Digital commerce has greatly evolved over the last couple of years. Today, it ranks as a very lucrative sector; hence, it comes as no surprise that Visa wants a piece of the pie. The financial service corporation has introduced mVisa, a mobile payment service that operates pretty much like M-Pesa. Safaricom’s M-Pesa has dominated the wireless payment sector since its launch but its monopoly status is under threat. Visa has partnered with four local banks: Co-operative, Family, KCB and NIC banks to facilitate transactions for customers who have accounts with the institutions.
With this service, users can pay for goods or services as well as send money to people anytime. This is achieved through scanning a Quick Response (QR) code on their smartphone or by keying in the mobile number of the merchant. The QR code provides customers with bank details of the merchant. Is that all? Well, No. mVisa also supports local remittances as well as access to funds if there is no ATM in the vicinity. The service also has the advantage of global acceptance meaning that customers can make payments locally and internationally.
The money is directly transferred from the customer’s bank into the merchant’s account. Both parties then receive real time notifications to confirm the transaction. Customers have complete control of the payment process and they reserve the right to initiate any payment. After its launch, M-Pesa service received mass acceptance resulting in big losses for local banks. Banks had initially embraced this service but they soon developed their own mobile banking platforms. Nevertheless, M-Pesa remains a leading mobile financial platform.
As at now, over 1,500 merchants have signed up and it is projected that this number will rise and that more banks will forge partnership with Visa. The service has been rolled out in India with seven banks on board and 30,000 merchants. Plans for expansion are underway as it is set to launch in other African countries.
It will be interesting to see how mVisa will change the mobile payment services landscape. Additionally, we need to anticipate developments that may be impelled following Visa’s entry into a market that has been M-Pesa’s playground.