for about $18 million. The shares traded at about Kshs 72, and while they have lagged other shares this year, this is still a tremendous gain from the IPO price from Kshs 10.45. 
This week, WPP announced, that they would seek to increase their stake to just over 50% in a deal worth about $95 million. This will be done through a combination of cash, new shares and exchange of partnerships in joint companies (Ogilvy & Mather, Ogilvy Africa, Ogilvy (in Kenya, Tanzania, Mauritius) Millard Brown (East Africa, and Mauritius), and Hill & Knowlton (East Africa and Africa) which will become full subsidiaries of Scangroup over the next one year.