What The Visa-Safaricom Partnership Should Portend For Kenyans

By David Mugun |Author|Management Consultant & Trainer|Publisher|

That Visa International, the digital payments solutions conglomerate and Safaricom, East Africa's foremost telco have signed a deal to open the Mpesa wallet to transactions with Visa's authorized links globally, is the best financial news so far during this Covid-19 pandemic. In a way, symbolically, it marks the end of a dark era by lifting the lockdown veil on the digital equivalent of Visa debit card issuance to those at the bottom of the pyramid.

It is in this lowest segment of society that Safaricom, two decades ago, struck gold as it emerged victorious from its vicious battles for market dominance against Kencell, which at the time, practised social distancing from the hoi polloi. This precious find has certainly paid off handsomely for this Vodafone associate, as many entities now queue up to partner with it.

When in 2013, I wrote about the revolutionary relationship between Safaricom and the then Commercial Bank of Africa-CBA, a fresh innovation named  Mshwari was the new kid on the block. At the time, CBA was not even playing in the big boys league of the top 5 of Kenya's tier one banks. It was a visibly crowds-shy upmarket bank.

But it was this relationship with Safaricom, that took its customer base into the unprecedented millions zone, and lifted all its financial indicators into the realm of the few audacious and aspiring outfits that were raring to go, as it now had the voice to announce to the whole world that it would expand into the rest of Africa.

You can talk again about the benefits of having a mass-market propulsion agent in Safaricom, we know it because it gave CBA a formidable retail division.

And after it rapidly gained market share on all players, a much larger CBA Bank, merged with NIC Bank to form the third-largest bank in Kenya trading as NCBA.

The verdict on this first collaboration is a positive one largely because the Artificial Intelligence employed, sizes up everyone accurately and then lends out money on merit. It has now birthed Fuliza, the overdraft product that also marks credit limits via AI. This has deepened the Kenyan financial space, digitally, thanks to Safaricom.

The Telco has the Midas touch when it lends its massively appealing voice to an ally. And this is what Visa now hopes will rub off on it as it cements its union with Safaricom in an effort to enable Kenyans to make or receive payments directly, for goods and services procured locally and abroad.

The dawn of a scaled-up digital payments system is quite significant as it is a crucial component in our growth as a nation. It is a big win for both the conventionally banked and the unbanked Mpesa wallet clutching Kenyans.

And Kenyans have a huge ask. The mass-market segment that this partnership targets for the bulk of the transactions business, in money terms, is not as astute as the wealthy cream of our society who, if need be, can afford consultants. Ours is a lot that literally craves for success, and any new service should be a real beacon of hope and never the familiar straws that they clutch on to hopelessly.

This lot is a euphoric one that in early 2003 got Kenyans declared as the most optimistic people on earth as they banked their hopes on the new Kibaki presidency. I see them extending the same enthusiasm to this new arrangement. In fact, Visa's ExCo representative will write: "there has been an incredible uptake...."

Please note that some financial players who achieved phenomenal successes on the backs of this vulnerable group have changed focus midway and gone upmarket for 'fresh air'. This has left the masses financially orphaned and bitterly suspicious of other well-meant initiatives, yet again. So we ask that you make this pact a  win-win for business and society at large.

The winner here must be the innocent Kenyan who over the years, has had to contend with unreasonable intermediaries in the supply chain of consumer products and services. For far too long, Kenyans have been subjected to awkward pricing regimes that have milked them dry of their hard-earned money. We are a country with one of the most questionable pricing practices in the world. I confirm that we seldom see any science in our pricing approaches.

That is why several people only shop for clothes when abroad or when in a position to send someone, simply because what's sold at home is overpriced. The same applies across the spectrum of goods and services. Even sellers of poorly crafted wares sold by the roadsides, demand ridiculous amounts of money for them. That is also why our medics are losing out big time to India on treatment opportunities, because the entire Indian experience including the travel aspect is a bearable fraction of what is charged locally, for the full treatment. A big brother has the credibility to positively influence unfair pricing behaviours on behalf of the masses that he serves. That is how to give back.

