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SIM Overlay Technology in Kenya.


Currently, Safaricom Ltd. and Equity Bank are both locked in battle, where Safaricom is opining that Equity’s choice of SIM technology is bound to put its mobile money system at risk. This proposition necessitates a look into the technology that Equity intends to use, and the features it is bound to bring to end users.

What is SIM overlay technology?

SIM overlay technology, otherwise known as skin SIM, is a form of SIM technology whereby the user superimposes a paper-thin plastic sheet over their regular SIM. This plastic sheet has contact points embedded into it, and this makes it possible for the user to simulate the features and use of a regular SIM. It was invented by a Chinese Company as a solution towards the need for easy access to most services that are rather expensive and difficult with the regular SIM. These include money transfer, better integration in the realization of mobile banking, and making of international calls, to name but a few.


Safaricom’s Worries.

Safaricom is Kenya’s biggest mobile service provider. This also extends to mobile money services, where it enjoys over 73% market share. Indeed, this has led to it exhibiting some monopolistic tendencies. Other service providers, Yu, Airtel, and Orange, have tried to restructure their strategies with little success, and perhaps it is in light of this that Equity Bank decided to venture into the field, given that it is Kenya’s largest bank especially in terms of its customer base. This, in addition to the endless possibilities of the technology that Equity intends to use, was enough to threaten Safaricom’s hold of the market, hence the current court battles.

It is worth noting that Equity’s SIMs may be NFC enabled, and this just makes the fight more difficult for Safaricom. The possibilities presented with an NFC enabled SIM are truly numerous, especially if the NFC will be laden with Visa and MasterCard capabilities. Additionally, Finserve, Equity’s subsidiary mandated with overseeing the adoption of the technology, posits that the rates of transfer are bound to drop significantly. What’s more, they are going to include international money transfer, clearly edging Safaricom in almost every field. I take that this was apparently too much for Safaricom to take, and they countered by suing on the basis that the increased capabilities of the SIM overlay technology similarly increases the risks to be faced. Perhaps they are right, and currently there is an ongoing insight into the safety features of the superimposition technology.

What next?

Most consumers have long been waiting for some form of competition towards Safaricom’s dominance. Perhaps this is the chance, or Safaricom could be right and Equity’s technology may be full of flaws. Technically, this is very unlikely since a lot of tests have to be carried out before such a technology can be rolled out for the general public to use. All in all, consumers don’t stand to lose, in any case, the entry of many players in any field only increases quality of services, at a competitive price.

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Am an ardent lover of technology, and my dream is to experience at least every gadget that the world has to offer. I believe in simplicity.
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