SimbaPay woos niche market in scramble for diaspora cash
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
What you need to know:
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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