Mobile money versus Cash: the devil in the details that eludes many SME’s
The numbers on some alternative payment channels are; Safaricom on its Lipa na Mpesa service takes 1% of each transaction value, Equity Bank with their transport centric service BebaPay which is in partnership with Google take 5%, while PesaPal a payment services aggregator levies a 3.5% transaction fee on e-commerce, bill payments and invoicing and 5% on ticketing. For service based businesses, these transaction fees could be considered okay, but for those moving product, a deeper analysis will reveal why adoption may be stifled. More here - *http://www.mbuguanjihia.com/business/mobile-money-versus-cash-devil-details.... <http://www.mbuguanjihia.com/business/mobile-money-versus-cash-devil-details.html>* .
There are so many counterfactuals to your statement that it at least deserves mention: amazon.com online store Walmart/Nakumatt physical store Cash is always better because it has no direct risk but: 1. Cash can be more easily stolen 2. Cash can be skimmed by employees 3. Cash takes time to be able to be used elsewhere (i.e. you typically have to deposit it into a bank in order to pay vendors) 4. Cash is difficult to account for in real time 5. Cash is hard to physically move in branch networks 6. Cash is annoying for some buyers (i.e. those who want to buy more product than they have cash for in their pocket) A 1% fee to use money that is instantly available and represents the full liquid assets of a consumer and is harder to steal is worth the cost hands down - and I think most thoughtful business people would agree. -- Kili.io - OpenStack for Africa: kili.io Musings: twitter.com/varud <https://twitter.com/varud> About Adam: www.linkedin.com/in/adamcnelson On Thu, Jan 9, 2014 at 10:41 AM, Mbugua Njihia <mbugua.njihia@gmail.com>wrote:
The numbers on some alternative payment channels are; Safaricom on its Lipa na Mpesa service takes 1% of each transaction value, Equity Bank with their transport centric service BebaPay which is in partnership with Google take 5%, while PesaPal a payment services aggregator levies a 3.5% transaction fee on e-commerce, bill payments and invoicing and 5% on ticketing. For service based businesses, these transaction fees could be considered okay, but for those moving product, a deeper analysis will reveal why adoption may be stifled.
More here - *http://www.mbuguanjihia.com/business/mobile-money-versus-cash-devil-details.... <http://www.mbuguanjihia.com/business/mobile-money-versus-cash-devil-details.html>* .
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+1 Adam. I think we are seeing the usual big boys of cashless payments being dis-intermediated by the Safaricom's and Squares of this world. One up for a Flat World! Ali Hussein +254 0770 906375 / 0713 601113 "I fear the day technology will surpass human interaction. The world will have a generation of idiots". ~ Albert Einstein Sent from my iPad
On Jan 9, 2014, at 10:51 AM, Adam Nelson <adam@varud.com> wrote:
There are so many counterfactuals to your statement that it at least deserves mention:
amazon.com online store Walmart/Nakumatt physical store
Cash is always better because it has no direct risk but:
1. Cash can be more easily stolen 2. Cash can be skimmed by employees 3. Cash takes time to be able to be used elsewhere (i.e. you typically have to deposit it into a bank in order to pay vendors) 4. Cash is difficult to account for in real time 5. Cash is hard to physically move in branch networks 6. Cash is annoying for some buyers (i.e. those who want to buy more product than they have cash for in their pocket)
A 1% fee to use money that is instantly available and represents the full liquid assets of a consumer and is harder to steal is worth the cost hands down - and I think most thoughtful business people would agree.
-- Kili.io - OpenStack for Africa: kili.io Musings: twitter.com/varud About Adam: www.linkedin.com/in/adamcnelson
On Thu, Jan 9, 2014 at 10:41 AM, Mbugua Njihia <mbugua.njihia@gmail.com> wrote: The numbers on some alternative payment channels are; Safaricom on its Lipa na Mpesa service takes 1% of each transaction value, Equity Bank with their transport centric service BebaPay which is in partnership with Google take 5%, while PesaPal a payment services aggregator levies a 3.5% transaction fee on e-commerce, bill payments and invoicing and 5% on ticketing.
For service based businesses, these transaction fees could be considered okay, but for those moving product, a deeper analysis will reveal why adoption may be stifled.
More here - http://www.mbuguanjihia.com/business/mobile-money-versus-cash-devil-details.... .
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KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
participants (3)
-
Adam Nelson -
Ali Hussein -
Mbugua Njihia