Competition in Mobile Financial Services: Lessons from Kenya and Tanzania
DOI:
https://doi.org/10.23962/10539/21629Keywords:
Competition in Mobile Financial Services: Lessons from Kenya and TanzaniaAbstract
Mobile financial services (MFS) are the main drivers of financial inclusion in many developing countries, where they provide low-income consumers with access to transfers, payments, and increasingly more complex products including credit, savings, and insurance. MFS channels can provide the advantages of convenient, secure, and cost-efficient product offerings to consumers. In several markets, MFS have helped to significantly increase the portion of the population with access to formal financial services. To promote both quality and diversity in MFS products, and in turn financial inclusion, it is important to ensure a competitive ecosystem that facilitates entry into the market, the development of innovative MFS products, and high-quality, value-for-money services. This article aims to provide insights into the role that effective competition and competition policy play in developing MFS, and in promoting financial inclusion, using Kenya and Tanzania as case countries.
References
Almazán, M., & Sitbon, E. (2014). Smartphones and mobile money: The next generation of digital financial inclusion. GSMA Discussion Paper. Retrieved from http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/07/2014_MMU_Smartphones-and-Mobile-Money-The-Next-Generation-of-Digital-Financial-Inclusion_Web.pdf
Balasubramian, K., & Drake, D. (2015). Service quality, inventory and competition: An empirical analysis of mobile money agents in Africa. Submitted to Manufacturing & Service Operations Management. Manuscript MSOM-15-289. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/15-059_b75bfc4d-3f40-4a2b-afa4-2f131ca1486f.pdf
Bank of England. (2014). Should the availability of UK credit data be improved? Discussion Paper. Retrieved from http://www.bankofengland.co.uk/publications/Documents/news/2014/dp300514.pdf
Bank of Tanzania. (2007, May). Electronic payment schemes guidelines. Retrieved from http://www.bot.go.tz/PaymentSystem/Docs/e_Schemes%20Guidelines%20June%202007.pdf
Bourreau, M., & Valletti, T. (2015). Enabling digital f inancial inclusion through improvements in competition and interoperability: What works and what doesn’t? CGD Policy Paper 065. Center for Global Development. Retrieved from http://www.cgdev.org/sites/default/files/CGD-Policy-Paper-65-Bourreau-Valletti-Mobile-Banking.pdf
Benson, C., & Loftesness, S. (2013, May 30). Interoperability in electronic payments: Lessons and opportunities. [Blog post]. CGAP. Retrieved from http://www.cgap.org/publications/interoperability-electronic-payments-lessons-and-opportunities
Consultative Group to Assist the Poor (CGAP). (2014). Tanzania’s mobile money revolution. [Infographic]. Retrieved from http://www.cgap.org/data/infographic-tanzanias-mobile-money-revolution
Central Bank of Kenya. (2013). Prudential guidelines for institutions licensed under the Banking Act. Retrieved from https://www.centralbank.go.ke/images/docs/legislation/Prudential%20Guidelines-January%202013.pdf
Chen, G., & Faz, X. (2015). The potential of digital data. CGAP. http://www.cgap.org/publications/potential-digital-data
Communications Authority of Kenya. (2015). Quarterly sector statistics report, January-March 2015. Retrieved from http://www.ca.go.ke/images/downloads/STATISTICS/%20Sector%20Statistics%20Q3%202014-2015.pdf
Costa, A., Deb, A., & Kubzansky, M. (2015). Big data, small credit. Omidyar Network. Retrieved from https://www.omidyar.com/sites/default/files/file_archive/insights/Big%20Data,%20Small%20Credit%20Report%202015/BDSC_Digital%20Final_RV.pdf
Di Castri, S. (2013). Mobile money: Enabling regulatory solutions. GSMA. https://doi.org/10.2139/ssrn.2302726
Economides, N., & Jeziorksi, P. (forthcoming 2016). Mobile money in Tanzania. Marketing Science. Retrieved from https://faculty.haas.berkeley.edu/przemekj/Mobile_Money.pdf
Elkhoury, M. (2008). Credit rating agencies and their potential impact on developing countries. Discussion Paper No. 186. UNCTAD. Retrieved from http://unctad.org/en/docs/osgdp20081_en.pdf
Financial Conduct Authority. (2015). Making current accounts switching easier. Retrieved from https://www.fca.org.uk/publication/research/making-current-account-switching-easier.pdf
