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.
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.
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