Central Bank of Kenya wants to control Mpesa App

Central Bank of Kenya wants to control Mpesa App. PHOTO/Courtesy

The Central Bank of Kenya (CBK) is seeking  to regulate the fastest-growing Super Applications, and Mpesa App in particular,  due to large transactions they are handle daily.

In Kenya, Safaricom launched its M-Pesa Super App in June 2021. The mobile banking service app has seen a quick uptake in a year, having hit a record five million downloads.

The app currently has platforms such as banks, insurance sectors, booking services including air tickets and now the recently launched virtual visa card dubbed GlobalPay.

The M-Pesa GlobalPay Visa Virtual Card will gradually be available across other M-Pesa markets through the M-Pesa Super App under a strategic partnership between M-Pesa Africa and Visa. These include Tanzania, the Democratic Republic of Congo, Mozambique, Lesotho and Ghana.

This means the App can handle hefty transactions in a day.  The CBK feels that due to these large transactions, the Mpesa App is  becoming a major disruptor in the digital financial services ecosystem and must be regulated.

“The regulatory framework will need to be agile to regulate super-apps offering e-commerce, loans, insurance products, investing platforms, etc. within the same platform,” CBK said in a statement.

A Super-App constitutes several mini applications that provide tailored services, using one integrated interface or platform.

They allow users to access applications for pay, commerce, mobility, entertainment, and communication from one platform, instead of through multiple apps.

According to CBK, super apps are being driven by the penetration of smartphones and changing consumer preferences for bundled services.  

KPMG, an audit firm, says Super Apps are proving to be a threat to the banking sector. The firm says further that the banking industry has to adjust to the development to compete with the apps.

However, KPMG says that there are several  factors that banks should be worried about amidst the  wave of Super Apps.

First, the super apps  are disintermediating banks from their customers. Second, they are using their vast wealth of data to deliver better services and are also building their brand reputations in financial services.

“While the rise of super apps in the East may seem like a fairly peripheral trend to the banking sector, the reality is they have the potential to up-end it,” says KPMG.

M-Pesa Super App has redefined how the global front views Kenya’s mobile banking, enabling timely transactions in 200 countries.

It is currently the largest revenue contributor to the parent company, Safaricom, having hit a Ksh.100 billion mark for the year ended December 31, 2021.

M-Pesa revenues spurted by 38.3 percent to Ksh.107.7 billion from Ksh.86.2 billion in 2020.

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