Why Fuliza will be Safaricom's Achilles heel

M2Random

Village Elder
#1
Safaricom's Fuliza product will be its first public failure. The company will have to abandon it or lose its market dominance.
Fuliza is an Mpesa overdraft product. Nothing more. You withdraw more than you have leaving that account with a negative balance (at a fee of course).
The only reason that Safaricom has remained dominant for so long is because of Mpesa. Mpesa has a wide network and people prefer using one line for everything. That way, by dominating money transfer, it has successfully managed to keep competitors at bay.
  • This Fuliza product will give Mpesa customers a solid reason to use and test money transfer services of competitors. If a mama mboga has an overdraft, and needs to send money urgently to her supplier, she will be locked out of Mpesa. Her next best option will be any other fast money transfer platform, or banks. So inevitably, Safaricom will lose some good Mpesa customers to competition.
  • Safaricom has more to lose than gain from Fuliza. Historically, most Kenyans prefer using their "money transfer" line for all other functions e.g voice, sms, data etc. So, if Safaricom loses Mpesa customers, they inevitably lose on voice, sms, data to competition.
  • I believe that this product appears profitable on the surface but was not well thought out. They should not have tied it to Mpesa. The only reason why people use Tala etc is because they can't collect from their Mpesa accounts. Safaricom will have to approach this business in the same manner as Tala, Branch etc to work. Otherwise, it will lose customers.
I am not a pro in these things, this is my layman's opinion. Interfering with Mpesa is ill-informed. In less than 12 months, Safaricom will realize that mistake and either abolish Fuliza entirely, or delink it from Mpesa
 
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#5
Interesting point on being locked out of mpesa. I didn’t know that was the deal.

Masoko, their cctv program na zingine were all public failures.

Usidanganyike, profits matter more than reputation. They only value reputation if it affects their bottom line.

Don’t you think the astronomical margins on loans will cover the risk when it comes to lending?
 

M2Random

Village Elder
#6
There is some sense in that. Kama sasa angalia majamaa wangapi wamedefault tala, branch and the rest for over an year now
Mjinga wa betting ataprefer kutuma pesa na equitel ama airtel than kulipa deni ya Mpesa ya 5k. Akianza kutumia airtel for money transfer hatahitaji safcom tena for data ama voice. Safcom ipoteze customer in all departments because of a 5k loan.
 

Delus

Village Elder
#7
Safaricom's Fuliza product will be its first public failure. The company will have to abandon it or lose its market dominance.
Fuliza is an Mpesa overdraft product. Nothing more. You withdraw more than you have leaving that account with a negative balance (at a fee of course).
The only reason that Safaricom has remained dominant for so long is because of Mpesa. Mpesa has a wide network and people prefer using one line for everything. That way, by dominating money transfer, it has successfully managed to keep competitors at bay.
  • This Fuliza product will give Mpesa customers a solid reason to use and test money transfer services of competitors. If a mama mboga has an overdraft, and needs to send money urgently to her supplier, she will be locked out of Mpesa. Her next best option will be any other fast money transfer platform, or banks. So inevitably, Safaricom will lose some good Mpesa customers to competition.
  • Safaricom has more to lose than gain from Fuliza. Historically, most Kenyans prefer using their "money transfer" line for all other functions e.g voice, sms, data etc. So, if Safaricom loses Mpesa customers, they inevitably lose on voice, sms, data to competition.
  • I believe that this product appears profitable on the surface but was not well thought out. They should not have tied it to Mpesa. The only reason why people use Tala etc is because they can't collect from their Mpesa accounts. Safaricom will have to approach this business in the same manner as Tala, Branch etc to work. Otherwise, it will lose customers.
I am not a pro in these things, this is my layman's opinion. Interfering with Mpesa is ill-informed. In less than 12 months, Safaricom will realize that mistake and either abolish Fuliza entirely, or delink it from Mpesa
If you base your argument on this then Safaricom could have lost it on Okoa Jahazi.
Fact is they have an advantage because of market dominance. It was based on the idea that a lot of money is lost because people fail to use mpesa inasema transaction failed because of insufficient funds
 

M2Random

Village Elder
#8
Interesting point on being locked out of mpesa. I didn’t know that was the deal.

Masoko, their cctv program na zingine were all public failures.

Usidanganyike, profits matter more than reputation. They only value reputation if it affects their bottom line.

Don’t you think the astronomical margins on loans will cover the risk when it comes to lending?
Not being locked out really, but the money is automatically deducted. That will discourage anyone with an overdraft from using Mpesa if they don't intend to pay at that time but have to send money.
 

M2Random

Village Elder
#9
If you base your argument on this then Safaricom could have lost it on Okoa Jahazi.
Fact is they have an advantage because of market dominance. It was based on the idea that a lot of money is lost because people fail to use mpesa inasema transaction failed because of insufficient funds
They did not lose Okoa Jahazi because customers stick with Safaricom because of Mpesa - not Okoa Jahazi. Okoa Jahazi doesn't touch Mpesa funds.
 

Delus

Village Elder
#10
They did not lose Okoa Jahazi because customers stick with Safaricom because of Mpesa - not Okoa Jahazi. Okoa Jahazi doesn't touch Mpesa funds.
Exactly customers will still stick because of mpesa.
Umewai tafuta Airtel money agent ukakosa? Now imagine if you have an issue on Airtel money
 

M2Random

Village Elder
#11
Exactly customers will still stick because of mpesa.
Umewai tafuta Airtel money agent ukakosa? Now imagine if you have an issue on Airtel money
Customers will quit because the product interferes with Mpesa. Airtel is not the only method of sending money. What about Equitel? There are thousands of Equity agents to withdraw from. Almost as many as Mpesa
 

M2Random

Village Elder
#12
A certain degree of loss is certain in the project but bottom line it will be hugely successful in the long run.
Loss from defaulters is acceptable. In fact, I am certain they factored this in. Loss of customers on most company products is unacceptable. This is inevitable and they did not factor this risk in. Basically, they will lose pounds chasing pennies with this product.
 

