Belgian company targets banks with satellite-link ATMs

SatADSL chief operating officer Caroline De Vos in Nairobi September 12, 2013. SALATON NJAU 

By CHARLES MWANIKI

In Summary

• SatADSL says it will partner with local Internet firms to act as agents for providing the service to local banks, money transfer service providers and SMEs.

A Belgium-based satellite Internet service provider, SatADSL, is eyeing remote bank ATM connections to win business from lenders and mobile money financial service providers in areas that are not covered by telecommunication networks.

The company, which is already piloting the satellite ATM service in Ghana, Zambia and Cameroon, says it will partner with local Internet firms to act as agents for providing the service to local banks, money transfer service providers and SMEs.

Speaking to the Business Daily on the sidelines of the AITEC banking and mobile money conference in Nairobi yesterday, SatADSL chief operating officer Caroline De Vos said the company is targeting smaller urban centres without bank networks.

These are the areas where expanding the terrestrial Internet or the VSAT Internet would not be financially viable.

“Terrestrial solutions are not really designed to serve ATMs in off-site locations, and this is a big challenge for banks looking to expand out of cities. Our target market are the local ISPs who are then going to re-sell the service to the financial institutions,” said Ms De Vos.

Classic corporate VSAT installations are not cost-effective for serving large networks of small remote sites, while terrestrial mobile services have not been designed for business-critical transactions such as ATMs, added Ms De Vos.

The initial cost of the equipment is about $750 (Sh66,000), while the monthly subscription fee is $100 (Sh8,750) per ATM, she said.

Receivers would be equipped to allow continuous service during rainy weather, which normally affects satellite links, she said.

“The technology will certainly be useful for accessing remote areas, since current connectivity does not reach areas where there is no fibre coverage,” said the Kenya Bankers Association chief executive Habil Olaka. “It will also support to spread agency banking,” he added.

Banks are fighting increased competition from mobile money services offered by telcos, but the satellite-served ATMs could allow the lenders to access areas not served by the mobile networks. The lenders have responded by linking their systems to mobile money platforms, allowing such transactions to be carried out at their ATMs.

Cost and logistics have seen increased deployment of agency banking as a preferred method for reaching the unbanked, especially in rural areas.

A global ATM forecast for Middle East and Africa report (2012-2017) by UK-based strategic research and consulting firm Retail Banking Research projects the number of ATMs in Kenya will grow to 3,500 from the 2,426 machines installed as at May 2013 going by CBK figures.

SatADSL says the average monthly cash withdrawals per ATM in Africa are the highest in the World at 4,000, compared to 2,800 in Europe and 1,600 in the US.