WeChat And Alipay Will Grow in Kenya
I have predicted that the arrival of Alipay and WeChat would give MPESA a real challenge. Yes, while MPESA is dominant and ubiquitous, and clearly the operating system of Kenya's consumer financial system, there is something that is brooding in that east African nation: China now holds 70% of all Kenyan foreign debts.
From New York City where AliPay has been implemented (to support Chinese tourists) to Kenya, there are many elements to the New Silk Road. In Kenya, the Chinese expatriates like Alipay and WeChat, and to meet their needs, Kenya needs to have those two solutions which continue to track wherever Chinese go. In a partnership between Equitel and Red Dot Payments, Alipay and WeChat would be available in Kenya.
That one country holds the total foreign debt of a nation, in excess of 70%, is certainly unbalanced. I expect this to have influence in the financial system in Kenya, over time, even if in the short-term nothing seems to be different.
China is now by far Kenya’s largest lender accounting for 72% of bilateral debt by the end of March, according to documents from the Treasury obtained by Kenya’s Business Daily newspaper.
As China invests, more of its companies will have presence in Kenya. There is nothing wrong with that. The implication, though, is that these firms would need support on WeChat and Alipay. That need will drive the adoption of WeChat and Alipay as more Kenyan merchants integrate to serve those who are spending big in Kenya. A hotel would not like to miss a WeChat user who is coming to spend 3 months but has no MPESA!
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Provided the money flows from Beijing, merchants would help the penetration of WeChat/Alipay as they adapt to support Chinese who are coming to work in Kenya. Add the fact that WeChat does more than payment, you will see the long-term threat.
MPESA is telco-driven, WeChat/Alipay is "merchant-driven" as merchants do all to have the capabilities to support customers with money to spend.
Kenya is now in a sort of quandary with its debt exposure to China, and the Chinese aren't in the business of giving you anything for free.
Well, with the money coming from China, and Chinese nationals all of over the land, who says they aren't going to move with their Wechat and Alipay, just like a buddy? It's inevitable, and with deep pockets, anything is possible.
Time will tell how fast or slow the revolution happens.