Kenya’s leading mobile operator Safaricom has partnered with Equity Bank to let subscribers withdraw cash without needing a bankcard.
The deal will give people with no bank accounts the chance to nevertheless withdraw cash from Equity’s 550 ATMs by using…
Kenya’s leading mobile operator Safaricom has partnered with Equity Bank to let subscribers withdraw cash without needing a bankcard.
The deal will give people with no bank accounts the chance to nevertheless withdraw cash from Equity’s 550 ATMs by using Safaricom’s mobile money service, M-Pesa.
Equity claims to be Kenya’s largest lender, while M-Pesa has 9 million users, representing more than half of Safaricom’s userbase and a fifth of Kenya’s population.
Safaricom, which is 40% owned by Vodafone, launched M-Pesa in 2007 and is widely considered as a pioneer of mobile banking services in Africa.
Since then, other operators have jumped on the bandwagon. Essar and Zain respectively launched YuCash and Zap last year, while Orange is exploring ways to follow suit. MTN launched MobileMoney in Uganda last March and plans to expand it across its markets including Afghanistan and Syria.
M-Pesa itself is set to be extended through Vodafone, which has launched it in Tanzania and plans to replicate its success in Egypt, India and South Africa.
According to Wireless Intelligence, M-Pesa is a key reason behind Safaricom’s continuing dominance of the Kenyan market, where it claims 80% of mobile users despite competition from Essar, Zain and Orange. The research firm also says M-Pesa has played a major role in driving the operator’s non-voice revenues, which account for 18% of its total revenue.
In a large part, the take-up of mobile banking in Africa is explained by banks’ low penetration in the region, leaving many people seeking alternative ways to carry out basic bank transactions. According to the World Bank, only 10% of Kenyans had access to traditional banking services in Q309, whereas 53% had access to a mobile network.
Meanwhile, the applications themselves are becoming more sophisticated, allowing for more services such as international money transfers. This could allow the mobile operators to target Africa’s large market of international remittances, currently dominated by the likes of Western Union.
According to Safaricom, M-Pesa has handled transactions worth a total of more than KSh300bn (US$4bn) since 2007. It is operated through a network of more than 14,700 agencies, which are spread around the country to let users deposit and withdraw cash.
* In related news, AITEC’s annual Banking & Mobile Money Conference will be held in Nairobi on February 24-25.
