[kictanet] Equity says M-Pesa lines should be open

Tue Aug 6 16:03:34 EAT 2013

I am not advocating for MPESA to stay closed. I am saying that MPESA is
already open. As I have read elsewhere, I think this request from Equity is
deeper than we see.

Kind Regards, 

Bernard Kioko
Chief Executive Officer

Bernsoft Interactive Limited

P.O.Box 15177-00100 Nbi,Kenya

Office:   +254-703-080-000

Mobile: +254-722-540-883

From: James Mbugua [mailto:jgmbugua at gmail.com] 
Sent: Tuesday, August 06, 2013 3:52 PM
To: bkioko at bernsoft.com
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Equity says M-Pesa lines should be open

Bernard

THe only way other banks would like Equity to open itself up is to give them
its customers' profiles so they can target the good ones.

Payments systems however are already open be it by cheque, cash, RTGS, ATMs
etc the banks talk to each other and we don't notice that one uses
Bankmaster and the other Temenos T24.

Similarly, I'm asking that M-PESA relate the same way with other payment
systems. You shouldn't choose who uses your payment system to pay who unless
it is a case of money-laundering.

In other words, there should be net neutrality, Safaricom can earn its
transaction fees from the massive traffic unimpeded, but it should not be up
to them to determine what nature of business grows on the back of using
their payment system.

I can understand them wanting to protect the customer base they have built,
but it is only a matter of time before technology advances - Whataspp is
becoming a monster in video and image transfer even as Facebook and Google
awaken to it, Bitcoin is becoming a reality and so one How long do you think
it is before you find Money transfer service Apps based on the Android
system alone and not the network operator?

Rather than stay closed, these guys need to open up to every Tom, Dick and
Harry to interface with their API and build businesses on it further
entrenching itself otherwise when Network Agnostic Financial Services
applications come along, it will be a major lost opportunity.

James

On Tue, Aug 6, 2013 at 2:42 PM, Bernard Kioko [Bernsoft Interactive Limited]
<bkioko at bernsoft.com> wrote:

James,

Perhaps am just being narrow minded on this one BUT Equity is also my client
for the same services we provide Safaricom - therefore no biase on either.
In one of my previous posts I asked, whether Equity has opened up its own
infrastructure for integration. Are they asking for something they cant
give?

Equity is the largest bank in Kenya (based on customer base). This also
means that it enjoys the same relative aspects as MPESA does for being
largest money transfer. If Equity was to be affected by these same factors
you have mentioned, we would a banking effect that would be felt by
consumers. Indeed, we noticed this recently. This means they should be
opening up their infrastructure to other market segments - going by what
they are asking Safaricom to do. 

That said, I am trying to pick 1 way Equity has opened up its systems for
integration like they are asking Safaricom to do. I have illustrated one
(though small) way Safaricom has done this.

No one opens up their systems unless they can find value in doing so - not
even Microsoft. All I have said in my post was, Equity should create value
for Safaricom to convince Safaricom to open up their systems/lines further.

I hope you get my point.

Kind Regards, 

Bernard Kioko

From: James Mbugua [mailto:jgmbugua at gmail.com] 
Sent: Tuesday, August 06, 2013 1:51 PM

To: bkioko at bernsoft.com
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Equity says M-Pesa lines should be open

Bernard

Far be it from me to suggest that your business with Safaricom clouds your
outlook, but I think as a software developer you understand what we mean.

Why do you have to present it to Safaricom for them to like it and then give
greenlight further development?

Even Microsft Windows is not that closed. At least there are specs for third
party software development.

THe problem here is that Safaricom cannot be both the owner of the platform
and also the gate keeper of innovations that may run on it. We have not
stopped them from earning money by coming up with standard licensing fees,
but it should not be up to them to decide which idea they like and therefore
should run on a payment system.

This is the same problem AT&T had because they simultaneously owned Bell
Labs which churned out landmark software technologies, they could decide
that a technology that seemed a threat would not run on their network yet
they were virtually a monopoly the way M-PESA by market positioning is a
virtual monopoly.

There are thousands of programmers who could come up with software or games
that could seamlessly integrate M-PESA as a payment platform for their
services without having to go through an approval process where SafCom
technical people are the judges and jury particularly given the integrity
issues that have long been raised of these SafCom IT guys when it comes to
dealing with developers.

But even then, there is the real national security threat of saying that 35%
of our GDP passes through M-PESA when there is no credible redundancy.

What are we saying? That if MPESA is out of a week the economy stagnates?
Potential systemic risks such as banking systems heavily exposed to one
economic sector are heavily discouraged and neither should we say our
national transactions are 35% exposed to one payment system and be happy
about it.

This is nothing against the folks at SafCom, it is just what makes sense for
any right-thinking citizen.