By the way, working in Kenya requires unique skills that most of the times subject citizens into stretching, bending or even sometimes, neatly folding away the rules and regulations, but with no intentions to  'break' any law. Regrettably, it is for want of exposure to fairer opportunities around purchasing decisions.

Unfortunately, there isn't a world championship event in which we can demonstrate these particular set of homegrown compensatory skills, for humanity to marvel at, as is the case with our athletics prowess, when the rest of the field, is left gasping in our wake. And so, many will never get to know of these costly pre-tax huddles that exhaust us in our quest to prosper, and specifically, those from first-world settings, either have no clue at all or if they do, they stir up things to keep exploiting Africa.

So, a starter's guide enumerating the do's and don'ts will go a long way in protecting the masses. Frequent updates on scams online will help in shielding our raw innocence from scoundrels lurking in cyberspace.

These constraints will most probably be spoken of in past tenses if this alliance maintains a reasonable transaction costs regime and takes up some big brother responsibilities, so that the new market possibilities that come with it, lend momentum to the compounding effects of all other financial initiatives at play now. We need enablers and not inhibitors that rack up our business costs unnecessarily. The combined force of these two giants as responsible corporate citizens can be purposed to help keep known exploiters out of this new platform using AI. This will help to clean up our business ecosystem. Most things are best done from the onset.

We have the energetic and tech-savvy millennials and the generation Zs to thank, for aiding this partnership with their sheer numbers. For these youthful techies, the endless gigs that await their attention will see them benefit from convenient transactions that are free of the unwarranted manual interventions that older generations had to bear with. One-to-one contracts between our youth and the discerning global markets will allow us to unleash our ready manpower on the world in an unprecedented manner. This partnership might just solve our huge unemployment problem hence our request to keep a clean ecosystem so that the world may see our good side too. Drain the swamp, please.

A Visa transaction from my Mpesa wallet means that I can transact without the need to first purchase foreign currency as it will happen seamlessly without much thought. And more so, without hustle for the benefit of Moraa, Atieno, Cherono, Wanjiku and Zainabu who seek simplicity.

For the commoner, It is far better to be spoilt for, rather than be limited by choice, and this deal does just that by facilitating transactions directly with options that bypass our middlemen.

Let Sereti in Narok, now shop online for what she has only dreamt of since childhood and have it shipped to her within days. Let this pact be empowering too for Angelei, Noor and Godana in the northern frontiers as they transact internationally from the palms of their hands. Wepukulu in western Kenya will settle his import account with Kisochi at the port of Mombasa without a problem.

No doubt, this treaty with Safaricom will shake the banking world as it happened back in 2007 with the launch of Mpesa. Transactions happening in trillions of shillings away from many banks will surely stress up as much as it will bless those in the loop.

The shakeup is not a long shot away. A recently released report ranking the top financial players in Kenya has been doing the rounds on social media. It shows Safaricom, a non-banking institution ranked third overall and ahead of banks that previously were our gold standard institutions. This partnership shall give it the oomph to elbow out the two banks ahead of it, and no doubt, it will lead the pack very shortly. It is a victory for non-traditional players over conventionalism. It is from such developments that new business perspectives of monumental proportions emerge. The kinds that bring to the fold millions more of people hitherto sidelined by very traditional business models.

This new possibility that is still subject to regulatory approvals, simply put, makes Kenya and many places in the world next door to one another.

Therefore, all made-in-Kenya products and services must now be recreated to sway us from desiring foreign-made stuff and in the same breath, make our products broadly appealing to the world markets. It is now an apple for an apple. This is a tall order but not an insurmountable endeavour. The journey must begin or improve in earnest. The two giants must lend a hand here and make this a boon for our craftsmen.

Those trading with us out there will equally benefit from a stepped-up experience that has the true potential to make us a prefered nation to do business with at the micro-level.

The Central Bank of Kenya will be keen on the safeguards around Anti-Money Laundering- AML, Know Your Customer- KYC processes and what's in store for the greater good of society.

This is a much welcome move from two admirable institutions. Just let it come with a good sustainability program for the less-privileged members of our society. For to them, that much is given, much is expected.

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