Mobile money turns Kenya into global transfers hub

Obopay helps wireless carriers deliver a robust mobile payments platform easier, faster, and at less-cost than they could build and operate themselves, helping them streamline and manage complex financial services regulations. Obopay partners with wireless providers to deliver a mobile payment infrastructure to deliver additional services more cheaply and in a shorter period.

Carriers can then focus on increasing ARPU and customer loyalty and monetize, maintain and extend their customer base.

Obopay has also indicated that it will be partnering with Kenya’s fourth mobile service provider Essar, to release YuCash, which was announced for launch in the dying weeks of 2009. Although the company announced last December that it intended to launch the product in early January, it is yet to commercially begin services and Yu agents Business Daily spoke to said they were unaware of it.

“Obopay will provide the mobile money transfer platform from which yuCash will operate, while Equity Bank, being one of the leading banks in Kenya, is our banking partner hosting the trust account. We are rolling out a countrywide network of agents and anticipate to have more than 3,000 agents countrywide who are able to serve subscribers in the initial period, and this will keep growing with the market demand,” said Kunal Ramteke, Chief Commercial Officer of Essar Kenya. Srinivasha Iyengar, Essar CEO told Business Daily in a previous interview that the product was being positioned to capture a share of the youth market and the company was deliberately pricing it well below M-pesa’s transaction fees to capture a younger but less monied customer.

Mr Iyengar also indicated his firm was keen to roll out the service in new markets such as Uganda and Congo, where Essar recently announced stakes in Warid Telecom.

For Safaricom’s arch rival Zain, the changing mobile money landscape has forced the firm to rethink the strategy governing Zap, the only contender within the mobile market for subscriber attentions in the Kenyan money transfer market.

Zain last week extended its mobile money transfer product Zap to three more African countries —Malawi, Niger and Sierra Leone — bringing to seven the number of African countries the service is already in use after Kenya, Uganda, Tanzania and Ghana.

In all markets where it has launched Zap, the company is facing increasing challenges in maintaining profits as competition drives tariffs downwards and shrinks profit margins.

Like Safaricom, Zain is positioning Zap as a ‘stickiness’ product used to retain subscribers on its network by building stronger ties to the network.

Rounding out the list of M-Pesa competitors is mobile operator MTN, Africa’s biggest mobile operator by subscribers which is banking $9.7 million on mobile money solutions.

The mobile firm has signed a deal with Fundamo, a South Africa-based mobile banking and payment solutions group to provide mobile banking facilities.

Already commercially active in Uganda and Ghana, MTN’s Mobile Money begun trials in October 2008 in Uganda, Cameroon, Ghana, Cote d’Ivoire and Nigeria. Five additional pilots were recently launched in Benin, Congo Brazzaville, Guinea Bissau, Guinea Conakry and Liberia. In each market, MTN will partner with local banks to ensure that its MMT services are fully compliant with financial services regulations. Discussions are currently on-going with relevant authorities in various countries to ensure that all regulatory requirements are met.