Before we get into Libra vs M-Pesa, we have to acknowledge that the world of tech is growing and not just that, but growing fast.
If you have no idea what we are talking about, we already have foldable smartphones in production and others already sold. Yes, you may argue that the incredibly fast technological advancements are not being majorly felt in third-world countries especially when we talk about African economies.
But if you were tech-savvy enough to acknowledge that a country like Kenya is on the way to the future in terms of tech, then maybe you can continue reading this article. We’ve crossed seas in terms of network coverage being among the countries with the fastest internet speeds.
To access that big resource called the internet, millions of citizens can now own devices of their choice. How many people have you bumped into on the street busy on their smartphone screens?
And when we talk of the impressive network coverage, the giant telecom company, Safaricom came up with what we may simply call the gem of Africa – a money transfer network that you can simply use to wirelessly conduct everyday transactions.
The network has over the last decade or so earned so much approval even from other economies to the point of it being referred to as a digital currency at some point. And if you actually thought about it, it kinda feels that way.
I mean it almost now seems like all you have to do is add the word “Pay” to your company’s original name.
Going cashless has been an initiative that’s still on the move in many developed countries with major tech giants now initiating their own money transfer networks. Talk of Google Pay, Apple Pay, Amazon Pay. I mean it almost now seems like all you have to do is add the word “Pay” to your company’s original name.
But speaking of the financial tech advancements, the word that even world leaders dread comes up, cryptocurrency.
This digital asset designed to work as a medium of exchange goes just beyond transacting. The asset is set to ease money transfer as well as free the public from the normal global financial system as we know it.
And with the likes of bitcoin, litecoin taking over the world and disrupting the system, Zuckerberg as it seems had plans of his own all along. And that’s when we had the announcement of Facebook’s biggest project dubbed Libra.
To impress as many as possible, the giant social network obviously revealed every bit of its plans. This was from the Libra Association members to its wallet called Calibra. But what might have thrown a couple of people off was the initial problem statement that clearly describes the currency as the company’s means to free people from the oppressive global financial system.
All over the world, people with less money pay more for financial services. Hard-earned income is eroded by
fees, from remittances and wire costs to overdraft and ATM charges.
For that, Facebook did come up with the promise of having a totally free network.
This means all transactions conducted through all of the company’s apps will be free. Now, this is what got people excited. Nobody hates free stuff. And immediately we had to dive in and see whether our very own money transfer service, M-Pesa should get worried about the potential numbers Libra gathers after the global launch.
But after months of drama, speculation and outright opposition against Facebook’s ongoing product, maybe we should stand back and look at the bigger picture.
Almost immediately after Libra’s announcement, government officials from the U.S. and various countries in Europe rose up against it and not just out of spite. The common reason form these parties was that a company that has been caught pants down and ruined its reputation when it comes to data privacy cannot then be entrusted with people’s “hard-earned” money.
And as enthusiasts and users of digital currencies rose up in defence of Facebook’s currency, the argument kept getting more complex. Probes have been summoned to be done on the currency during development. France and Germany stood up loud and tall denying any operations of Libra in their economies.
Other officials went to global stages with pretty impressive reasoning about why everyone should stop referring to Libra as a cryptocurrency. If that’s not enough, Facebook’s representatives were summoned for questioning by various central banks over the project. But even after that, it wasn’t enough to convince all of them to jump in.
But let’s not forget the huge support that Libra has already garnered over the few months from the Libra Association as well as world-leading traditional currencies like the U.S. dollar.
But when we come back home, is that still enough to convince folks to use it?
Libra vs M-PESA
Safaricom’s own product has dug deep into the Kenyan economy bragging of about 26.9 million active users. Moreover, the service is used beyond apps spreading even to those who cannot afford the smartphones and are forced to just use feature phones. So, how will Libra compete with that?
In a past interview with CNN’s Richard Quest, acting CEO Michael Joseph did express how tedious getting the nation to accept the network was over the years. And as much as it eventually works, how many would accept Facebook’s new Libra service?
And let’s say Kenyans were that tech-savvy, would you still accept to entrust your money to the company that still can’t be trusted with your private data.
After all, Facebook has a lot to worry about in trying to convince the U.S. and Europe to finally accept the currency. I do not think they will get the time to immediately start an aggressive marketing plan in Kenya leave alone the whole of Africa.
So should Safaricom (and M-Pesa) worry about Libra? Most probably not.
The company has its roots planted strong enough that a new idea from a company with a damaged image shouldn’t be their main concern. What should be though, is getting the transaction charges down.