The Central Bank of Kenya (CBK) now seeks powers to regulate the fastest-growing Super Applications, better known as Super Apps due to hefty transactions they are handling on daily basis.
In Kenya, Safaricom launched its M-Pesa Super App in June 2021.
Other popular Super Apps recognised globally are WeChat and Alipay in China, which bundle together online messaging, social media, e-commerce, payments, and logistic services.
Kenya’s M-Pesa has seen an exponential uptake in twelve months to June this year with more than five million downloads.
The App currently houses platforms such as banks, insurance sectors, booking services including air tickets and now the recently launched virtual visa card dubbed GlobalPay.
The M-Pesa GlobalPay Visa Virtual Card will gradually be available across other M-Pesa markets through the M-Pesa Super App under a strategic partnership between M-Pesa Africa and Visa. These include Tanzania, the Democratic Republic of Congo, Mozambique, Lesotho and Ghana.
This means the App can handle hefty transactions in a day in what the CBK says are becoming a major disruptor in the digital financial services ecosystem and must be regulated.
“The regulatory framework will need to be agile to regulate super-apps offering e-commerce, loans, insurance products, investing platforms, etc. within the same platform,” added CBK.
A Super-App constitutes several “mini applications” that provide tailored services, using one integrated interface or platform.
They allow users to access applications for pay, commerce, mobility, entertainment, and communication from one platform, instead of through multiple apps.
“Super apps are being driven by the penetration of smartphones and changing consumer preferences for bundled services,” according to CBK.
According to an audit firm KPMG, Super Apps are proving to be a threat to the banking sector, which must heed to the development.
KPMG lists three factors that banks should be worried about amidst the awakening wave of Super Apps;
That they are disintermediating banks from their customers, they are using their vast wealth of data to deliver better services and are also building their brand reputations in financial services.
“While the rise of super apps in the East may seem like a fairly peripheral trend to the banking sector, the reality is they have the potential to up-end it,” says KPMG.
M-Pesa Super App has redefined how the global front views Kenya’s mobile banking, enabling timely transactions in 200 countries.
It is currently the largest revenue contributor to the parent company, Safaricom, having hit a Ksh.100 billion mark for the year ended December 31, 2021.
M-Pesa revenues surged by 38.3 percent to Ksh.107.7 billion from Ksh.86.2 billion in 2020.