Safaricom head hunts Equity chief in battle for mobile cash

Safaricom has hired former Equity Bank Group director of payments Ronald Webb to head its M-Pesa unit, stepping up the mobile money rivalry between the two companies.

Mr Webb has been instrumental in driving the growth of Equity Bank’s mobile money payments platform, Equitel, which he has headed for the past one year.

His appointment as director of financial services at Safaricom effective August 1 saw him take over from Betty Mwangi, who left the company in March.

Prior to joining Equity bank Mr Webb was co-founder and chief architect of the Paynet and PesaPoint payment platforms in Zimbabwe and Kenya. He has more than 30 years of experience in payments technology in Africa as a technologist, senior executive, board member, entrepreneur and consultant.

Credited with innovating new payment solutions, he will now be expected to come up with strategies that could put M-Pesa ahead of its former employer’s product.

The competition for a share of the mobile money transfer business intensified in July last year with the entry of Equitel, which now has two million active subscribers.

The competition between Equitel and M-Pesa is expected to intensify with the scramble for customers outside Kenyan borders under way.

Last year Safaricom focused on taking M-Pesa to neighbouring countries, signing deals with Tanzania’s Vodacom, MTN Rwanda and MTN Uganda to facilitate cross-border mobile money transfers.

READ: Equity processing 74pc of loans via Equitel

READ: Safaricom hits banks with new M-Pesa transfer fees

Equity Group chief executive officer James Mwangi told the Paris-based special report publisher Marcopolis last month that Equity, through Finserve Africa — the group’s mobile virtual network operator (MVNO) — was partnering with telecoms in Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo to launch Equitel in these markets.

Locally, Safaricom’s M-Pesa is still the leading mobile money provider.

Its customer base has grown by more than a third in the past four years to slightly over 20 million customers from 14.9 million in 2012.

M-Pesa, which started as a person-to-person cash transfer service, has been developed to offer a wide array of solutions, including payments and credit.

Charges retailers

Some of the key M-Pesa developments under the stewardship of Ms Mwangi include the June 2013 launch of Lipa na M-Pesa followed by Lipa Kodi for rent collection in August — as Safaricom fought for a piece of the lucrative retail payments.

Safaricom charges retailers a one per cent transaction processing fee on the Lipa Na M-Pesa service, which is cheaper compared to the average three per cent levy banks charge merchants to use their points of sale (PoS) terminals.

In recent years Safaricom has invested heavily in building the new M-pesa infrastructure that has resulted in a higher processing capacity, enabling its clients to settle post-paid electricity bills, insurance premiums and bank payments in real-time.  The telecoms operator also relocated the M-Pesa servers from Germany to cut service downtimes.

Equitel combines both banking and telecoms services, including voice, data and SMS on a single SIM card.

Mobile commerce

By last December the bank had issued over 1.7 million Equitel SIM cards of which 90 per cent are actively being used for mobile banking, it said.

As at end of the first quarter of 2016 Equitel customers transacted Sh62.5 billion on the platform while the value of mobile loans stood at Sh14.1 billion over the same period.

Equitel users through the “Eazzy Loan” product can borrow up to Sh3 million repayable over a 12-month period. Communications Authority of Kenya (CA) data indicates that Kenya has a total of 24.8 mobile money users who transact across five platforms — M-Pesa, MobiKash, Airtel Money, Orange Money and Tangaza — backed by a network of more than 147,761 agents in the period under review.

M-Pesa leads in the number of agents (over 100,000) followed by Orange Money (17,179), Mobikash (16,681), Airtel Money (11,561) and Tangaza (1,596).

During the same period the volume of transactions (deposits and withdrawals) on M-Pesa was registered at 348.8 million, with Sh840.3 billion transferred among users.

Mobile commerce recorded 190.3 million transactions that saw Sh312 billion used to pay for goods and services.

The person-to-person transfers stood at 396.7 billion as at the end of the quarter under review.