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

Tue Aug 6 17:38:54 EAT 2013

James, we are not arguing I hope. We are just sharing opinions. I for one
don't have much experience and expertise to be able to argue on this matter.

My  view is, what we are asking Safaricom to do, they are already doing. We
are just not seeing that or Safaricom has for some reason failed to tell
everyone that.

Kind Regards, 

Bernard Kioko

From: James Mbugua [mailto:jgmbugua at gmail.com] 
Sent: Tuesday, August 06, 2013 5:33 PM
To: bkioko at bernsoft.com
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Equity says M-Pesa lines should be open

Bernard

We are arguing past each other.

If Safaricom's MPESA is a payment system, then let it charge transaction
fees for that. It is not about creating a value proposition for them because
then they are both taking transaction fees but also eating your innovation.

Just like writing a webpage and including Visa or MasterCard payment option
is as easy as ABC so long as they charge you their transaction fees for
anything you see via that option, MPESA has no business knowing what the
value proposition of my business is, just charge me the transaction fees
even if I am selling shambas at a loss - it is not their business to know
the business case of my business, I wonder if we are getting each other.

Either it is a payment system, or it is an online store which stocks the
services it wants. In the latter case, then different regulatory systems
including VAT for provision of value added services would apply.

That aside, my main concern is with exposure to the system even though
Central Bank has ordered them to relocate their servers to Kenya.

James

On Tue, Aug 6, 2013 at 5:23 PM, Bernard Kioko [Bernsoft Interactive Limited]
<bkioko at bernsoft.com> wrote:

40% of our GDP passes through MPESA..maybe something is wrong with me but I
keep thinking BIG opportunity for  anyone..I would like to have 5% of the
GDP pass through a product of mine...i would define that as success for me. 

Did you know MPESA's biggest competition is not Airtel Money or YuCash or
Orange Money.its little known Tangaza Money Transfer service..

Am also wondering..isn't KPLC powering more than 40% of our GDP (not sure of
the numbers). Have you considered how many people are on Facebook in the
world.over 1 billion yet the world population is 7billion. Shutdown Facebook
and you will see what happens - consider that it's a market place. Is the US
Government busy splitting Facebook? No.

Most banks have big budgets, enough to create a product like MPESA and make
it do well - if Tangaza Money is doing well under the same environment and
they are not even a bank.

My point is, let Safaricom and their MPESA service be. Create a value
proposition/innovation to Safaricom/Vodafone and see if they will agree or
not to open up MPESA to you. 

Also, lest we forget, afew years ago, banks resisted MPESA's existence and
had CBK listened to them, we wouldn't have MPESA today. 

Kind Regards, 

Bernard Kioko

From: James Mbugua [mailto:jgmbugua at gmail.com] 
Sent: Tuesday, August 06, 2013 4:58 PM

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

Bernard

I have no problem with Safaricom even making Sh50bn in profits and I am
incredibly proud of the achievements of M-PESA.

But I have also covered banking and finance and I have never, ever been
comfortable with that statement ever since it first surfaced, that 40% of
our GDP passes through M-PESA. That is enough to give anyone a pause
including those working for Safaricom.

The thing is, either we figure out how to lessen this exposure, if we are
not going to have more openness of the platform to talk to others, or, the
government commission's a new network neutral money transfer system that all
operators are obliged to work with and which it uses for its own bulk
payments.

This new government commissioned system works seamlessly across all
platforms but allows each operator to charge their fees for traffic passing
through their system. 

Regards

James

On Tue, Aug 6, 2013 at 4:37 PM, Bernard Kioko [Bernsoft Interactive Limited]
<bkioko at bernsoft.com> wrote:

Mark, 

In view of your comments, I am forced to remind you that MPESA is a Vodafone
product. Spanner in the works?

Kind Regards, 

Bernard Kioko

From: kictanet [mailto:kictanet-bounces+bkioko
<mailto:kictanet-bounces%2Bbkioko> =bernsoft.com at lists.kictanet.or.ke] On
Behalf Of Mark Mwangi
Sent: Tuesday, August 06, 2013 4:16 PM

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

@robert

Reinventing the wheel is only useful for those with truckloads of cash and
little to loose such as Google building their own browser. In the kenyan
case building a following like M-pesa would take many more years and
considerable effort needlessly. That a significant percentage of the GDP
passes through M-Pesa necessitates intervention that may be detrimental to
Safaricom's financial or dominant status. Let us not forget what the US govt
did to Microsoft. It has to happen for the simple reason of national
security. 

Telling all the other players and consumers to deal with it is not going to
cut it. A commercial entity with majority foreign ownership being allowed to
transact 30% of our business in a closed system?? Tell me that is not being
daft. As I always ask, I wonder what the NSIS thinks of all this. 

On Tue, Aug 6, 2013 at 3:52 PM, robert yawe <robertyawe at yahoo.co.uk> wrote:

Hi All,

Exactly what is the point of this discussion, as it seems someone wants to
say something but is not getting to the point.

What is open, are we suggesting that equity open up its branches and allows
me to sell bananas in their banking halls because they have the largest
client base or is it that the staffs ethnicity needs to show national
diversity or that they should open up their banking software to all and
sundry to connect and do as they wish with the client data, exactly what
does Equity want Safaricom to make open yet they have mKesho together?  

When people start making personal attacks on others for their contributions
it suggests a deeper issue than what the subject indicates and it might be
better for them to put their cards on the table.

Safaricom is a industry player who partner with a certain nondescript bank
called CBA to provide the really kick ass solution, which makes me wonder if
what Equity means by Safaricom being open is in which bank holds the
deposits.

So from where I am sitting the discussion here has nothing to do with an
API, which if you are innovative you do not need, but more a taff war for
the deposits that Safaricom holds on mPesa, MShwari and soon mBima, mSoko,
mMali, mTV, mVituVingiSana.

Regards

PS.  Let us pick a fight we can win like making sure PostaPesa is open

Robert Yawe
KAY System Technologies Ltd
Phoenix House, 6th Floor
P O Box 55806 Nairobi, 00200
Kenya

Tel: +254722511225 <tel:%2B254722511225> , +254202010696
<tel:%2B254202010696> 

  _____  

From: James Mbugua <jgmbugua at gmail.com>
To: robertyawe at yahoo.co.uk 
Cc: KICTAnet ICT Policy Discussions <kictanet at lists.kictanet.or.ke> 
Sent: Tuesday, 6 August 2013, 13:50

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.

--
______________________
Mwendwa Kivuva
twitter.com/lordmwesh
kenya.or.ke <http://kenya.or.ke/>  | The Kenya we know

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