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Equity steps up competition with cheaper transfer service

JM

Equity chief executive James Mwangi (left) and Airtel Africa CEO Christian de Faria during the launch of the Equitel mobile money transfer and banking platform in Nairobi on July 20, 2015. PHOTO | SALATON NJAU

Equity Bank has stepped up competition for mobile money customers by making it free for its subscribers to send money to Airtel subscribers and within its network while capping fees charged on transfers to other banks at Sh200.

Users of the new Equitel service will send any amount of money to customers within the bank and up to Sh1 million from their mobile phones to other banks, a significantly higher sum than the current maximum transfer of Sh140,000 per day on Safaricom’s M-Pesa, which must be done in two instalments.

Equitel is Equity Bank’s new telecommunications service that will ride on the un-used spectrum of Airtel Kenya, Safaricom’s closest competitor.

Customers sending money to rival banks will be charged graduated amounts starting from a low of Sh0.75 for the smallest transfer of Sh50.

Customers will pay a flat fee of Sh100 for withdrawal of cash over the bank counter or Sh25 if one opts to use its ATM.

The Equitel service is a head-to-head competitor of M-Pesa, a popular cash transfer platform offered by Safaricom and which has been a key pull for customers on the telecommunications giant network.

“People need to learn to compete on products, prices, services and attitude towards people,” said Equity Bank’s chief executive James Mwangi during Monday’s launch.

The management said it had signed up one million subscribers during the pilot stage which saw it close the 0763 prefix and move on to 0764.

Safaricom charges transfer fees of between one shilling and Sh110 for transactions within its network and between Sh44 and Sh303 for unregistered users. The transfer to unregistered users, which includes subscribers on rival networks, is capped at Sh35,000.

READ: Equity's free cash transfers to stir mobile wars

M-Pesa withdrawal fees are also graduated based on the size of the transaction, with withdrawal below Sh50 being free while those exceeding Sh50,000 are charged Sh330.

Equitel subscribers are however required to hold an account with the bank. The mobile virtual network operator is selling the thin-SIM cards at Sh600 each.

The thin SIM-cards allow a subscriber to access mobile networks when stuck on ordinary SIMs. Airtel will earn a levy from each call made from the Equitel platform.

Equity is riding on Airtel’s infrastructure to offer voice, SMS and data services to subscribers. It will cost Sh4 to make any calls on the Equitel platform and Sh1 to send an SMS.

“We welcome competition; it is a true indicator of the free and robust operating environment we have in Kenya,” said Bob Collymore, the chief executive of Safaricom.

He added; “Safaricom continues to invest and offer relevant products to our customers and we remain dedicated to deliver on our promise to the customer with both speed and consistency.”