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M-PESA has shown mobile phone operators that there is massive money in mobile payments as an alternative to retail banking and other banking transactions in Africa. Loy Okezie has looked at the Nigerian mobile payment space and noted its heating up with several licenses granted to operators by the Central Bank of Nigeria (CBN).

He's compiled a list of 7 mobile payment solutions for Nigeria to watch in 2011.

1. MyPesa
2. Paga
3. M-Teller
4. M-NAIRA
5. VTN
6. M-Wallet
7. Monitise

Here's his comments on the one I find most promising:

M-Teller

M-Teller is eTranzact’s solution to mobile money in Nigeria. M-Teller is built to be network independent and bank independent, which means that you don’t have to be subscribed to a specific mobile network or have an account at a specific bank to use the service.

With eTranzact’s M-Teller, agents can open new accounts for customers, using the mobile application on their phones. Upon registration, an eTranzact Genesis Card will be issued to all customers.

eTranzact already claims over 50,000 agents across Nigeria where users can register and transact.

He and Afrinnovator point out (and I agree) that, “part of the reason why Safaricom has a strong following on M-PESA…is the fact that they managed to quickly roll out a strong agent network covering the entire country.”

This is the bombshell that Erik Hersman tweeted about Safaricom's mPayment system, M-Pesa. Read it and then stop to think a minute about what that means for Kenya:

If one company moves 20% of country's GDP, and that company is not even a bank, just want does that tell you about the rise of mobile phone operators in Africa? Here are three thoughts that leap out at me:

1. For the first time, telecommunications companies are now "too big to fail" - they are such a force in a country's economy, they are now of strategic interest to national governments.
2. With such success, mPayment innovation will be severely curtailed in other countries. Banks will demand to lead mobile payment processes - they'll not loose that much business again
3. mPayments are now a business requirement, too many potential customers use it for a company to ignore it as payment option.

But don't think that Safaricom is resting on its laurels even though it owns the mPayment space in Kenya. They're now launching M-Kesho, which enables M-Pesa customers to perform basic banking transactions like deposit and transfer savings via their handsets

With innovations like this, 20% of Kenya's GDP may even be a conservative estimate.

Have you wondered how microfinance institutions (MFI's) could leverage short message services (SMS) text messages to provide most cost-effective loans to their customers? Ben Lyons of FrontlineSMS:Credit has, and he's come up with an intriguing solutions: middleware between mPayment systems like m-Pesa and Zap and MFI management information systems like MiFos and Octopus.

FronlineSMS:Credit Solution

Right now, MFI clients and loan officers send in loan repayments via mPayment services, which notify the MFI via SMS text messages. That's great if you only have a few clients, but successful MFI's soon run into a scaling problem - there are only so many mPayments that MFI staff can transcribe from mobile phone to MFI accounting system at one time before being overwhelmed.

So FrontlineSMS:Credit sits between the mPayment system and the MFI accounting system, quickly converting the SMS's from the mPayment system into accurate client loans and repayments in the MFI management information system (MIS). It can also serve as a conduit between client/loan officer and MFI, quickly responding with loan balance and repayment progress.

Here is Ben Lyons describing the FrontlineSMS:Creidt process at Inveneo's mission*social offices:

Find out more about FrontlineSMS:Credit on their website or on Twitter.

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In my interview with Rachel Essendi, founder of the eCommerce marketplace, Rachel's Bargain Corner, she mentioned an interesting advantage that she felt differenced her site in Kenya.

None of the other shopping sites have an automated payment engine that integrates Zap and M-PESA. Our payment engine has set us apart from all the other shopping sites in the country.

This move towards mobile payment systems for web-based eCommerce sites is quite recent - previously they were all credit card driven. Which lead me to ask Rachel more questions, specifically around mobile payments. Her conclusion: both Zap and M-PESA give shoppers comfort and convenience unmatched by credit cards.

A new way to pay - online!

You take Zap and M-PESA, but not credit cards or Paypal. Why?

Rachel: This is a deliberate move and we have had some local publishers ask us the same question. Credit cards in Kenya are a preserve of the rich and we reckoned that this would turn off many Kenyans who don't have the same and usually associate the same with the rich.

Our target market is the majority of Kenyans and with the popularity of Zap and M-PESA in the country we wanted and continue to provide a solution that is relevant and one which the local market can identify with its all about our market.

Was it hard to get M-PESA or Zap? Do you feel they are enabling your site's growth?

M-PESA and Zap are the most popular money transfer modes in the country, this is because of their availability and ease of use, we are just riding on this technology that the mobile phone operators launched. What we did was to integrate the same into our web site. Most people identify with M-PESA and Zap and when they come to our site and see that we are supporting the same they find it easier to transact on our site.

Both Zap and M-PESA has enabled us to have our checkout system, without an efficient money transfer system we would not be able to offer a complete online shopping experience. The fees they charge are reasonable with Zap charges being lower than M-PESA, but the latter has more people on it.

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