A customer at a Western Union outlet in Nairobi. New players and local
banks are challenging established brands like MoneyGram and Western
Union for the diaspora cash. FILE PHOTO | NATION MEDIA GROUP
By GEORGE OMONDI, omondi@ke.nationmedia.com
In Summary
- Sending hard currency worth billions of shillings to businesses and relatives at home has attracted new players who are determined to deploy smart technology to expand their space.
- KCB Group’s mobile app allows users to pay bills, make bank and M-Pesa transfers worldwide.
- Through its Equity Direct, Equity Bank seeks to control remittances in a partnership with UK’s VFX Financial.
- Other banks eyeing the Sh1.3 trillion remittances haul so far are Family Bank, Ecobank, and mobile phone firms.
SimbaPay, a London-headquartered money transfer firm,
has fenced in Kajiado North farmers as its latest niche in yet another
move set to shake off the tight grip of established players on the money
transfer business.
Under a deal announced at the weekend, Choice Microfinance
Bank account holders will not be charged for transfers by Kenyans living
abroad using the SimbaPay application.
Choice Microfinance, licensed in May by Central
Bank of Kenya (CBK) holds accounts for pastoralist communities, flower
farm workers and SMEs of Kajiado North Constituency.
“Our customers who already bank with Choice
Microfinance Bank or have friends and family using the bank will be glad
to see their transfers being credited instantly,” said SimbaPay head of
operations Victor Karanja in a statement on Monday.
“We are very excited about this new partnership
with SimbaPay which is heavily engaged with the economic force that is
Kenyans living abroad. Kenyans abroad are the country’s largest earner
of foreign exchange today”.
Sending hard currency worth billions of shillings
to businesses and relatives at home has attracted new players who are
determined to deploy smart technology to expand their space.
In June, SimbaPay moved to create a niche in Kenyans abroad with monthly bill to pay when it linked its network to Safaricom’s M-Pesa mobile money transfer platform for quick transaction.
The SimbaPay software, available on Apple and
Android App stores, does not require a Safaricom line or M-Pesa
registration details but allows transactions without charges.
The niche approach by SimbaPay is set to roil the
diaspora money transfer business where established players have taken a
general customer attraction approach.
Over the last two years, the local banks have
joined fray with “strategic partnerships” and major upgrade of their
technology platforms to claw back part of the business from established
international brands like MoneyGram and Western Union.
Nearly all the local banks regard money transfer as
the next growth area after diaspora remittance hit Sh1.3 trillion last
year. Beyond traditional reliance on global SWIFT network and online
infrastructure of Visa and MasterCard, there is a sustained effort to
control the money transfer business.
The KCB Group, has for instance, come up with a mobile app for paying bills, making bank transfers globally and to M-Pesa worldwide.
Shift to niche
“This app will transform the way the diaspora
interacts with people and businesses back home,” KCB head of diaspora
banking Vincent Aberi told Shipping & Logistics in an earlier
statement.
Equity Bank
has an online multicurrency platform dubbed Equity Direct, with which
it aims to control at least 30 per cent of UK-Kenya remittances. The
bank runs the product in partnership with UK firm VFX Financial.
Family Bank has its Daima Mkenya brands which operate
current and mortgage accounts for Kenyans living abroad while Ecobank
has RapidTransfer, which targets intra-Africa cash flows.
The shift to niche market is likely to pay quick
dividends in a crowded segment that has also attracted local non-bank
players like Nation Media Group’s NationHela and mobile phone operators.
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