Mobile industry champions paying with phones

Paying with a mobile phone is gradually become a reality for consumers, with banks, telecommunications operators and Internet players all jumping in to offer payment options.

But while one group is pushing for a system of payment through an electronic wallet hosted on the web, another is investing in an infrastructure that would allow customers to pay by swiping their phones against a reader.

The latter, championed by Internet giant Google and telecoms operators like Orange and Vodafone, is made possible by so-called Near Field Communication technology.

It requires buyers to have specially equipped telephones, while sellers need to have new payment terminals installed.

Yet it is the method preferred by both operators and banks, and particularly appears destined for developed countries.

At the world's biggest mobile show in Barcelona in the past week, several handset makers previewed telephones compatible with NFC, while chip makers Gemalto, INSIDE Secure or STMicroelectronics all demonstrated their solutions for mobile phone payment.

However, "despite the large scale trials and some other announcements, we are far from a massive utilisation by consumers, neither are we seeing deployment on an industrial scale among sellers," lamented Patrick Flamant, manager at internet payment operator Ogone.

Analysts say that payment by NFC telephones may be eclipsed by other methods that consumers find more handy -- public transport cards, identification badges or store cards.

"For me, NFC will never take off because I believe more in payment solutions via social networks -- Facebook credit or PayPal," said Gilles Blanc, Benchmark group's research director.

US credit card giants Visa and Mastercard have meanwhile chosen to invest in both methods of payment -- NFC and its sophisticated telephones as well as mobile payments with basic telephones, which would be better adapted for developing countries.

"Mobile is a channel which allows many different things across different markets," said Hannes van Rensburg, who heads Visa's mobile payment unit for emerging markets.

Orange Money, a subsidiary of French operator Orange, has also signed a deal with Visa to offer pre-paid accounts in seven African countries and Middle East for mobile clients -- many of whom have never had a bank account -- to pay with their telephones.

Mastercard has also partnered with banks or operators to offer mobile payments.

"It's not so much about technology but to make an experience proposition for the consumer better, more secure and faster," said Santander Card manager Javier Herraiz, a partner of Mastercard.

By AFP

M-PESA can now send as low as Sh10

NAIROBI, Kenya, Mar 1- Telecommunication solutions firm Safaricom has announced a major tariff review that will enable more Kenyans in the low income segment to access its mobile money transfer service, M-PESA.

In the changes that are geared towards promoting the financial inclusion agenda in Kenya, registered customers will now be able to send or receive amounts as low as Sh10 from the previous limit of Sh50 effective immediately.

Transfer charges within this band will be pegged at Sh3.

"It was very clear to us when we undertook this tariff review that we were in a unique position to extend the benefits of financial inclusion to more Kenyans, particularly those in lower income groups who rely very heavily on our service," Safaricom Chief Executive Officer Bob Collymore said.

The review also makes it easier for customer make micro-payments from as low as Sh10 to Sh49 per month.

Introduced in 2007, the service had over 15.2 million customers and about 35,000 agent outlets countrywide. Over 700 organisations accept bill payment via M-PESA and a further 300 are bulk payment partners.

The company has also introduced 11 new tariff bands as it aims to rationalise the previous disparities between transaction amounts and charges levied for the same.

At the same time, the transaction fees for the band which lies between Sh101 and Sh500 and which accounts for over a quarter of all M-PESA transactions has been lowered by 16.6 percent to Sh25.

This firm hopes that the move will spur more transactions.

"We are particularly conscious of the fact that about seven in ten adults in Kenya now have access to some form of mobile money service and as the pioneers in this space, we have a specific role to ensure that our service remains affordable to everyone," Collymore stressed.

However, Safaricom hopes to make up for the reductions by increasing the levies charged on transferring larger amounts.

For instance, a customer who sends Sh501 to Sh5,000 will pay a transaction charge of Sh30 while those sending Sh5,001 to Sh20,000 will part with Sh50.

Amounts ranging between 20,001 and Sh45,000 will attract a Sh75 levy while the fee for those that lie within the Sh45,001 and 70,000 band will be Sh100.

