February in Payments
Here is a summary of the month of February in payments:
At the Mobile World Congress, PayPal announced that they would be linking their service with M-PESA. It seems that the move would happen through PayPal subsidiary Xoom and not PayPal proper. An M-PESA-PayPal linkage allowing people to move their funds between PayPal and the mobile wallet service could potentially be huge for the payments processor. The company also sought to play catch up with mobile competition by launching a revamped mobile app.
The American online payments processor is facing increased competition at home from startups such as VenMo, Square and Stripe.
Stripe’s product is expecially interesting as it allows companies to receive card paymnets directly effectively cutting out PayPal’s role as a middleman.
Still on Stripe the startup introduced a new service as it seeks to expand worldwide. Stripe’s Atlas service will allow companies all over the world to incorporate in the US in order to receive payments. I suppose that a huge obstacle to the company as it seeks to expand internationally was the need for companies to be domiciled in juridisctions where the startup is allowed to operate, mainly the United States. For USD 500 only, now businesses from all over the world get a corporation incorporated in Delaware, a business bank account and an account with Stripe allowing them to receive payments from all major card issuers.
The Chinese New Year came with the news that Chinese consumers had made more mobile payments via WeChat payments on the lunar New Year than PayPal had had transactions in the year before. WeChat is the end-all-be-all-app in China, where mobile payments are very strong.
Still in China, Apple Pay launched the month before, but they will have to deal with a Chinese payments ecosystem that is dominated by AliPay, and formidable competitors such as the aforementioned WeChat payments.
Closer home the Central Bank of Kenya rules requiring all those transacting more than KES 1,000,000 in cash to give special reasons came into full effect. Commercial banks are expecting the uptake of alternate channels such as EFT and RTGS to increase in the wake of this move. A section of the legislature has since moved a motion that seeks to ammend the rules.
Across the border in Uganda, the Communications Commission shut down Mobile Money services as Ugandans went to the polls, in a move it said was meant to ensure security on polling day. The move goes to show the increasingly important role played by mobile payment services across East Africa. Local remittance service Remit.ug , that allows people to send money directly to mobile from their payment cards abroad, had to ask customers to come fetch money from their offices as a work around.
The government of Kenya announced that it collects over KES 2B in e-payments from its e-Citizen service. The County of Nairobi also announced that they intend to stop cash payments at City Hall completely at the start of the next financial year following the reported success of it’s e-JijiPay payment service.
Meanwhile international bitcoin fund BitFury announced an investment in local Bitcoin remittance startup BitPesa.