Kenya is inching closer to becoming a cashless society as software companies drive the shift into mobile payment platforms in daily financial transactions.
Consumers are spoilt for choice as various tech companies roll out new mobile payment and money transfer solutions.
The most recent product in the market is Elma, launched last week by software company Craft Silicon. Elma is a mobile commerce solution which seeks to offer users a personalised service that cuts across all platforms.
â€œWe realised that most of the financial services that are in the market particularly those provided by mobile telecommunication providers mostly focus on sending money whether it is locally or internationally,â€ states Craft Silicon CEO Kamal Budhabhatti.
â€œWith Elma we are making mobile commerce part of consumersâ€™ lifestyles by enabling users customise transactions according to their needs and choices.â€
The mobile commerce platform is available to users either as a free-to-download application that can be used on virtually all smartphones or USSD version for mobile phones with basic features.
â€œWhat we are offering consumers is interoperability where users of Elma are free to transact across mobile networks and different commercial banks,â€ says Mr Budhabhatti. â€œOne can easily pay bills, buy airtime or transfer money from one bank account to another in quick steps on their mobile phone.â€
With their new offering, Craft Silicon joins the league of service providers and software developers banking on more Kenyans embracing mobile wallets in their transactions.
Others include Tangaza money transfer service, which enables consumers pay bills, disburse salaries, and manage microfinance systems across all networks and Mobikash that allows users synchronise their bank transactions on their mobile phones and manage their accounts in real time.
Other providers like KopoKopo act as intermediaries between mobile money service providers like Safaricom enabling SMEs accept payments for goods and services through M-Pesa.
The field of third party intermediary in mobile money is set to get even more crowded beginning next month, with the launch of Mimi, a mobile commerce solution that targets the diaspora market worldwide.
However, the drive to take mobile commerce in Kenya to critical mass and make in the first country in Africa to become a fully cashless society is harder than most developers would like to admit, and several challenges still lie in the way.
With M-Pesa, Kenya has firmly stamped its authority as a mobile money transfer juggernaut not only in Africa but globally.
The mobile payment solution earlier this year lifted Kenyaâ€™s ranking in MasterCardâ€™s Mobile Payments Readiness Index to the fourth place worldwide.
Compared to countries like China, India and South Africa, Kenya was also ranked as having the worldâ€™s highest rate of person to person payments at 89 per cent and a reported usage level of 70 per cent.
These figures, however, largely depended on M-Pesa, the money transfer service operated by Safaricom.
In order to have mobile commerce reach critical mass, Kenya needs to have more of its citizens adopt the use of mobile transactions on a daily basis irrespective of mobile network or financial provider.
According to a recent World Bank report, Maximising Mobile, one of the ways of boosting mobile commerce is to reduce market domination through interoperability.
The report states that while dominant mobile money operators are reluctant to allow formal interoperability for fear of eroding significant investments made on their product by opening the service to the competition, operators actually have more to gain by embracing the concept.
World Bank further says that interoperability will benefit operators by expanding the pool of customers, reducing incentives to have multiple SIM cards (and thus to make calls on competing networks), and minimise the need for retail agents to have cash, which is costly to move around between different agents.
They model may also benefit agents, who maintain redundant infrastructure for each mobile money deployment they serve as well as enhance overall efficiency gains in the economy.
However, the report warns against premature adoption of the concept, saying it may limit market development and recommends regulators to approach the matter with caution.
In the meantime, third parties like Craft Silicon, Tangaza, KopoKopo and Mobikash are stepping in to make interoperability possible to all consumers but face an uphill task.
â€œWe have launched in Ghana and Uganda where the response, particularly in Uganda which has a relatively young mobile money market, has been much better,â€ states Mr Budhabhatti. â€œIn Kenya consumers are still entrenched in the traditional forms of payment and getting new converts is difficult.â€
To enable the service to gain more traction, Craft Silicon is banking on emerging trends in technology like near field communication. The technology has been identified as the next frontier in mobile technology as high-end smartphones penetration increases expanding middle class market that is ready and willing to adopt the new devices.
Elma was first introduced as a utility bill payment service through mobile provider yu based on its money transfer service yuCash last September.