Tuesday 30 September 2014
Tuesday 23 September 2014
EcoCash’s Global Manoeuvres: It’s a Alliances Game
It is now clearer that
EcoCash, a mobile phone based banking service provider headquartered in
Zimbabwe is trying to enter the global payment system. And it is looking at the
most cost effective method of doing just that. EcoCash is one of the few mobile
money sprinters in the league of MPESA curved out of Econet Wireless a mobile
network operator based in Zimbabwe.
The mobile phone bank
operator has tried several attempts to enter the global payment system. It has
integrated its mobile banking platform with the roaming service to enable its
customers to travel with their mobile wallet (m-wallet). One weakness of that
move has been the need for a physical agent to cash in/out the m-wallet. In
order to circumvent this problem, the mobile money service provider partnered with
WesternUnion to have a global presence in more than 200 countries saved by
WesternUnion. However, this channel did not fully solve the problem as
challenges of inconvenience remained. WesternUnion operates in scheduled
offices and its office distribution is sparsed to meet the demands of a
sophisticated mobile money client.
The recent moves to partner
MasterCard are a clear testimony of the mobile money operator’s spirited intentions
to become an emerging global contender through innovation on its payment
system. One can be pardoned for observing this integration of a-payment-system-on-a-payment-system
as a sign of failure by mobile money to handle transactions at the
point-of-sale and cross-country mobility. EcoCash has, however, countered that downside
of mobile money through the introduction of the MasterCard debit card linked to
its mobile money platform to effectively handle point-of-sale transactions and
global mobility.
EcoCash continues to
innovate around its mobile money platform with a vision to reach the global
market. It may be a matter of time to determine which between MPESA and EcoCash
will lead as a global contender. MPESA looks comfortable in its Kenyan backyard
where it has registered enormous success while EcoCash has looked for markets
beyond the small market of Zimbabwe. This could be born out of the parent
company’s strategy of following emigrated Zimbabweans at a lower cost than
direct investment and having to go through the usual bureaucratic rituals of
foreign direct investment.
What remains unclear about
EcoCash’s payment ecosystem strategy of m-wallet on roaming, WesternUnion and
MasterCard is how they will complement each other to capture the global market beyond
emigrated Zimbabweans. What is however obtrusively clear is its grand vision to
contend in the global payment system and build a global mobile money based
payment system.
This alliance can work very
well for creative Zimbabweans where a student studying in Australia, for
example, keeps the MasterCard debit card while the family keeps the mobile
phone linked to the debit card to replenish the card with financial support.
One intriguing observation is how the forgoing scenario makes the global
payment instantaneous. The real danger for EcoCash is the scalability of the
system to attract non-Zimbabwean customers. Without that, EcoCash’s global
manoeuvre is foiled, waiting for an operator from the big market like Nigeria
or having a footprint across Africa to seize.
The learning points from
EcoCash’s strategy clearly shows that it is cheaper and easy to reach new
market frontiers by integrating the mobile banking system with traditional
banking systems. Over and above that, mobile money operators should continue to
explore ways of reducing the current cumbersomeness of paying with mobile
wallet where one has to queue to cashout into hard cash and then queue to pay at
the point-of-sale.
Last Mazambani
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