Corporate News
Airtel Kenya CEO Adil Youseffi (left) and Equity Bank CEO James Mwangi
at the unveiling of the bank’s Mobile Virtual Network Operator (MVNO)
strategy set for launch in July 2014. Photo/DIANA NGILA
By OKUTTAH MARK, mokuttah@ke.nationmedia.com
In Summary
- Equity Bank says product, to be launched in July, will offer short-term loans and charge users a standard fee.
- Customers will pay a maximum charge of Sh25 to send any amount of money within the network.
- Equity is issuing all its customers free SIM cards to register for the service.
Equity Bank
on Monday gave consumers a peep into its mobile banking platform it
says will disburse loans and offer cash transfer services for the
lender’s eight million customers, posing the biggest competitive threat
yet to Safaricom’s popular M-Pesa service.
Customers will pay a maximum charge of Sh25 to
send any amount of money within the network, compared to the Sh125 fee
the telecoms operators charge users to transfer the maximum Sh70,000
within their network.
Equity’s mobile money service, to be launched in
July under the Mobile Virtual Network Operators (MVNO) licence that the
bank was awarded early this year, will also be integrated to other
banks, offering customers the flexibility of making payments and cash
transfers from their handsets.
“We are specifically targeting the retail payment
system that is still 96 per cent cash. The pie is big and we are looking
beyond the Kenyan borders. Our partnership with Airtel will enable us
to roll out similar products in Uganda and Rwanda where we both have
operations,” said the Equity Bank chief executive James Mwangi during a
briefing on the service.
Equity is issuing all its customers free SIM cards
to register for the service through which the bank also plans to
disburse short-term loans to its customers an interest rate of between
one per cent and two per cent per month, compared to an average market
rate of five per cent.
Card-based lenders charge customers about five per cent per month, while Safaricom’s M-Shwari charges 7.5 per cent per month.
The mobile banking service will run on the NFC
network technology, which will enable customers to pay for goods and
services by simply tapping their handsets at Point of Sales (POS)
terminals.
This is Equity’s latest stab at mobile banking
after a previous partnership with the telecommunication firms through
its M-Kesho product hit the rock.
Mr Mwangi blamed M-Kesho’s failure on Equity’s lack of control of the SIM card, which as a result made it difficult for the bank to control the amount they charge their customers and quality of service.
“Our previous attempts to introduce mobile banking
through partners have failed mainly because of high cost of
transaction. When you have telcos as middle men between you and the
customers this pushes the costs up and that is why M-kesho failed,” said
Mr Mwangi.
“With our own SIM cards we will remove the
middlemen role to reduce the costs, increase the earnings and pass the
benefits to the customer.”
Equity sees a future where its main interface with
the customers will be through mobile banking, effectively building
convergence of financial products and services on the mobile phone.
Equity said the lowest one can borrow is Sh500,
while the maximum amount one can borrow is pegged on their credit score
and history.
On Safaricom’s M-Shwari, a joint product with
Commercial Bank of Africa, customers can deposit as low as Sh1 and
borrow up to Sh100,000 payable with a month
No comments :
Post a Comment