Corporate News
By DAVID HERBLING
In Summary
- Equity says licence would enable customers to transact without their ATM cards, in a manner similar to how M-Pesa subscribers withdraw cash from automated teller machines.
- The new SIM cards will also have Near Field Communication (NFC) technology, which will convert customers’ mobile phone handsets into debit and credit cards that allow ‘tap-and-go’ at shopping points to pay for goods and services.
Equity Bank
customers will only need their phones to withdraw money from automated
teller machines (ATMs) once the lender issues its new SIM cards.
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The lender partnered with telecommunications firm Airtel to
acquire a Mobile Virtual Network Operator (MVNO) licence in April, which
allows it to issue its own SIM cards for offering mobile banking
services.
Chief executive James Mwangi said Wednesday that
the licence would enable customers to transact without their ATM cards,
in a manner similar to how M-Pesa subscribers withdraw cash from
automated teller machines.
“Customers will withdraw money from an ATM machine
without a card. Your phone will be your card,” said Mr Mwangi Wednesday
during release of the bank’s half-year results.
The lender is awaiting the Communications Authority
of Kenya ruling before launching its MVNO service, which will also see
the bank issue paper-thin SIM cards that can be embedded on the back of
ordinary SIM cards for non-Airtel subscribers.
Mobile operator Safaricom
has protested to the regulator over the plans to use the thin SIM,
saying the technology could expose users of its M-Pesa cash transfer and
payments service to financial fraud and intercepted communication.
The new SIM cards will also have Near Field
Communication (NFC) technology, which will convert customers’ mobile
phone handsets into debit and credit cards that allow ‘tap-and-go’ at
shopping points to pay for goods and services.
Equity said that it is in talks with American
Express (AmEx) to certify its NFC-enabled SIM cards as a secure payment
processing tool using globally accepted data security standards.
The Nairobi Securities Exchange-listed bank said
that converting its SIM cards into point of sales as well as debit and
credit cards is expected to halve transaction and operational costs.
Equity Bank has settled on the overlay technology
where the thin SIM is superimposed on the subscribers’ primary SIM card
to offer mobile services such as mobile banking, voice and data.
Mr Mwangi argued that the use of the thin SIM would
give customers without smartphones an opportunity to convert into dual
SIM phones with “near smartphone capabilities” without spending more to
buy high-end devices.
“This will change the mobile banking terrain in this country. This is disruptive,” said Mr Mwangi.
The bank has already supplied the special SIM cards
to its 7,000-strong workforce to test the service that would be later
linked to its 7.8 million customer bank accounts in Kenya.
Equity has also migrated all its office telephone
lines across its 162 branches in Kenya to its own mobile network. This
has been done by keeping the employees’ and branch offices numbers but
adding the prefix 0763.
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