M2Random

Village Elder
#14
1. How long did the pilot program take?
2. What was the sample size?
3. Did they conduct a simulation to determine the long-run effects of this product?
4. What assumptions did they make? Did they confuse market domination with monopoly? (This product would work perfectly if safaricom was a monopoly in money transfer, but customers have alternatives and safaricom is not a monopoly).
 
#15
With Fuliza, a customer who’s M-Pesa transaction value is greater than their M-PESA wallet balance, can complete the transaction for an Access fee of 1% of the drawdown amount. Subsequently, a maintenance fee of between Ksh.2- Ksh.30 on the outstanding amount, is then applied each day that the wallet remains overdrawn. Whenever you receive an inflow into your M-PESA wallet, the over drawn position is regularized.

During this period that your M-PESA wallet is overdrawn, one shall still have access to their M-Shwari limit. If however you do not repay your loan within 60 days, your Fuliza limit will be withdrawn and vice versa for M-Shwari if you do not repay Fuliza within this duration.
 

M2Random

Village Elder
#17
With Fuliza, a customer who’s M-Pesa transaction value is greater than their M-PESA wallet balance, can complete the transaction for an Access fee of 1% of the drawdown amount. Subsequently, a maintenance fee of between Ksh.2- Ksh.30 on the outstanding amount, is then applied each day that the wallet remains overdrawn. Whenever you receive an inflow into your M-PESA wallet, the over drawn position is regularized.

During this period that your M-PESA wallet is overdrawn, one shall still have access to their M-Shwari limit. If however you do not repay your loan within 60 days, your Fuliza limit will be withdrawn and vice versa for M-Shwari if you do not repay Fuliza within this duration.
That is what will make clients abandon M-Pesa after overdrawing.
 

sani

Village Elder
#18
for the last one year 80% of safaricom vacancies have been going to big data analysts. safaricom knows u more than u know yourself. once you are hooked to mpesa you got nowhere else to go. mpesa is here to stay, and fuliza will not fail. mkenya si ni yule yule? mwenye tuliambiwa na michael Joseph tuko na tutabia funny? ndo wanaziexploit
 
#19
Safaricom's Fuliza product will be its first public failure. The company will have to abandon it or lose its market dominance.
Fuliza is an Mpesa overdraft product. Nothing more. You withdraw more than you have leaving that account with a negative balance (at a fee of course).
The only reason that Safaricom has remained dominant for so long is because of Mpesa. Mpesa has a wide network and people prefer using one line for everything. That way, by dominating money transfer, it has successfully managed to keep competitors at bay.
  • This Fuliza product will give Mpesa customers a solid reason to use and test money transfer services of competitors. If a mama mboga has an overdraft, and needs to send money urgently to her supplier, she will be locked out of Mpesa. Her next best option will be any other fast money transfer platform, or banks. So inevitably, Safaricom will lose some good Mpesa customers to competition.
  • Safaricom has more to lose than gain from Fuliza. Historically, most Kenyans prefer using their "money transfer" line for all other functions e.g voice, sms, data etc. So, if Safaricom loses Mpesa customers, they inevitably lose on voice, sms, data to competition.
  • I believe that this product appears profitable on the surface but was not well thought out. They should not have tied it to Mpesa. The only reason why people use Tala etc is because they can't collect from their Mpesa accounts. Safaricom will have to approach this business in the same manner as Tala, Branch etc to work. Otherwise, it will lose customers.
I am not a pro in these things, this is my layman's opinion. Interfering with Mpesa is ill-informed. In less than 12 months, Safaricom will realize that mistake and either abolish Fuliza entirely, or delink it from Mpesa
A bit compelling.
 

upepo

Village Elder
#20
Safaricom's Fuliza product will be its first public failure. The company will have to abandon it or lose its market dominance.
Fuliza is an Mpesa overdraft product. Nothing more. You withdraw more than you have leaving that account with a negative balance (at a fee of course).
The only reason that Safaricom has remained dominant for so long is because of Mpesa. Mpesa has a wide network and people prefer using one line for everything. That way, by dominating money transfer, it has successfully managed to keep competitors at bay.
  • This Fuliza product will give Mpesa customers a solid reason to use and test money transfer services of competitors. If a mama mboga has an overdraft, and needs to send money urgently to her supplier, she will be locked out of Mpesa. Her next best option will be any other fast money transfer platform, or banks. So inevitably, Safaricom will lose some good Mpesa customers to competition.
  • Safaricom has more to lose than gain from Fuliza. Historically, most Kenyans prefer using their "money transfer" line for all other functions e.g voice, sms, data etc. So, if Safaricom loses Mpesa customers, they inevitably lose on voice, sms, data to competition.
  • I believe that this product appears profitable on the surface but was not well thought out. They should not have tied it to Mpesa. The only reason why people use Tala etc is because they can't collect from their Mpesa accounts. Safaricom will have to approach this business in the same manner as Tala, Branch etc to work. Otherwise, it will lose customers.
I am not a pro in these things, this is my layman's opinion. Interfering with Mpesa is ill-informed. In less than 12 months, Safaricom will realize that mistake and either abolish Fuliza entirely, or delink it from Mpesa
Fuliza is mostly targeted at people with good cash flows sio watu hohehahe. There will be credit limits to keep peasants at bay.
 
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