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Paying the piper

As mobile penetration continues to outstrip banking facilities across emerging markets by some measure, mobile operators are jumping on the bandwagon to provide mobile banking services to the massive unbanked population. With an estimated 200 million more mobile users than bank customers in the MEA region by 2012 according to analysts, Michelle Mills assesses the factors that have helped the industry-changing M-Pesa mobile remittance service become a sensation in Kenya, and what operators keen on replicating M-Pesa’s success need to knowimage

Mobile-assisted banking has been around for about a decade but with limited appeal in developed economies, where banking services are readily available to most segments of the population. In recent years, the strong correlation between the scarcity of banking infrastructure with the escalating volume of mobile phone users across Africa and the Indian sub-continent, has led to the deployment of several banking and remittance services where the mobile phone acts as a digital wallet. The latter has been defined as ‘transformational mobile banking’ where the mobile phone is central to the service and where no previous relationship with a bank is required, as opposed to ‘additive mobile banking’ where the phone provides a channel to existing bank accounts.

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Vodafone to offer M-PESA services in South Africa

Vodafone will deploy the hugely-successful M-PESA mobile banking service in South Africa, the operator has announced.

The M-PESA service was developed by Vodafone and has already been deployed by Safaricom in Kenya – where it has become a flagship model for m-commerce services, Vodafone in Tanzania and Roshan in Afghanistan. More than 11 million subscribers already use the M-PESA mobile money service.

The operator plans to serve the approximately 26 million people in South Africa without official bank accounts. Currently roughly 60 per cent of residents use formal bank accounts, whereas the mobile penetration rate among the adult population is more than 94 per cent.

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Paying the piper – mobile-assisted banking

MTN launches largest global roll-out of mobile banking

South Africa’s MTN today launched the largest deployment of mobile wallet services to date in a deal worth US$9.7 million, which will enable more than 80 million subscribers across 21 countries in Africa and the Middle East, to access mobile banking services.

MTN-motorbike web onlyMTN subscribers will have the option to receive a debit card for withdrawing cash from ATMs

‘MTN MobileMoney’ will use the mobile wallet solution of Fundamo, a specialised mobile banking software provider, with the aim to bring basic financial services to the largely unbanked populations in the region. MTN MobileMoney has already been available in South Africa, and this deal will extend MTN and Fundamo’s existing relationship to an additional 20 countries.

The mobile wallet service will allow subscribers to transfer money, make mobile payments, check their balance, make mobile purchases and buy air-time. Users also have the option to receive a branded debit card that can be used to withdraw cash from ATMs. The software also uses HSM technology which offers a PIN system that prevents sensitive information from residing on the handset, safeguarding subscribers against theft and fraud. It is also fully compliant with all banking regulations, enabling banks to login to the system and manage the banking elements of the service, while the operator focuses on customer acquisition and retention.

MTN operates telecoms networks in South Africa, Botswana, Rwanda, Swaziland, Uganda, Zambia, Benin, Cameroon, Congo Brazzaville, Cote d’Ivoire, Ghana, Guinea Conakry, Guinea Bissau, Liberia, Nigeria, Sudan, Yemen, Syria, Iran, Afghanistan and Cyprus.

The deal follows recent announcements by other regional operators including Bahrain-based Zain, which launched ‘Zap’ mobile banking services in Uganda, Kenya, and Tanzania last month. Zap will eventually be rolled out to all of Zain’s 22 operations across Africa and Middle East, with a subscriber base of 63.54 million customers as of end-2008.

Saudi Arabia’s STC also launched in February a mobile commerce solution in Kuwait through its subsidiary Viva. STC has not confirmed whether it would extend its service to its operations in Saudi Arabia, Turkey, South Africa, Malaysia and Bahrain.

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STC’s Viva launches M-payments solution in Kuwait

Zain launches Zap mobile banking in Kenya, Tanzania and Uganda

Paying the piper

STC’s Viva launches mobile payments solution in Kuwait

STC’s Viva will launch a mobile commerce solution in Kuwait the operator announced today, using a platform provided by Irish firm Macalla.

STC VIVA logo The third mobile operator, which only launched services in December last year, will provide payment services in Arabic and English directly to Viva subscribers and also via its dealer and agent network.

Rollout is being undertaken on a phased basis, and service channels will include mobile, kiosks and online, with supporting payments done by mobile wallet, cash, debit or credit card.

STC operates telecom networks in Saudi Arabia, Turkey, South Africa and Malaysia, and will launch a mobile network in Bahrain, but has not stated yet whether it will extend the service to its other subsidiaries.

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Zain launches Zap mobile banking in Kenya, Tanzania and Uganda

M-Pesa: Paying the piper

Zain launches Zap M-banking in Kenya, Tanzania and Uganda

Zain announced plans yesterday to bring its mobile banking service Zap, to all of its 22 operations across Middle East and Africa, with the initial programme being launched in Kenya, Tanzania and Uganda.

Kenya Photographer Gitte Daniels Source GSMA & Decisive Media

Zain has overcome regulatory hurdles in to launch the Zap M-banking service Kenya, and will compete with Safaricom’s M-Pesa service which has five million registered users

The Kuwaiti operator has partnered with leading international and regional banks including Citigroup and Standard Chartered to launch the mobile banking service in the three East African countries.

The service will allow Zap users across Kenya, Tanzania and Uganda to use their mobile phone to pay bills for goods and services, make remittances to other mobile users or bank accounts, top up airtime, send airtime to other Zain customers within the three countries, and to manage their bank accounts.

“With a potential customer base of over 100 million people in Kenya, Tanzania and Uganda, many of whom have never had access to formal financial services, we believe Zap will reshape the future of banking in Africa,” stated Saad Al Barrak, CEO of Zain Group.

With yesterday’s launch, Zain has overcome some earlier delays which it faced in gaining regulatory approval for its banking service in Kenya. Earlier this month, Zain Kenya’s CEO Rene Menza stated that the Central Bank was holding up the award of the banking licence to Zain, and as a result the operator was considering legal action, according to local news reports.

Now that Zain has the green light to launch Zap in Kenya, it will face strong competition from market leader Safaricom which not only has market share of 80 per cent, but its highly successful M-Pesa service has been the flagship mobile remittance and banking service in Africa, and has just hit five million registered users. Transactions in Q308 amounted to KES9.6 billion (US$135 million).

Zain, which is the fourth largest mobile network in the world by geographic presence, has not announced when it plans to extend the service to its other subsidiaries.

Image courtesy of GSMA and Decisive Media

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M-Pesa: Paying the piper

Viva launches M-payments solution in Kuwait