For some financial-services giants, the next big thing is micro, and unbanked customers are the entry point. The latest example is MasterCard, which is getting into microcommerce in Kenya with the launch of a new mobile platform that lets consumers buy goods with cash, mobile money, or bank transfer using their phones. The service, called 2Kuze, is aimed at Kenyan farmers and their customers and may mark the beginning of a deeper journey into mobile money products.
MasterCard unveiled the new phone-ready platform yesterday and said it will allow consumers to place orders for produce more directly with farmers. For help, the company synced up with the nonprofit Cafédirect Producers Foundation to connect with 2,000 farmers near Kenya. Spawned out of MasterCard’s Lab for Financial Inclusion, the new venture is backed by the Gates Foundation. While it doesn’t directly compete with existing mobile money networks like M-Pesa, it opens the door for future development in this area.
Certainly plenty of other companies think mobile money is ripe for competition. In September, Visa debuted the mobile payments platform mVisa in Kenya that will rival M-Pesa on price. The credit card company sees an opportunity to not only tap into local commerce and peer-to-peer transactions, but also global remittances—a market of keen interest among a number of fintech players. Companies like TransferWise, Ripple, and PayPal’s Xoom are all fighting to take business away from lethargic giants like Western Union.
One thing’s for sure: There’s money to be made. Last year, M-Pesa logged roughly $51 billion worth of transactions. And there may be a particular opportunity among unbanked citizens. Stellar, a nonprofit organization aimed at facilitating faster, less expensive money transfers, teamed up with the finance software provider Oradian in February to connect microfinance institutions to one another. The partnership enabled these community organizations to transmit money digitally, rather than physically moving cash between destinations—a service sorely needed.
As for MasterCard, it already seems geared up to tackle this particular demographic with 2Kuze. Through it’s pitching the product as effort to increase financial inclusion, it may also be building a loyal following in the process—one primed to use paying products down the road.