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At the same time... Vodafone doesn't have any banking regulations like deposit insurance does it? That seems like a big deal to me. What happens if Vodafone goes out of business? What happens if they decide to just keep the money and shut down the service?

These are low likelihood events, but then, so was the financial collapse of 2008.



The financial collapse was caused by highly-leveraged banks relying on complex opaque models to "manage" risk while making loans and purchasing financial assets.

Since neither Vodafone nor Safaricom are engaging in lending, borrowing or betting on assets those risks don't exist. It is more akin to pre-paid credit cards than traditional banking.


I don't think you can know what Vodafone does with money in it's care.



If they were doing those sorts of things, they'd presumably be regulated as a bank in Kenya.


Like most start-ups the established players underestimated the capacity of the new kid on the block to eat their lunch[1].

By the time banks ganged together to lobby against the service it was too late [2].

[1] http://www.moneyweb.co.za/mw/view/mw/en/page292681?oid=55103...

[2]http://kenyaaudit.blogspot.com/2008/12/banks-now-gang-to-fin...


The point is more likely to be transactions than savings


If it ends up being big enough for long enough, then people will start storing value in it due to convenience.




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