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.
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