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
Posted Saturday, February 21 2009 at 11:05
Following the East African launch, Zap will roll out to the rest of Africa and the Middle East.
As part of its corporate social responsibility, Zain is funding communications in several rural areas in Africa designated as Millennium Villages. Zap customers and the public can donate funds to Millennium Villages, where more than 400,000 people live.
Bashar Arafel, chief operating officer, Zain East Africa, says Zap will be a boon to Africa, as 90 per cent of the continent unbanked.
Currently, 80 per cent of Kenya’s and 95 per cent of Tanzania’s and Uganda’s populations are unbanked.
Group chief executive Saad Al Barrak said:
With a potential customer base of over 100 million people in Kenya, Tanzania and Uganda, we believe Zap will reshape the future of banking in Africa”.
Citigroup’s Global Transaction Services head in charge of sub-Saharan Africa, Sridhar Srinivasan, was equally upbeat about the service.
Kariuki Ngari, Standard Chartered Bank’s head of consumer banking, East Africa, said the bank was happy to partner with Zain.
Also present at the launch was Zain Kenya chairman Naushad Merali.
Bjorn Soderberg, a senior adviser with South Cliff, a Swedish financial consultancy, urged banks not to attack the new initiatives by telcos but to brace for competition.
He spoke to The EastAfrican ahead of the Banking and Payment Technologies Conference that opened last Tuesday in Nairobi.
He said that as more players enter the market, governments will have to put in place stricter regulatory measures to forestall cross-border money laundering and to monitor money transfers.
Zap is likely to send chills down the spine of Safaricom’s M-Pesa, but experts say current M-Pesa customers will take some convincing to migrate.
However, transaction charges are likely to drop, to the benefit of consumers.
This will depend on whether the government lowers taxes on transaction charges as well as agency fees, says Joe Divana of Maris Strategies Limited, UK.
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