By Judith Gicobi
Safaricom’s M-Pesa has a competitive edge over the planned Central Bank Digital Currency (CBDC) because of its extensive agent network and ability to operate on feature phones, according to researchers.
The planned digital shilling by the Central Bank of Kenya (CBK), which is now under public debate, is considered as a potential rival to mobile money in the future, particularly in terms of transaction costs.
Analysts at investment bank EFG Hermes believe the CBDC would struggle to gain traction since it requires a smartphone app to function, echoing CBK governor Patrick Njoroge’s comments earlier this week.
M-Pesa has an app as well, however it can be used on feature phones without the need for an internet access.
Safaricom has also added a number of financial products to the offering, including merchant and bill payments, business cash transfers, remittances, and bank to wallet transfers.
“M-Pesa will still have a competitive advantage in terms of a captive market as well distribution aspect as well, where it has over 258,000 agents ensuring that the service is accessible to a large proportion of the population,” said Silha Rasugu, EFG Hermes associate vice president—utilities, telecom, oil, and gas.