Wave, a payments platform in Senegal, is in a price war with incumbent platform Orange Money. Wave offers a 1% fee on money transfers, while Orange Money has dropped its rates from 5% to 0.8%.

Why should we care?
Competition between Wave and Orange Money can be a roadmap for—and potentially a warning to—other up-and-coming payments platforms and the VCs supporting them. Wave received $200 million in Series A funding last year, with backing from Sequoia Heritage, Stripe, and Y Combinator’s Sam Altman. Wave and Orange Money both depend on agents to function as mobile money operators; flush with VC cash, Wave long offered bonuses to its agents in an effort to compete with Orange Money, but those bonuses have since disappeared. Disillusioned with Wave, its operators went on strike earlier this summer, and many have turned to other work since then. If Wave can sustain its upper hand against Orange Money, then such an outcome may encourage similar payments platforms in other economies to copy Wave’s temporary-incentive strategy, assuming that aggressive (and sometimes exploitative) network strategies can work in the long run. But, if Orange Money wins out over Wave—potentially increasing money transfer rates to provide better terms to its agents—VCs may be more reluctant to pour funds into challenger payments platforms, seeing the established network effects of providers like Orange Money as an insurmountable obstacle.