Why multinationals are yielding to the allure of M-Pesa

Tech giant Google’s decision to allow customers to pay for applications using M-Pesa has buttressed the idea that for multinationals based in Kenya, Safaricom’s mobile money service is the par excellence agent of localisation.

Google is the latest firm in a string of multinational corporations that have had to think global and act local….act M-Pesa.

For a while, Google required consumers in Kenya to pay for apps and games bought from its Play Store and Game Store using credit cards, as though they were in developed countries such as the US where there is a widespread use of cards.

The use of credit and debit cards in Kenya is not as widespread as mobile money transfer services which, besides M-Pesa, also include Airtel Money, Equity Bank’s Equitel. By restricting payment to credit and debit cards, the Internet giant not only locked out close to 27.8 million users of M-Pesa but also belied Google’s ambition to reach every corner of the earth. 

Acting locally

The decision flew in the face of glocalisation - the practice of conducting business according to both local and global considerations - often put as ‘thinking globally, acting locally.’ True, localisation in Kenya has not necessarily meant embracing M-Pesa.

Think of British multinational Diageo with a controlling stake in East African Breweries Ltd.

Diageo came up with Senator Keg without the difficult-to-source hops in what was aimed at winning over the price-sensitive revellers. Or a Coca-Cola TV commercial in the run-up to the 2014 FIFA World Cup in which the US soft drink manufacturer takes on a Pan-Africanist personality, telling Africans who watched in disbelief as Ghana’s Asamoah Gyan blasted the last-minute penalty on the woodwork in the previous World Cup: “This time around, it seems, only fate stands between us and the coveted World Cup trophy.” The commercial stirred the African brotherhood in us.

But Coca-Cola is not really part of ‘us.’ And, if anything, at the same time Coca-Cola made similar commercials cheering Mexico, Uruguay, Greece, and the US with as much passion as it was cheering Africa.

While it is true that global corporations have to look at various aspects of business, ranging from strategy and pricing to product when localising, embracing Safaricom’s mobile money transfer service is fast becoming the epitome of glocalisation in Kenya.

Even if other local tastes and preferences have to come first, M-Pesa services have to kick-in at some point. Global corporations just can’t run away from M-Pesa.

This is because Kenya’s greenness is today defined more by the ubiquitous M-Pesa agent kiosks spread across the country than forest cover.

Close to 50 per cent of the country’s gross domestic product (GDP) pass through M-Pesa. Kenyans pay for electricity, hospital and water bills using Safaricom’s mobile money service. When a relative is sick, they will fundraise via M-Pesa’s M-Changa. And when they are so broke to pay for electricity, they can get power on credit through Okoa Stima. Surely, Google must have known this.

“This is very important to the developer ecosystem in markets where credit card penetration is low,” said Mahir Sain, head of Africa Android partnerships at Google, which is owned by Alphabet Inc.

The Internet giant joins yet another Silicon Valley start-up Uber, a ride-hailing app, which also had this false notion of there being a cashless economy underpinned by credit cards in Kenya. Today, riders can pay using cash and M-Pesa too.

Retailing franchise Deacons East Africa in February 2011 became the second retailer to accept payment through M-Pesa after it partnered with Safaricom to unveil Nunua na M-Pesa.

This allows its customers in Kenya, Uganda, Rwanda and Tanzania to buy fashion wares through M-Pesa.

Payment channel

And no sooner had French retailer Carrefour settled in Kenya than in partnered with Safaricom in June 2016 to fully integrate Safaricom’s LIPA-NA-M-PESA, paving the way for the retailer to fully adopt M-Pesa as a payment channel in Kenya.

Kenyans can also receive money from relatives or friends in the Diaspora straight to their M-Pesa accounts after American online payment giant Paypal partnered with Safaricom.

Social media platform, Facebook, is yet to be bitten by the M-Pesa bug. But it will soon join the bandwagon, allowing users to pay for adverts via Safaricom’s M-Pesa or Airtel Money.

Facebooks’ Regional Director Nunu Nshitsingila confirmed this during a briefing on the social media’s developments in the region.

“These conversations are ongoing, it is not as easy as it may seem as it involves a lot of regulations. However, our aim is to ensure it is as restrictionless as possible,” Nshitsingila said, arguing that regulation rather than technology is the impediment.

Currently, you can only pay through direct debits, Paypal, manual payments and Boleta for your product to be advertised on Facebook. For Uber, Nairobi became the second city in which the ride-hailing app accepted cash payment and M-Pesa in 2015, after finding it hard to scale up its business in a country where the use of credit card is frustratingly low. Uber’s competitor Taxify in October last year went further and integrated M-Pesa mobile money payment option on its platform, a major relief for most drivers who feel shortchanged every time a customer pays with M-Pesa without including withdrawal fees.

“We are always on the lookout on how to intensely localise the experience of our application across the cities we operate in,” said Taxify’s Nairobi City Manager Alex Mwaura in a statement.

Even money transfer services such as Western Union, MoneyGram and Remit allow users to send money directly to M-Pesa account, thrusting the mobile money transfer service into the lucrative Sh185 billion diaspora remittances market. 

As more Kenyans turn to online platforms, e-payment firms have responded by integrating M-Pesa into their chain.

Paypal account holders can now send money directly to M-Pesa through Xoom.