Telkom Kenya raises the bar in mobile banking market

Telkom Kenya on Monday joined the bruising battle for control of mobile money with the launch of a product that will allow users to operate bank accounts in their cell phones – taking on both Safaricom’s M-Pesa service and M-Kesho, the joint initiative of Safaricom and Equity Bank.

The new service, which also has Equity Bank as a partner, deepens the shift by telecoms operators away from the voice market that has been the key revenue earner in favour of data services where it faces stiff challenge from Safaricom’s M-Pesa, Zain’s Zap and Essar Telecom’s Yu Cash.

Telkom’s Orange’s mobile money product dubbed Iko Pesa, allows users to manage their bank accounts from the mobile handsets. It enables consumers to make interbank cash transfers, payment of bills and even application for loans of up to Sh1 million.

Though it uses a similar technological platform as that of its rivals, Orange’s mobile money addresses some of the weakness on its competitors while at the same time incorporating additional features into the product.

Other than transferring money Iko Pesa is an electronic commerce platform that can be operated as an online payment gateway that enables users to book and buy air tickets or pay utility bills among others.

It also comes with a phonebook access technology that allows subscribers to send money to any person whose contacts are on their SIM card thus eliminating the risks of funds being transferred to unintended recipients.

Safaricom last month indicated that it will soon migrate its M-Pesa service to a similar platform whose rollout is expected early next week.

Orange customers can currently use their lines to get the mobile money transfer, but to get the entire range of mobile banking services on offer they either have to swap their current lines for free with new ones that will come with Equity mobile banking software.

Orange’s foray into mobile banking comes at a time when data and value added services have gained importance as key earners of revenue in the telecoms market following the heavy erosion of voice market revenues with the recent cut in tariffs by up to 50 per cent.

Central Bank of Kenya statistics indicates that daily mobile cash transfers have risen to Sh3 billion making it an important player in the economy.

As at August 30 this year, M-Pesa which is the leading money transfer service had 12.6 million customers and 20,000 agents and generated 18.7 per cent of its total revenue from M-pesa/sms and data

Telkom Kenya chief executive officer Mickael Ghossein said the launch of the money transfer service adds on its portfolio the services it will offer to the consumers giving it ability to grow both its market share and revenue base. “I am buoyed by the confidence that comes with Orange Money. It provides customers with a convenient, secure, affordable, easy to use and direct access to their money”, said Mr Ghossein.

“For the first time, Africa will have the first ever electronic money transfer card,” said Mr Ghossein adding that the same product will soon be launched in Uganda and ultimately the whole of East Africa.

With the product, customers who do not have bank accounts will have access to an entire range of services making it possible to carry out day-to-day banking operations and transactions using their mobile phones.

Orange Money also gives the two partners a head-start in the race to capture Kenya’s huge population of the unbanked using simple and convenient solutions.