Business
Price wars loom as Zain launches cheaper money transfer service
A Zap agent demonstrates key features of the new service. Customers will also be able to pay for goods and services, besides using their mobile phones to transact business in their bank accounts. Photo/ANTHONY KAMAU
The stage is set for a bruising price war following last week’s launch of Zain’s mobile banking service, Zap.
Launched simultaneously in Nairobi, Dar-es-Salaam and Barcelona (Spain), Zap could send its competitor, Safaricom’s M-Pesa, back to the drawing board.
Customers of the new money transfer service will pay Ksh 10 per transaction, less than half what M-Pesa subscribers pay.
Zap customers can also use it to pay utility bills, such as for electricity and water, an option M-Pesa is yet to introduce.
Speaking at the services launch at Nairobi’s Hotel Intercontinental, Chris Gabriel, chief executive of Zain Africa, said the company would change lives and transform the way people do business.
“Research has shown that m-banking and m-payments can lower the transaction costs of money transfer, increase the flow of money by making it easier to send smaller amounts and introduce those without bank accounts to a means of secure financial management,” he stated.
The sentiments were echoed by Rene Meza, Zain Kenya managing director: “We believe the benefits to our customers will be immense.
This service can transform the way we handle and manage money.
The mobile phone has already improved African life in many ways — it is exciting to think it now has the potential to replace banknotes and coins and give customers access to world class banking services”.
In East Africa, Zap will be available in Kenya and Tanzania, before launching in Uganda shortly.
To establish the service, Zain partnered with regional and international banks, including Citigroup and Standard Chartered Bank.
Customers will also be able to pay for goods and services, besides sending and receiving money from family and friends, and use mobile phones to transact business in their bank accounts.
Zap will be included in the company’s One Network service, which will allow cross-border sending of airtime to other Zain customers.
Zain was the first mobile company to introduce phone-to-phone air time credit transfer, known as Me2U, in 2005.
Currently, the One Network allows customers to move across geographic borders without attracting roaming surcharges.
