Dear Quartz, it’s too early to make a call on the success of mobile money in Africa

Tom Jackson, writing for Quartz Africa:

The impact of mobile money, for one, has not been uniform across the continent. M-Pesa has been a resounding success in Kenya, where over half of adult consumers have an account and a huge share of the country’s GDP passes through the system. Yet it was slower to take off in Tanzania, and an outright failure in South Africa.

I think this is Quartz’s idea of kicking a Kenyan child just because it isn’t winning marathons. This article smells of a half-backed “yeah, but…” dig at the rise of digital economies on the continent.

M-Pesa is a huge success in Kenya, yes. That doesn’t mean it has to be a success everywhere on the continent. M-Pesa is a digital currency, as much as the Kenyan shilling in Kenya. No one said the Kenyan shilling was a failure in Uganda or Rwanda.

The future of mobile money is not that one platform has to rule them all. The future of mobile money on the continent is where ALL the various mobile carrier digital money deployments become interoperable, just like cash is exchangeable across borders, weighted by the economic strength of that particular digital currency.[ref]It will be interesting to see how digital mobile money affects exchange rates. Unlike physical currency, digital currency isn’t nationally issued, it is carrier issued and most carriers on the continent are businesses in more than one country.[/ref]

Even though M-Pesa is only about 10 years old, it doesn’t mean that mobile money on the continent is anywhere near mature, and thus ripe to be graded  success or not. With a billion mobile devices on the continent and a rising uptake in smart phones, we are just getting started. In Uganda, MTN continues to see modest growth in it’s mobile money subscribers. There are now more mobile money accounts in the country than traditional bank accounts. There are a lot of eggs in Uganda’s emerging digital economies that are getting ready to hatch; this is the youngest country on the continent, internet penetration is approaching 35%, a few bricks were torn down in the interoperability wall between M-Pesa and MTN’s Mobile Money.

Jackson is looking at mobile money on the continent through American monopolistic eyes, where there has to be a clear winner and a sea of losing efforts. The winner in Africa is that mobile money was invented in the first place. What remains to be done is the removal of interoperability so that multiple players can engage equally. In other words, carriers need to stop trying to control mobile money and let it loose for all to play. For this to truly work, regional policy needs to be created to expressly disallow creation of false walled gardens. Africa’s digital economies can’t be expected to grow much without this policy in place.

It is too early to call mobile money a failure. There are too many pieces still forming in the continent’s primordial digital soup. To claim to have enough facts to have such a view smacks of complete ignorance of the facts on the ground.

Let’s all just wait and see.

Source: M-Pesa shows why mobile money is yet to realize its true potential in Africa – Quartz