NFC is the future of African mobile money

Mobile money has made more of an impact in Africa than a number of other emerging market regions. In fact, through services like Safricom’s M-Pesa, people on the continent have been using their mobile phones for financial transactions since long before Google brought out its wallet. But can emerging markets on the continent, and elsewhere, take mobile money beyond money transfers?

This is, after all, how the whole mobile money market emerged with M-Pesa: People buying airtime from agents and using the airtime to pay for bills or send money other people across the country.

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A number of mobile money platforms, such as Mozambique’s MKesh, started out trying to adapt the Safaricom model to their local environments. Few though have managed to match M-Pesa’s Kenyan success.

Others, like Splash Mobile from Sierra Leone — a network neutral money wallet, have chosen to forge their own path.

The mobile wallet is attempted to make its mark by working around the fact that Sierra Leone’s regular banking industry has been ravaged by years of civil war.

While still focussed on money transfers, Splash has taken mobile transfers beyond the individual payment level and into the business-to-business (B2B) payment realm.

According to Orange Telecom CEO Mickael Gossein, however, “the future is mobile payment not money transfer”.

By that, he means mobile money needs to move away from merely being a convenient way to transfer funds towards being a complete payments solution.

Orange has already made steps towards this in markets like Kenya by partnering with Equity Bank to launch Iko Pesa.

Each user automatically gets a bank account with their Orange mobile-money subscription. What this means is that they can withdraw cash from ATMs using the money transferred into their mobile accounts.

It should be noted that South African operator, Vodacom took a similar approach with that country’s iteration of M-Pesa. The results have been somewhat lower than anticipated.

According to Ghossein, this is just the start for mobile money on the continent.

“We need to think how to use it to buy groceries, pay for hotels et cetera”, he says, “Mobile money needs to become the new Mastercard”.

Airtel, a competitor to both Orange and Safaricom in Kenya, has already gone some way towards achieving such a vision with the launch of a virtual credit card.

Like Ghossein, Safaricom’s Betty Mwangi Thou believes that Near Field Communication is the best way of achieving a wholly integrated mobile wallet.

“NFC is the future,” says the former.

Thou, meanwhile, thinks that NFC has immense potential outside the private sector.

“There are opportunities in the agriculture sector and the health sector,” he says.

Patrick Leroux of the South African Nearfield Initiative, a non-profit association “established to accelerate the mass market deployment and adoption of Near Field Communication (NFC),” says there are signs that emerging markets around the world, and particularly in Africa, are readying themselves for NFC.

Major South African banking group ABSA, for instance, recently announced that it would be making a push for NFC.

“We can see banks and retailers moving towards contactless,” he says, emphasising that the increasingly rapid entry of NFC-enabled smartphones into the African market means that the platform will have little trouble gaining traction on the continent,

Thou seems to agree with this sentiment, and adds that Safaricom is readying itself for the mass rollout of NFC.

Ghossein is particularly enthusiastic, predicting that “in one or two years NFC will be here and it will replace all the money payments”.

Image: Visa

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