Financial Conduct Authority Payment Systems Regulator. (2015). A new regulatory framework for payment systems in the UK. Retrieved from https://www.psr.org.uk/sites/default/files/media/PDF/PSR%20PS15-1%20%20A%20new%20regulatory%20framework%20for%20payment%20systems%20in%20the%20UK%20-%20Policy%20Statement.pdf
Gine, X., & Mazer, R. (2016, July). Financial (dis-) information: Evidence from a multi-country audit study. Policy research working paper WPS7750. World Bank Group. Retrieved from http://documents.worldbank.org/curated/en/869451468937960883/Financial-Dis-information-evidence-from-a-multi-country-audit-study
GSM Association (GSMA). (2014a). The mobile economy 2014. Retrieved from http://www.gsmamobileeconomy.com/GSMA_ME_Report_2014_R2_WEB.pdf
GSMA. (2014b). Mobile money in Tanzania. [Infographic]. Retrieved from http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/03/Tanzania-Mobile-Money-infographic-GSMA-MMU.pdf
Ghosh, S. (2015, September 21). Visa shelves mobile payment venture in India as telecom companies refuse to share their network. The Economic Times. Retrieved from http://articles.economictimes.indiatimes.com/2015-09-21/news/66761208_1_npci-visa-ussd
Government of Kenya. (2011). National Payment System Act, No. 39. Competition in Mobile Financial Services: Kenya, Tanzania Retrieved from http://kenyalaw.org/kl/fileadmin/pdfdownloads/Acts/NationalPaymentSystemsAct__No39of2011.pdf
Government of Tanzania. (2010). Electronic and Postal Communications Act, No. 3. Retrieved from http://www.researchictafrica.net/countries/tanzania/Electronic_and_Postal_Communications_Act_no_3_2010.pdf
Government of Tanzania (2015). The National Payment Systems Act, No. 4. Retrieved from http://parliament.go.tz/polis/uploads/bills/acts/1452062539-ActNo-4-2015-Book-1-10.pdf G20
Global Partnership for Financial Inclusion. (2016). G20 high-level principles for digital f inancial inclusion. Retrieved from http://www.g20.org/English/Documents/Current/201608/P020160815359629705498.pdf
Hanouch, M., & Chen, G. (2015, February). Promoting competition in mobile payments: The role of USSD. Brief. CGAP. Retrieved from http://www.cgap.org/sites/default/files/Brief-The-Role-of-USSD-Feb-2015.pdf
International Finance Corporation (IFC). (2015). Achieving interoperability in mobile f inancial services: Tanzania case study. Retrieved from http://www.ifc.org/wps/wcm/connect/8d518d004799ebf1bb8fff299ede9589/IFC+Tanzania+Case+study+10_03_2015.pdf ?MOD=AJPERES
InterMedia. (2015). Financial inclusion insights: Kenya. Web page. Retrieved from http://finclusion.org/country-pages/kenya-country-page/
Kakah, M. (2015, May 30). Equity gets court backing to roll-out thin SIM technology. Business Daily. Retrieved from http://www.businessdailyafrica.com/Corporate-News/Equity-gets-court-backing-to-roll-out-thin-SIM-technology/-/539550/2734256/-/ff86tu/-/index.html
Khan, S., Mehrotra, A., Anthony, L. & Kuijpers, D. (2014). Agent network accelerator survey: Kenya country report 2014. Helix Institute of Digital Finance. Retrieved from http://www.helix-institute.com/sites/default/files/Publications/Agent%20Network%20Accelerator%20Survey%20-%20Kenya%20Country%20Report%202014_0.pdf
Kumar, K., & Tarazi, M. (2012, January 24). Branchless banking interoperability and agent exclusivity. CGAP [Blog post]. Retrieved from https://www.cgap.org/blog/branchless-banking-interoperability-and-agent-exclusivity
Mas, I. (2014). Shifting branchless banking regulation from enabling to fostering competition. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1692164
Mas, I., & Staley, J. (2014, June 18). Why Equity Bank felt it had to become a telco—reluctantly. [Blog post]. CGAP. https://doi.org/10.2139/ssrn.1692164
Mazer, R. (2015, August 17). Fixing hidden charges Lipa na M-Pesa. [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/fixing-hidden-charges-lipa-na-m-pesa
Mazer, R. (2016, November 2). Kenya ends hidden costs for digital financial services. [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/kenya-ends-hidden-costs-digital-financial-services
Mazer, R., & Rowan, P. (2014, August 29). Price sensitivity and the new M-Pesa tariffs. [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/price-sensitivity-and-new-m-pesa-tariffs
Mazer, R., Pillai, R., & Staschen, S. (2016, July 22). Agents for everyone: Removing agent exclusivity in Kenya & Uganda. [Blog post]. CGAP. Retrieved from https://www.cgap.org/blog/agents-everyone-removing-agent-exclusivity-kenya-uganda