Previously, the charge for sending Sh100 to Sh35,000 was Sh30 while a fee of Sh60 would be deducted for a transaction ranging from Sh35,001 to Sh70,000.

The withdrawal charges have also gone up and will range from Sh45 to Sh300.

"We have had to increase the charges levied on the bigger amounts being transferred. This is motivated, in large part, by the need to give greater incentives to our growing agent network to embrace higher value transactions, while improving overall efficiency for our customers, particularly float availability," the CEO added.

by EVELYN NJOROGE

For start-ups, tech hub anytime, not Konza city

There has been a lot of talk about Konza City, identified as the possible future Silicon Valley of East Africa and maybe even of Africa.

Tanzania is following up with Raphta City, which more or less follows the Konza City Model.

I would imagine there would be more coming up across the region – one in Uganda and another in Rwanda.

But Konza City does not seem aimed at appealing to the younger developers.

It is modelled to attract only the financially stable companies, primarily from the West or the Far East.

Software developers are flocking in large numbers into tech hubs and this will remain so for the foreseeable future.

So, why are the hubs seemingly being preferred to the bigger tech cities?

If we go back, the story of Silicon Valley had most developers beginning their projects inside their bedrooms or inside their garages.

Google, HP, and a lot of other companies started out this way. It was a cheap way to start out.

Once you had an Internet connection, space to work, a bit of equipment, got your business incorporated and raised some capital, you were good to go.

You slept and worked there, it was home, it was your office, and it worked. Fast-forward to today, and the cost of relocating to Konza City just seems too steep.

To become a resident will not be as easy as paying rent for a low cost office or flat in the city.

You will need a lot more money to gain access; money that could be useful in other aspects of the business like development, marketing or scaling up.

Usually, the romantic view of a start-up is a young person seated in a room somewhere with an Internet connection and a laptop, bashing out code or meeting customer requests. The model has not changed that much when you explore the hub system.

If you have an innovative idea and the smarts to do it, getting into a hub is one of the most practical and cost effective ways to go.

That way, you can gain access to resources that would cost more than a starting developer could afford. With present-day inflationary tendencies, this becomes more of a blessing.

Then there is the aspect of collaborative work. Yes, Konza may offer the same collaborative eco-system, but if you are in Konza, and looking at your costs and time, collaborating may not be as high on your agenda as earning rent and meeting your business objectives would be.

That means a lot of young developers, if they gained access, would risk being isolated from the greater wealth of collective thinking and shared skills.

When I look at the iHub model, it is admirable to see skills being shared and new ideas being developed faster and much better.

Collaborating on ideas is probably one of the best ways to go as the more minds there are on one project, the better the project becomes.

Realising such would be rare in a tech city; which brings out the question of proprietary. When signing up to the iHub, it is mentioned that your skill-set may be requested to assist others who may need it.

This would not work in a proprietary eco-system as the legal work alone would be expensive and complex and would undermine the actual project.

Personally, I believe ideas are free and the best executor is the winner, and that teamwork always wins.

Last year, I was humbled to be invited to speak at the launch of the ICE hub, the first technology hub in Ethiopia. I ended up mediating a proprietary problem they had.

An individual had wanted to join the hub but was demanding that his work should not be discussed, and that he be allowed to build a proprietary business out of the hub.

The resolution was simple. The gentleman had to either come in without the proprietary label or not be allowed to join.

I supported the decision. Coming into a tech hub with a proprietary label would not help in skills transfer, which were badly needed there. Moreover, it would have caused a lot of legal headaches.

In the end, we need a better approach to Konza for it to prove beneficial beyond the residents.

Technology will not grow in a proprietary and expensive eco-system. In today's world, that is a pipe dream. Instead, a low cost open and easy model will work.

As modelled, Konza City could end up isolating people – having the financially able there and everyone else excluded.

But again, it may not be far-fetched to think that Konza City is not intended for start-up developers.

By KAHENYA KAMUNYU