Regards

James

On Tue, Aug 6, 2013 at 1:12 PM, Bernard Kioko [Bernsoft Interactive Limited]
<bkioko at bernsoft.com> wrote:

I actually believe that Safaricom has already opened up MPESA and will
continue to open it up but that depends  on the value the opening up
presents to Safaricom. I always like to use examples that are based on
experiences. 

My company a year ago developed a system for MPESA that makes MPESA
transactions realtime - this is why when you pay DSTV your account gets
reconnected immediately or when you deposit money to your bank from MPESA
its realtime or why your KPLC payment is more realtime than it was before.
We developed this system called "MPESA Instant Payment Notification"
originally for use on Kenya Airways ticketing then presented it to Safaricom
and they liked the idea thus opened up MPESA for us to integrate with and so
most if not all of MPESA Paybill /Bug Good Transactions are now processed
through this locally developed system. 

Isn't this opening up MPESA? I think Equity must justify the opening up they
wish for and give value to Safaricom in order to bring Safaricom to their
advantage.

Kind Regards, 

Bernard Kioko
Chief Executive Officer

Bernsoft Interactive Limited

P.O.Box 15177-00100 Nbi,Kenya

Office:   +254-703-080-000 <tel:%2B254-703-080-000> 

Mobile: +254-722-540-883 <tel:%2B254-722-540-883> 

From: kictanet [mailto:kictanet-bounces+bkioko
<mailto:kictanet-bounces%2Bbkioko> =bernsoft.com at lists.kictanet.or.ke] On
Behalf Of Ali Hussein
Sent: Tuesday, August 06, 2013 12:47 PM
To: bkioko at bernsoft.com

Cc: KICTAnet ICT Policy Discussions

Subject: Re: [kictanet] Equity says M-Pesa lines should be open

James ad all

Well put. The difference though is that industry's open up themselves for
open standards. Rarely do companies. 

Its incumbent upon TESPOK to convince Safaricom to open up its Mpesa system
'fully' as many listers have suggested. The fact is that the Safaricom chaps
are clever enough to see this coming (and if they are not unfortunately they
will go the way of Telkom Kenya). 

Rarely has government intervention in open standards helped the people they
are supposed to help. Even the Banking sector clearing house is run by
Bankers with the hawkish eyes of central bankers looking on.

Safaricom will open up Mpesa fully - when they are good and ready and not a
moment sooner. That's my take.   

Ali Hussein

CEO | 3mice interactive media Ltd

Principal | Telemedia Africa Ltd

+254 713 601113/ 0770 906375

"The future belongs to him who knows how to wait." - Russian Proverb

Sent from my iPad

On Aug 6, 2013, at 11:15 AM, James Mbugua <jgmbugua at gmail.com> wrote:

Openness

I have always felt very strongly about this issue and I agree M-PESA should
be open. I used to barge Michael Joseph relentlessly about this. Open first
in the sense that third parties can interface their products on their API
but secondly and more importantly, open to talk to other platforms the way
banks talk to each other. I can withdraw money from Pesa Point or another
non-Barclays quite easily.

The fact is we cannot let platforms that stifle innovation continue to
prosper. AT&T was finally split up in 1984 not because of its overwhelming
market dominance, but that IT WAS REFUSING TO ALLOW NEW INNOVATIONS TO WORK
ON ITS PLATFORMS thus overall stifling technology.

In the same way, this is not a sustainable position for M-PESA if it
projects its medium to long-term horizon, surely it must see that even the
government will not be comfortable constantly hearing that this % of our GDP
passes through M-PESA.

If I was Safaricom I would be strategizing on how to open up the platform as
painlessly as possible before the combination of disruptive market forces
and government national security interests converge.

Already I can deposit money into my bank account with M-PESA and withdraw it
with Airtel Money. Surely, you don't need to be a genius to see that you
don't need that middle man called the bank if the demand for the service is
there.

Regards

James

On Tue, Aug 6, 2013 at 9:15 AM, Mark Mwangi <mwangy at gmail.com> wrote:

In my opinion what Equity is asking for is for a common platform aka a
common account that can be credited and debited by airtel money, yu cash
orange money, tangaza etc in the manner that a visa credit card is open game
for any merchant, bank etc. This way M-pesa becomes a platform and not a
safaricom product. 

I actually don't see how Safaricom looses in this scenario. Exponentially
more transaction fee collections, Increased dependence by industry players,
maintain the intellectual property and ownership of the platform etc. 

Maybe they are reluctant due to technological immaturity. I also wouldn't
want to embarrass myself after being feted worldwide. 

On Mon, Aug 5, 2013 at 8:31 PM, Kivuva <Kivuva at transworldafrica.com> wrote:

@areba, what Equity wants, if I'm not wrong is the ability for you to
setup a club within MPESA where you can use the platform to transfer
funds without them passing through Safaricom.

The MPESA platform becomes  an enabler.  Unless anybody else has a
better understanding.

--
______________________
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twitter.com/lordmwesh
kenya.or.ke | The Kenya we know

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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.

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