Digital economy blueprint

4.3  RATIONALE FOR DIGITAL BUSINESS

Digital technology creates opportunities for disrup-

tion. New technologies give access to markets that 

were previously closed and removes distortions in 

demand by giving customers direct access to products 

previously controlled. 

Rapid technological developments have created new 

markets that now connect consumers, lower transac-

tion costs and reduce information asymmetry. M-PE-

SA, Kenya’s leading mobile money platform, was one 

of  the  first  banking  applications  to  be  embedded  in 

mobile SIM toolkits. The mobile money infrastruc-

ture has created a new market and disrupted the finan-

cial industry ecosystem to become a major competitor 

against the traditional banking sector. 

Mobile money enables transfer of money from person 

to person, buying airtime, paying utility bills, among 

others. The product connected a population which 

was hitherto unbanked mostly in unserved and under-

served areas of the populace. In Kenya, a taxi-hailing 

company, Little Cab, powered by an app managed 

by a mobile network services provider Safaricom, 

is operational and has made debuts in Uganda, and 

will soon be in Rwanda. Uber recently innovated fur-

ther by launching an option for motorcycles (locally 

known as ‘boda boda’) dubbed “Uber Boda” service 

that now provides an additional value to the original 

model.

E-commerce offers great opportunity for Kenya, with 

the possibility of trading platforms designed for the 

Kenyan user. In Kenya, platforms such as ‘Masoko’, 

‘MYDAWA’, ‘Kilimall’, ‘MoBar’ and ‘PigiaMe’, 

among others, have great potential to grow expo-

nentially,  a  feat  that  could  be  realized  through  the 

strengthening of some foundations such as competi-

tive payment solutions.

Kenya has made great strides in mobile payments.  

However, there is now a concerted effort to move 

from mobile payments towards a focus on value cre-

ation, which encompasses access to credit, access to 

markets and access to business skills. Secondly, the 

country is focusing on the need to increase interoper-

ability among e-payment platforms. 

The government of Kenya is convinced that mobile 

payments and cashless solutions must be easy-to-use 

and not limited to one primary provider. Furthermore, 

payment solutions should reduce operating costs for 

businesses and platforms. Enhanced interoperability 

will reduce friction in e-commerce transactions, in-

crease ease-of-use for consumers and reduce costs for 

platform operators. E-commerce and its users benefit 

from an environment where payments are secure and 

can be made easily and confidently.