Category Archives: M-Pesa

E-commerce Moment: Which Way Up?

E-commerce is increasingly useful, and nice to have as a service, which we use every day, but is it profitable?  There were two e-commerce deal announcements in Nairobi today that happened almost simultaneously.

First up was Lipa Later, the “buy now pay later” fintech company confirming that it had acquired SkyGarden, a popular site for purchasing goods from abroad. SkyGarden had recently announced they were closing shop, as they were running out of cash – and this S.O.S. announcement appears to have worked as a last-minute rescue deal with  Lipa Later came just days after. Lipa Later has been signing up partners and SME’s enabling them to sell products like laptops, phones, and insurance to customers on credit. The two companies had worked together and with this familiarity, the deal for a 100% takeover is complete and SkyGarden, with its staff already absorbed, will remain, and run independently. SkyGarden had invested $6 million to run in Kenya but seems to have faced challenges with the logistics of e-commerce. Lipa Later will maintain the “same day” delivery attraction of SkyGarden whose customers will now be able to pay using Lipa Later instalments in Kenya and later in Rwanda, Uganda and Nigeria.

Then there was the launch of Kapu Africa, from former executives of Jumia and other technology leaders.

Kapu Africa is focused on bringing down the cost of weekly groceries by sourcing from farms and food manufacturers for free next-day delivery to a Kapu agent collection centre such as hair salons or other homes near the buyer’s house. Orders are to be placed on WhatsApp by 9 PM  with even lower prices for group purchases. Kapu says it has 1,500 centers in areas like Eastlands, South B, Kawangware and Kasarani and plans to be all across Nairobi by March 2023. 

Other recent developments: 

Safaricom for juniors: E-commerce buyers tend to be over-18 as payments require that a card and M-Pesa (mobile money) be used, but Safaricom has gone beyond that hurdle in launching M-Pesa Go, to tap kids between the age of 10-17, who have access to mobile phones, and enable them to buy from stores and pay for things like taxi rides and online meals, with supervision from their parents.

Contactless SME payments: Fast, easy payments, preferably without any physical contact or exchange, are a holy grail in e-commerce especially for fast-paced urban lives and for in-person shopping during Covid-19. Now Pesapal, which has quietly locked up key territories and partnerships in the SME payments space in Kenya enabling them to easily accept all forms of e-commerce payment from customers, whether card or mobile money, has launched a new tap service.  

Food distribution: Logistics is a big part of e-commerce and last week Twiga Foods, one of the best-funded organizations in the space, had Kenya’s President William Ruto launch a logistics hub at Tatu City in Ruiru, near Nairobi. The company has a Twiga Soko Yetu platform and 200,000 square-foot automated warehouse and distribution centre that can handle 8 million kilos a day of fresh produce, food and retail commodities for Twiga to distribute to its 140,000 customers across Kenya and Uganda.  

edit Now Jumia has closed its offices in Dubai and shifted its senior staff to work in Côte d’Ivoire, Kenya and Morocco, in a cost-cutting move. Via Tech Trends KE.

Previous insights on e-commerce in Kenya from Jumia and Chap Chap Go.  

Safaricom launches M-Pesa super-App

Safaricom has formally re-launched the next phase of the M-Pesa app as a rich financial management tool that does not depend on a single network or data to operate.

The M-Pesa service, which now has 30 million users, has been redesigned to allow biometric (face/fingerprint) authorization of transactions as an option to entering a PIN. Users can also load up different transactions, amounts and recipients and approve them all as a single bulk payment. It also allows emojis and images of counter-parties and there is also a “request money” feature.

During Covid-19, Safaricom saw an initial dip in the numbers of business using M-pesa, formally and informally, but a new business app, coupled with online applications for the business till numbers, saw them double the number of business customers from the beginning of the pandemic. Some key new features are that users will be able to add “reasons/notes” to payments, generate visualizations of transactions with individuals and download statements, which are all important to cash flow and fund management.

The app can work in offline mode, does not use data, Also M-Pesa has taken the WeChat route with mini-apps as Safaricom seeks to establish a play store for Kenya. It has fourty mini-apps are in development and seven are now live. One is the Kenya Railways Madaraka Express train service between Nairobi and Mombasa, and booking a ticket on the app gives back 10% to the buyer’s wallet. New users also get 500 MB for each download from the Android or Apple stores.

In the future, there are plans to have the M-Pesa app be accessible for lifestyle and business purposes in any African country. Users will also be able to store their credit card details to fund their wallet, enabling remittance and payment transactions.

Safaricom’s Pochi

During Safaricom’s 20th anniversary celebrations last week, the company announced the launch of a new M-Pesa business product called launched “Pochi la Biashara” as part of a commitment to support micro, small and medium enterprises (MSMEs).

This comes shortly after they rolled out a new app for business payments (Lipa Na Mpesa app) and which had racked up 240,000 enterprises in a few months. What’s different about the new business pouch (Pochi) product? It’s targeted at informal business people, such as some food vendors, kiosk owners, and boda boda (motorcycle) operators who are not formally registered as businesses.

