CNN Marketplace Africa features Safaricom, M-PESA and Kenya’s new person-to-person money transfer platform February 10th 18:15 EAT
This week, ‘CNN Marketplace Africa’ looks at how M-PESA has revolutionised mobile payments in Kenya, and how a possible new challenger from Kenya’s banks could allow simple and cheap person-to-person money transfers. CNNMoney Africa Correspondent Eleni Giokos also sits down with Safaricom CEO Bob Collymore as the show’s ‘Facetime’ interview.
Collymore tells CNN that Safaricom is introducing several new ways to use the M-PESA platform, including a debit card – he explains, “we’ve been trialing it, and it’s a tap and pay”.
This innovation is happening at an important time, as Habil Olaka, CEO of the Kenya Bankers Association tells Giokos that Kenya’s banks are developing the Kenya Interbank Switch, expected to launch later in 2017. Olaka says: “Given the economics of the product, I think you’ll find customers moving over and preferring to use our product. Even though we have not positioned it as trying to compete with existing players in the market.”
Collymore says that competition is a good thing: “The world is a disruptive world and we don’t stand by wanting to be disruptive. We stop by trying to find a solution for a problem. And if other people are finding solutions for problems, then that’s also cool.”
Financial analyst Aly-Khan Satchu gives his take on the challenge: “Are they going to be able to dislodge M-Pesa? I’m not so sure. It’s ubiquitous, it’s everywhere. But are they going to be able to take the wholesale banking back under their control? Yes, I think they will.”
Collymore explains how his predecessor advised him against taking the role.
“It was scary in the beginning because the price war had just started. Safaricom was at the peak and I remember Michael Joseph who was the former CEO said to me that, “I’m not sure if I were you, I would actually do this. I think it can only go one way from here”, which turned out to be not true.”
He explains how he combated falling prices in the market: “We took the decision at the time that the race to the bottom is not a great place to be involved in. We have a strong brand, so we leveraged the brand. We put the price back up and we explained to customers why we’re putting the price back up so they can continue to invest in the business. And continue to drive innovation, which Safaricom has been famous for under Michael Joseph.”
Asked by Giokos if M-PESA is too dominant, Collymore tells CNN: “The dominance in itself is not the problem. What would be the problem is if we abuse that dominance to kill the competition. So we’re very careful with everything we do. In our pricing, always bear in mind that position that we’re the leaders in the marketplace. We don’t want to drive the price forward and neither do we want to be credited in our pricings. So, we just make sure that we do the right thing. And let other people worry about the rest of it.”
On whether he will be Safaricom CEO in five years’ time, Collymore says: “I think in five years’ time, it will be led by someone else and what we really, really hope is that we continue the legacy, which was started by Michael. We have leaders who have the same passion and Michael had the same. He said to me, ‘you’d have the same passion’. We hope we’ll have a leader who has the same passion for making a transformative difference in the world. As we continue to build an institution in the company, so the leaders within the company are developing the passion that the two CEOs had.”