The recent news that Google is partnering with Citigroup and the Stanford University Credit Union to launch Cache, a mobile payments service could be a game-changer for the financial technology sector. The service will offer smart checking accounts through Google Pay. Cache is expected to be launched as early as next year. It is the latest deal from Silicon Valley in recent months as tech giants venture further into personal payment services. Before Google’s pronouncement, Facebook had announced the rollout of Facebook Pay in the US market. The social media giant said the service will provide users with convenient, secure and consistent payment experience across Facebook, Messenger, Instagram and WhatsApp. “People already use payments across our apps to shop, donate to cause and send money to each other,” said the company in a statement. “Facebook Pay will make these transactions easier while continuing to ensure your payment information is secure and protected.” For the past decade, tech giants including Facebook, Google, Apple and Amazon have made billions of dollars from consolidating the data of users on their platforms. The companies are now venturing into finance. While it is unclear when these services will be launched in the African markets, the continent’s demographics of youthful mobile-first population means it is just a matter of time. Kenya has one of the highest smartphone adoption rates in Africa and its multi-billion mobile money economy makes it a prime candidate for disruption. This comes at a time when commercial banks and the region’s most profitable company, Safaricom continue to reap billions of shillings in revenue from mobile payments. For banks, according to Equity Group’s financial report for the third quarter of 2019, the company recorded Sh9.1 billion in transactions on its EazzyPay mobile service in the first nine months of the year. The bank said 93 per cent of transactions are conducted on mobile with Group CEO James Mwangi stating the lender is focusing more keenly in digital payments. “Our non-funded income now stands at 41 per cent of the company’s gross income and we expect it to cross the 50 per cent mark soon and we see a lot o this coming from digital payments,” said Mwangi. “For example in diaspora remittances alone Equity accounted for Sh101 billion of the Sh200 billion transacted last year,” he said. Similarly, KCB Group’s six per cent growth in after-tax profits was in large part on […]