Mazer and Rowancgap.org/blog/agents-everyone-removing-agent-exclusivity-kenya-uganda
McCaffrey, M., & Schiff, A. (2014). Competition in Tanzania–fact or fable? Digital f inance in the f ield. Helix Institute of Digital Finance. Retrieved from http://helix-institute.com/blog/competition-tanzania-%E2%80%93-fact-or-fable
McCaffrey, M., Obiero, O., & Mugweru, G. (2013). M-Shwari: Market reactions and potential improvements. Briefing Note #139. MicroSave. Retrieved from http://www.microsave.net/files/pdf/BN_139_M_Shwari.pdf
McKay, C., & Zetterli, P. (2013, January 3). Unintentional consequences: Branchless banking in Ghana. [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/unintentional-consequences-branchless-banking-ghana
McKee, K., Kaffenberger, M., & Zimmerman, J. (2015). Doing digital f inance right: The case for stronger mitigation of customer risks. Focus Note 103, CGAP. Retrieved from http://www.cgap.org/sites/default/files/Focus-Note-Doing-Digital-Finance-Right-Jun-2015.pdf
Morawczynski, O. (2015, October 30). Just how open is Safaricom’s open API? [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/just-how-open-safaricom%E2%80%99s-open-api
Mullainathan, S., Noeth, M., & Schoar, A. (2012). The market for f inancial advice: An audit study. NBER Working Paper No. 17929. National Bureau for Economic Research. https://doi.org/10.3386/w17929
Mulwa, P., & Mazer, R. (2014, July 14). Is Kenya ready for an MVNO? [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/kenya-ready-mvno
Murithi, J., & McCaffrey, M. (2015, December 14). Competition in the Kenyan digital finance market: Mobile money. [Blog post]. Helix Institute of Digital Finance. Retrieved from http://www.helix-institute.com/blog/competition-kenyan-digital-finance-market-mobile-money-part-1-3
Musa, O., Niehaus, C., & Warioba, M. (2014, July 15). Is Tanzania ready for interoperability in mobile money? [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/tanzania-ready-interoperability-mobile-money
Musa, O., Niehaus, C., & Warioba, M. (2015, March 4). How Tanzania established mobile money interoperability. [Blog post]. CGAP. Retrieved from http://www.cgap.org/blog/how-tanzania-established-mobile-money-interoperability
Muthiora, B. (2014, August 21). Kenya’s new regulatory framework for e-money issuers. [Blog post]. GSMA. Retrieved from http://www.gsma.com/mobilefordevelopment/kenyas-new-regulatory-framework-for-e-money-issuers
Mwaura,S. (2015, May 27). Helix Institute of Digital Finance agent network accelerator survey launch. Media release? Nairobi: Helix Institute of Digital Finance?
Nyaga, J. (2014). Mobile banking services in the East African Community (EAC): Challenges to the existing legislative and regulatory frameworks. Journal of Information Policy, 4, 270-95. https://doi.org/10.5325/jinfopoli.4.2014.0270
Ochieng, L. (2014, July 27). CAK orders Safaricom to open up M-Pesa. Daily Nation. Retrieved from http://www.nation.co.ke/business/CAK-orders-Safaricom-to-open-up-M-Pesa/-/996/2399632/-/69n55oz/-/index.html
Okuttah, M. (2016, January 5). CA loses power to regulate dominant telcos. Business Daily Africa. Retrieved from http://www.businessdailyafrica.com/CA-loses-power-to-regulate-dominant-telcos/-/539546/3021508/-/item/0/-/ilbadqz/-/index.html
Ouma, M. (2015, August 25). Tariffs key focus as Safaricom increases Equitel to Mpesa transaction charges. CIO/East Africa. Retrieved from http://cio.co.ke/news/top-stories/tariffs-key-focus-as-safaricom-increases-equitel-to-mpesa-transaction-charges
Safaricom. (n.d). Terms and conditions for the access and use of the Safaricom web self care service, Clause 10.2. Retrieved from https://selfcare.safaricom.co.ke/FrontEnd/TermsAndConditionsAction.action;jsessionid=AAD962AB87EE68E26A8C8E3E64B1E59D.jvm4?name=RegisterTermsAndConditions
Tanzania Communications Regulatory Authority (TCRA). (2011a). Electronic and Postal Communications (Consumer Protection) Regulations. Government Notice No. 427. Retrieved from http://www.tanzania.go.tz/egov_uploads/documents/EPC%20consumer%20Protection%20Regulations%202011.pdf
TCRA. (2011b). Postal Communications (Tariffs) Regulations. Government Notice No. 421. Retrieved from https://www.tcra.go.tz/images/documents/regulations/tarrifs.pdf
Downloads
Published
Issue
Section
License
Copyright (c) 2016 https://creativecommons.org/licenses/by/4.0

This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
- Abstract 416
- pdf 132
.png)