Safaricom rivals call for mobile money clearinghouse

Rivals of Kenya's biggest mobile operator Safaricom want the Central Bank of Kenya to establish a seamless money transfer platform, in order to limit M-Pesa's dominance on the market. In a proposal tabled before the Prime Minister and seen by the Business Daily, Safaricom's rivals argue that such a platform would remove the high cost barrier that is preventing consumers from moving money across networks. Though it is possible to send money across the networks, the transfer process remains complex and costs 10 times more than the price of sending money within a network. Currently, recipients of money from other networks receive a text message indicating that money has been sent to them and have to go with the message to an agent of the operator whose platform was used to withdraw the money. Under the proposed structure, the CBK would establish a form of clearing house that processes all transactions from the four mobile money platforms M-Pesa, Airtel's Zap, Yucash or Orange money, and send it directly to the recipient's phone. That should help remove the high charges. Consumers sending KES 25,000 from M-Pesa to rival networks such as Airtel must for instance part with KES 400 in transaction fees while the cost of sending and receiving a similar amount of cash from Airtel to rival networks is KES 200. Some of the service providers say the establishment of a central clearing house will offer them headroom to significantly cut costs as they have recently done in the voice calls market.