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Google Launches Mobile Micropayments in Africa

BY Jessica McKenzie | Tuesday, April 30 2013

A Nairobi matatu (bus) (Wikipedia)

Google just announced the launch of rebranded electronic payment system BebaPay in Kenya, home to the popular and successful mobile money system M-Pesa. With the BebaPay card, Google tackles the notoriously chaotic bus system in Kenya. The BebaPay card standardizes fares and provides riders with receipts, protecting them from unscrupulous conductors charging hiked up fares or not providing change. And it costs consumers next to nothing: the card is free and there are no transaction fees, although cell phone operators can charge to transfer money to the card. With all those perks, many are asking, “What’s the catch?”

Internet commentators are also divided on whether M-Pesa needs protection from big, bad Google, or if M-Pesa’s near-monopoly can use some healthy competition.

Google first “quietly” tested their beba card in May 2012. They could be obtained – for free – from beba agents. Users need a gmail account to activate and load a card with money. This year they teamed up with Equity Bank, the Kenyan bank with the largest customer base, and rebranded the card as BebaPay. The card uses Near Field Communication (NFC) technology, which means payment can take place offline even when there is no power or network connectivity.

Bloggers who have tried the BebaPay card have reported bus conductors who refuse to take the card or, at the very least, appear very unhappy about it.

On their Africa blog, Google has already announced that they will roll out BebaPay beyond the transportation system, and into shops and small businesses. The free BebaPay app will turn any NFC-enabled Android phone into a card reader. Google also plans to take BebaPay to other African countries. This sets BebaPay up to be a real competitor with M-Pesa.

An article in The Economist cites critics who complain about Google’s digital colonization of Africa: “[they] complain that Google is buying up enormous amounts of virgin digital land in Africa at virtually no cost.” And if BebaPay becomes ubiquitous, through the required gmail account Google will gain access to a wealth of data on Kenyan consumers. Others worry that Google will nudge out locally developed companies and products, like M-Pesa. However, there has already been some speculation that M-Pesa has gotten too big for its own good. Some have even compared it to Google: “Safaricom’s success with its service, says Maurer, has made it a little like Facebook (FB), or Google (GOOG) – a for-profit company that has become a kind of utility. The more ubiquitous it becomes, the more useful it is. And the more temptation it might feel to abuse its power.”

So, it’s not that M-Pesa has done anything wrong yet, but perhaps Google’s BebaPay is just the kind of competition Africa needs to keep its mobile money providers honest and accountable.

Personal Democracy Media is grateful to the Omidyar Network for its generous support of techPresident's WeGov section.