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Kenya Continues To Lead The Way Final
1. Kenya continues to lead the way
Essar Telecom Country Manager Atul Chaturvedi announces new partnership with Equity Bank CEO James Mwangi.
Kenya – the Silicon Valley of Banking
Kenya is at the threshold of fast-paced growth next year, according to the World Bank. This year
Kenya repeatedly demonstrated leadership in Mobile Money and this latest announcement
from Essar’s YU and Equity Bank reaffirms Kenya’s status as the “Silicon Valley” of mobile
banking and payments.
Over 70% of all households in Kenya use mobile money. Each mobile network operator offers a
mobile money service. Safaricom and mPesa are the best known, but there are others including
YU Cash by Obopay and it is becoming a very competitive market which is pushing providers to
bring mobile money services to the next level in order to meet demand and compete for
customers. Yesterday, YU and its innovation partner, Equity Bank, upped the ante by
announcing new functionality made possible by offering mobile money customers the ability to
access their service directly from a full service Equity Bank account. This is a concept that we at
Obopay call a “mapped bank account”. It provides the customer with the choice of a full service
bank account, complete with mobile money services, with the ability to transact directly from
that account, rather than through a separate mobile account. .
2. How does Mobile Money work in Kenya?
Mobile Money is transforming Kenya. 3 years ago it was a typical cash centric emerging market whereby
most consumer transactions were cash based. Then almost overnight things changed when Safaricom
offered its customer’s a “mobile wallet” to store money, send money, and pay for things directly from
the phone. Other mobile operators have now followed suit and provided similar capability, and it has
become a must have service.
Here is how it works - users sign up at a retail location where they previously went to purchase mobile
phones or prepaid airtime minutes. Once enrolled, they can load money directly on their phone by
giving participating agents/retailer cash over the counter. If they need to withdraw money, they can go
to any authorized agent/retailer and get cash out of their mobile phone account. The first thing people
in Kenya did was use the service to send money to family members – lots of people work in the cities but
have family members in rural areas. Since there are retailers supporting this everywhere – it was the
fastest, safest, and most reliable way to send money overnight. It started with money transfer but now
people use their mobile money to buy prepaid minutes, pay bills, buy online, and buy at stores, as a way
to save money and enhance their personal security by removing the need to carry cash.
Statistics from Central Bank of Kenya indicate that remittance flows in September, 2010, increased by
12.6 per cent to $ 58.6 million, from $ 52 million in August 2010 and were 17.1 percent above the
cumulative 12 months average of $ 50 million a month.
What is a mapped bank account?
Before today, most Kenya users of mobile money were limited to using money in the mobile accounts. If
they had bank accounts it wasn’t easy to use the money they already had in the bank. Also, if they
wanted to “upgrade” and have more services from a bank, which many of them do, that wasn’t easy.
Some providers allowed electronic transfer between bank accounts and mobile accounts – but that
could take an extra step, take hours or days, and could involve extra fees. The term we use at Obopay
for this type of money movement is a “linked bank account” or a “linked card”. This is very useful since
users may want to have my different accounts “linked” so I can move money between them.
3. At Obopay, we think “linked accounts” are necessary - but insufficient for many users. Users want the
option to have full service banking and to transact directly off of their preferred account – and we
deliver it via a “mapped bank accounts”.
A mapped account is a traditional bank account “mapped” to my mobile. The account has all the
features the bank wants to offer AND allows the user to receive, send, or pay directly from that bank
account. In addition to allowing the user to also have direct access to traditional bank accounts from
their mobile. It also allows instant money movement between the traditional bank account and the
mobile account. So if a user wants to use both – then they have lots of options in how they manage and
spend money.
4. Obopay, the global leader in mobile payments, is an innovator in both mobile and mapped bank
accounts. It is especially important in markets like Kenya where people often don’t live near banks. Now,
with Mapped Bank accounts they can have all the services they need or want from a bank via a mobile
phone.
Mobile accounts have brought limited banking to large underserved communities, mapped bank
accounts in combination with mobile accounts will add full service banking to these same large
underserved communities.
Obopay could not have accomplished this without great partners like Equity Bank and YU. We are proud
to work with them to bring the full power of mobile and banking in an inclusive way.
Links to Press Articles
http://www.capitalfm.co.ke/business/Kenyabusiness/Banks-plan-to-tap-mobile-money-5135.html
http://www.businessdailyafrica.com/Corporate%20News/Equity%20links%20up%20with%20Essar%20fo
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