Archive for: Tanzania

These past few weeks we’ve been focused on Tanzania’s experience with mobile banking. We’re not alone. Gunnar Camner and Emil Sjöblom recently spent three months in Tanzania for their master’s thesis in Media Technology at the Royal Institute of Technology (KTH) in Stockholm, Sweden. Their study attempts to investigate mobile banking services from a user perspective. In which contexts do alternative uses, e.g. savings, become popular and why? The final report will be presented during autumn 2009 and made available at the project blog: http://valuablebits.com. Meanwhile, they sent us this dispatch.

While M-PESA in Tanzania has had a hard time competing with its sibling in Kenya in user uptake, there is one way of sending money via the mobile phone that is very popular in the country. That is by using airtime top-up vouchers. The most common way to do this is to buy an airtime voucher, scratch it in order to get the code and then text the code in an SMS to the person you want to send money to. It is then up to the recipient to go out and sell the code to people who want to buy airtime, or resellers and shops that in turn will sell it to people wanting airtime. The value of the voucher is reduced when selling it the second time, in most cases by about 10% but sometimes it is reduced by up to 40%. M-PESA and Zap are much cheaper and charge about 2-5% of the value sent.

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If you didn’t catch the comparison we did recently of M-PESA in Kenya and Tanzania, you can read about it at www.cgap.org/technology. But in addition to M-PESA, there are several other mobile payment products that have launched in the Tanzanian market over the last year.

Perhaps Vodacom M-PESA’s toughest competition is offered by Zain, the second-largest mobile operator in Tanzania after Vodacom.  Launched simultaneously in Tanzania and Kenya in February 2009, Zain’s new Zap product aims to link micropayments to merchants, thereby circumventing the need to convert money into cash. From Zain’s perspective, there are two ways to approach a mobile payments product. Either an MNO focuses on transfers and remittances or it focuses on micropayments. Zain has chosen the latter approach with the goal of going beyond remittances in offering a service that focuses on small payments made directly to merchants.

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No one who is a regular reader of this blog needs an introduction to M-PESA in Kenya. But some of you may not know that M-PESA launched next door in Tanzania over a year ago. Haven’t heard much about it, have you? That’s probably because unlike the rapid uptake and quick agent network that developed in Kenya, things have moved much slower for Vodacom’s M-PESA product in Tanzania.

We have just posted a web story analyzing the differences between these two implementations. To entice you to read more, here are a few of our observations.

1. Geography and culture: Tanzania is a much more spread out and less densely populated country than Kenya. This may seem trivial until you remember that the density of one’s agent network is a key factor to any m-payments product.

2. Market and competition: Safaricom in Kenya has 79% market share with 12.5 million clients. Vodacom in Tanzania has 41% market share with 5.2 million subscribers. And Zain, Tigo and Zantel are gaining ground every day.

3. Agent networks: It appears that Vodacom has less direct control and influence on its airtime distribution channel than Safaricom. Vodacom works directly with six airtime wholesalers, compared with 300 that Safaricom works with. And as you know from the experience in Kenya, Safaricom’s airtime distribution network was a key element in the rapid development of the M-PESA agent network.

4. Marketing and strategy: Initial Vodacom M-PESA marketing didn’t make the easy “send money home” message that Safaricom was so successful at. As a result, customers were unsure of what the product offered them and if it was really geared at the average Tanzanian.

Read more about this comparison at www.cgap.org/technology.

Brazil’s ACSP Launches Global FICO Consumer Credit Scores
Fair Isaac and Associacao Comercial de Sao Paulo (ACSP), one of the largest credit bureaus in Brazil, have announced ACSP’s launch of Global FICO Score for Brazilian businesses – saying that “the launch of this innovative consumer credit-risk score makes Brazil the first South American nation to access Fair Isaac’s global-standard FICO credit risk scoring technology.”

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