Turn down mobile money payments at your own peril

Council of Governors chairman Isaac Ruto addresses the Governors Summit in Naivasha last week. Photo/Suleiman Mbatiah 

 

By Odhiambo Ramogi

While at the Coast last week at an eatery on the beach, I witnessed something out of the ordinary. The manager refused to accept payment by mobile money from a group of women. I was appalled as I also was on the queue hoping to use the same technology.

Any business in Kenya should know that M-Pesa was a bigger discovery than even the telephone. In the past, money was transferred using courier, although it was unacceptable.

The post office was available but money orders took too long while the snail mail was also inconveniencing. Further, a majority of Kenyans were unbanked and bank transfers were considered expensive and elitist.

Then came M-Pesa that was a game-changer. It is reliable, fast, efficient and cost-effective. It also created employment.

Our relationship with mobile money is not only functional, but also sentimental. It will go down in history that it was invented in Kenya, a developing country.

The number of Kenyans owning phones is in the region of 31 million. The mobile money has enabled financial inclusion beyond targets.

But more importantly, it has created an easily accessed financial platform spurring economic growth. But why is the mobile money the better option as a financial platform?

Before Equity Bank helped other lenders to discover the value at the bottom of the pyramid, they were inaccessible, insisting on huge minimum balances and other barriers. This made many ordinary people shy away from mainstream financial services and use the pillow as bank.

Credit cards did not help since the experience in the Western world discouraged the local middle class. Worse, the population viewed it as elitist, something that Kenyans did not want known for since the people with real money in this economy do not want to be known as having resources.

Mobile money changed all this. All and sundry could put low amounts on their phones, and, today, one can deposit, transfer, make payments and borrow. This is why banks are running to marry their accounts with mobile money.

In the last decade, ICT alone contributed to about 25 per cent of the country’s economic growth. In the next 10 years, the key drivers of growth will be the Internet and the mobile phone.

I was therefore surprised that an entrepreneur can reject mobile money payment.

Today, one only needs a business number and payments can be made. Holding on to the elitist mode of credit cards would be equivalent to Kodak holding on to the film in an era of DVDs.

Mr Ramogi is the managing consultant at Elim Consulting.