NAIROBI, Aug. 30 (Xinhua) -- China-Kenya financial technology (fintech) collaboration is on the rise as firms seek to harness opportunities unleashed by a significant mobile phone penetration in the east Africa nation.
Kenya is a regional leader in the fintech space having been the birthplace of Safaricom's M-Pesa, a mobile phone money transfer platform while China is also among global leaders in digital financial services.
Most of the fintechs operate as digital mobile wallets and hence owe their success to high mobile penetration rates.
Data from the Communication Authority of Kenya indicates that as of March 31, the number of active registered mobile money subscriptions stood at 29.1 million.
Daniel Mainye, senior manager of fintech, brand and innovation at Nairobi-based Cytonn Investments, said that Kenya's fintech enterprises will benefit by forging closer ties with their Chinese counterparts.
"By enhancing cooperation with the Chinese fintech sector, Kenya will benefit from accessing the latest technology as well as the huge Chinese consumer market," Mainye said.
Several Kenyan financial institutions including Equity and Family Banks have already integrated Chinese fintech platforms such as WeChat pay and Alipay into their digital payment platforms.
According to Mainye, this trend is likely to continue as banks tap into the growing demand for Chinese apps.
He said that a key driver of the Sino-Kenya fintech cooperation is the bilateral trade that has grown exponentially over the past two decades.
Mainye said that financial settlements for trade between Chinese and Kenyan entrepreneurs involve bank transfers which take time to complete.
He said that the use of fintech will permit seamless digital financial transactions between the two regions hence building trust among entrepreneurs.
Mainye said that Chinese e-commerce platforms are already popular among Kenyan consumers, adding that the most convenient way to pay for goods from Chinese online platforms is through the use of Chinese fintech apps which provide real-time payments.
The expanding Sino-Kenya fintech is also signified by the fact that M-Pesa, a mobile money transfer service, is a payment option for the online shopping portal Aliexpress.com.
Mainye said that the Chinese community in Kenya also helped introduce the Chinese fintech to locals.
"The popularity of Wechat Pay and Alipay has now increased among Kenyans especially those who source goods from China," said Mainye.
Kenya's tourism and hospitality has also embraced the Chinese fintechs in order to attract more clients from the Asian nation.
Merchants from the east Africa's largest economy have also discovered that by embedding the Chinese fintechs as a payment option, it will help to break the cultural and language barriers with Chinese clients.
Kenyan fintechs are also keen to collaborate with Chinese fintechs in order to expand their customer base, according to Mainye.
He said that the majority of the Chinese fintechs are global payment platforms and Kenyan fintechs are likely to expand footprint through strategic collaboration.