  • No loss of Fuliza repayment: Sometimes  people with Fuliza loans (a useful instant temporary overdraft on their phones that are replenished by the next infusion of cash) can sometimes find the service an inconvenience, as they may have an urgent or immediate use for an incoming payment – so to get around this, they ask for the money to be sent to a different phone number. Pochi eliminates this need to juggle two phone lines, as business payments do not go to replenish Fuliza – and borrowers can later repay these at a more convenient time.
  • Anonymity: For customers wary about their telephone numbers being misused when they pay via M-Pesa, a phone number is not visible when they make a payment to Pochi. This has become a pet peeve as they sometimes have their numbers harvested and they later get advertising messages or even face personal harassment. To pay to Pochi, they dial *334#.
  • Simple sign up for business owners. There’s no paperwork and they do not incur charges as they receive payments. 
  • No reversals of payments without the business owner’s permission.

So one can now buy from a roadside hawker or at a highway market on the way to Nakuru without worrying that their M-Pesa details (name and phone number) will be used to pester them

Likewise, the vendor has no worry that someone who buys food or curios from them will try and reverse the payment as soon as they drive off.

Safaricom CEO Peter Ndegwa also said the company is going through a competitive process to enter Ethiopia as they plan to make M-Pesa, which now processes 21 million transactions a day, the financial service platform for Africa.

M-Pesa App eases cash management and reporting for SMEs

In June 2020, Safaricom launched a new app for business owners that is a serious tool that enables them to do true real-time cash management, accounting and business banking on their mobile phones.  

Perfectly timed during the Coronavirus when businesses are moving shopping online, and paying more with M-Pesa over cash, the new Lipa Na M-PESA Business App allows business people to set up and manage multiple tills at different locations, keep track of cash and integrate payments from different tills.

By using the app, business owners get immediate updates on sales and receipts, giving them visibility of how different stores are performing and should reduce pilferage and leakage from cash sales handled by employees at different locations.

Payments collected through mobile money can be used to settle supplier bills, pay daily casual salaries or be sent to the bank, all using the app. A big plus is that businesses can obtain instants overdrafts to complete crucial payments, and this follows in the runaway success of “Fuliza”.

Crucially the Lipa Na M-PESA Business App creates a digital data trail, marries accounting and banking as they can now export their periodic statements to other systems like Excel or an accounting system for easier and faster reconciliation. This is expected to ease the record-keeping and payment efficiency of business owners, 170,000 of who currently use Lipa Na Mpesa and who can receive payment from 24 million M-PESA users across the country. 

Business owners can apply online for the new M-PESA business till numbers or to add to their existing ones. The requirements asked for from different entities, from sole proprietors to partnerships, companies and churches, are listed on the site. Decisions on applications will be made within 24 hours of providing all documentation, with new till numbers provided to successful applicants. Other status decisions such as pending, or rejected, with reasons given, will also be in the same period.

The Lipa Na M-PESA Business App is now available in the Google Android store and on USSD (*234#), while the iOS version will be out later.

Safaricom 2020 results with CEO transition

Safaricom PLC announced its financial results at a unique event, streamed online, that featured its incoming and outgoing CEO’s.

Overall revenue grew 5% to Kshs 251 billion as M-Pesa revenue grew 12% to Kshs 84 billion with mobile data growing 12% to Kshs 40 billion. Voice and SMS revenue declined. Profit before tax increased to Kshs 105.77 billion up 17% from the previous year, and the company will pay out Kshs 56 billion as dividends to shareholders, up from 50 billion in 2019.

The firm’s Chairman Nicholas Ng’angá welcomed the new CEO Peter Ndegwa who has been in office for a few weeks now and thanked Michael Joseph who had been appointed interim CEO following the demise of Bob Collymore in July 2019.

Ng’angá asked that the country’s regulatory period, after Coronavirus, be designed to support the revival of businesses, not one that increases taxes for consumers and businesses, noting that the company had paid Kshs 111 billion in taxes and fees to the government during 2019.

Michael Joseph said that in his second stint as CEO they had simplified offers to customers and mobile data had double-digit growth while gaining market and increasing data revenue. Safaricom and Vodacom have acquired the M-Pesa brand from Vodafone and will roll out M-Pesa across Africa with new products and lower costs. Safaricom is also pursuing one of the new licenses in Ethiopia.

Sateesh Kamath, the Chief Financial Officer, said the results were adjusted for the one off-gain of acquiring M-Pesa and that service revenue still grew in the year, despite the decline of the sports betting and the reduction of tariffs the company had undertaken to support consumers during Coronavirus. He said that they plan to introduce more use cases to cannibalise M-Pesa “withdrawal” revenue and instead grow customer e-balances in the long run, while Joseph said that they plan to roll out a unit-trust investment product.

Peter Ndegwa, the incoming CEO, announced that the company would roll out a device financing offer to enable Kenyans to access 4G smartphones, with affordable data, by paying as little as Kshs 20 per day. He concluded by saying that Coronavirus made it impossible for the company to provide forward guidance on earnings and capital expenditure for 2021 and that they would do that at a later date.