Mobile Money Africa

Visa Inc. has announced its intention to invest £6.6 million in London-based mobile banking and payments service provider Monitise plc to increase its stake to 14.4%. Earlier the company has announced that the existing agreement with Monitise was prolonged to 2015.

Last June Visa invested $13 million in the company by signing a 5-year strategic agreement called “Global Alliance Agreement”. Under the agreement Monitise was to develop technology to provide SMS alerts and secure payments to 2 billion clients of Visa worldwide.

During the last 2 years Visa has partnered with a number of financial institutions, mobile network operators and technology providers in order to smoothen and commercialize the mobile banking services for an enhanced consumer-base across the globe. The company believes that such partnerships will help to popularize the company service and to provide access to online payment services to more people worldwide.

mpesa

The US will leverage her technology by importing innovations from Africa as part of the Obama Administration’s bid to strengthen relations with the continent.
Citing the M-Pesa evolution, US Under Secretary of State for Public Diplomacy and Public Affairs Judith McHale said her country’s economy could benefit by importing the revolutionary mobile money transfer system from Kenya.
“We do not have such a system in America and we could import it to make it part of our national payment system,” said Ms McHale.
M-Pesa is run by Kenya’s largest mobile phone service provider, Safaricom, as a platform to send and receive money by its subscribers using their handsets. The technology is a first in the world.
Ms McHale spoke on Friday after paying a courtesy call to the Nairobi Stock Exchange. She is on an official visit to the country.
In return, America will support local universities and colleges by initiating an exchange programme between her institutions and those in Kenya. And instead of going the traditional way of exchange programmes of moving people, the proposed exchange will also leverage on technology.
“We appreciate that it is a limit in the number of people we can move to America from Kenya and America to Kenya. We thus want to use technology to link universities and colleges so that they can share knowledge,” she added.
On increased trade, she said, the Obama Administration is keen to see African countries focusing on serving home markets and thus supporting governments to address challenges of lack of links within the continent.
“We know there are impediments to more intra-continent trade in terms of communication and infrastructure. We want to encourage African governments to address these impediments,” said Ms McHale.
Appointed in President Obama’s Cabinet in May last year, Ms McHale’s duties are aimed at helping the American administration strengthen its relations with the rest of the world.
She is the former president and chief executive of Discovery Communication, which runs the Discovery Channel popular for airing documentaries on science, technology, adventure and nature news in over 170 countries.

Nidhi Subbaraman

Thanks to a mobile banking system launched last month in Senegal, people with no previous access to bank accounts were able to watch the World Cup via satellite services that they paid for electronically with a few taps on a mobile phone. The service is a clear sign that mobile banking is taking off in Africa, giving some of the world’s poorest people a way to access financial services.
“In developed countries, there were a lot of mobile banking services and they failed,” says Ignacio Mas, an economist who works for the Bill and Melinda Gates Foundation. The reason, he believes, is that for people who already have access to banks, as most people in the developed world do, it’s difficult for such services to compete.

For poor people in the developing world, however, banking facilities are limited, and almost all transactions are carried out with cash. “There’s no business case for banks to build banks and ATMs where poor people live,” says Mas. Typical transactions in such places would be so small that it’s not cost-effective for banks to operate there. With no way to store or send their money electronically, people who want to give money to family in another village have to bring it themselves. Mobile phones offer banks a way to tap into existing infrastructure to deliver these services inexpensively. In the last 10 years, a bevy of mobile service providers, banks, and independent organizations have launched mobile money transfer facilities in the Philippines, India, Pakistan, and Kenya.

The system, which is called Yoban’tel by Obopay and was launched on June 24 by Obopay and Société Générale de Banques au Sénégal, lets customers use text messages to transfer money to satellite and cell-phone providers. Users walk into a participating store and make a deposit into their Yoban’tel account. They can then use that money to pay bills. Obopay hopes to extend Yoban’tel to other utilities, like electricity and water. Other collaborators in the country include Tigo, a telecommunications provider; CanalSat Horizons, a satellite provider; and Crédit Mutuel du Sénégal.

“[People can] load money into their account, pick up money if someone sent it to them, and also pay their bills,” says David Schwartz, Obopay’s head of product and corporate marketing. Obopay’s goal, Schwartz says, is to “empower people by giving them the first access to financial services.”

“In terms of strategic fit, you see Africa as the place where this has a lot of potential,” says Mas. “That has to do with the magnitude of the need [for financial services] and the fact that connectivity is available for the first time.”

Kenya’s M-Pesa is by far the most successful example of a mobile money transfer service anywhere, says Mas. Launched by the mobile provider Safaricom in 2007, it started as a way for people to send money home to their families. The service quickly evolved to let people transfer money to business partners, pay bills, and create savings accounts. In just three years it has grown to include more than nine million users, representing about 40 percent of the country’s adult population. Encouraged by M-Pesa’s success, mobile operators, banks, and independent companies are introducing variations of the money transfer system in other areas of the continent.

“In Africa we are seeing an explosion of these things in terms of mobile operators or people who want to do it,” says Mas. “It’s hard to get off the ground, but once you do that, you a see a snowballing effect and can make them extremely powerful, as M-Pesa has demonstrated.”

Obopay was founded in the United States and launched in India in 2007 in partnership with Nokia, which dominates the mobile-phone market in that country. Nokia invested $70 million in the company in 2009. Earlier this year, Obopay launched a banking service in collaboration with Yes Bank in India. It also has a Kenyan operation called yuCash, which opened in December of last year. Securite General and Obopay hope to expand Yoban’tel’s reach, possibly to Senegal’s neighbors.

Simon Russell
www.bizcommunity.com

Twelve years ago the retail banking industry thought the end of ‘bricks-and-mortar banking’ era was close, with the introduction of mainstream internet banking. However, this did not materialise as banks in their quest to differentiate, realised the value of the branch in the selling process and its necessity for customer acquisition and authentication.
The internet became a convenience channel and every customer with access to a PC expected their bank to provide an internet enabled banking service. In addition, without a clear integrated multi-channel approach, banks have in general not realised the expected cost savings and revenue opportunities of introducing an internet channel.

African revolution

In certain cases in the developing world, beyond South Africa, we have seen a revolution in the payment and remittances process led by MNOs (Mobile Network Operators). Kenya is a great example where Safaricom, a MNO, with its mobile banking offering M-PESA have gained more than 78% of the mobile phone market. In countries like Kenya, where there is a high population of unbanked and a high penetration of mobile devices, we can expect this trend to continue if the relevant banking or communications regulator does not check it.

South Africa however is different. It has a relatively ‘mature’ regulated banking industry and, thanks to the Mzansi product, has seen a 17% growth in the banked population since the launch of the account. FinMark Trust believes the Mzansi product accounted for just under half of that growth.

In comparison to other emerging markets, South Africa has a relatively high percentage of banked population around 46% compared to Kenya’s 15% banked population prior to the arrival of M-PESA. So it is highly unlikely that MNO led mobile banking play will dominate in South Africa.

Mobile banking could have rapid adoption

However, with more than 60% of the adult population in South Africa owning a cellphone, the highest on the continent, the stage is set for the rapid adoption of mobile banking.

In addition to the existing economic challenges, SA banks face significant pressure in the form of the competition commission, government access targets and more demanding consumer requirements. The winners, in the fight for market share, will be those banks with high customer loyalty delivered through greater customer centricity, convenience and low cost processing.

Mobile banking enables all three and we are already seeing extensive positioning in our market with some innovative products such as FNB’s Send Money and Standard Bank’s Mimoney.

Mimoney enables payments between domestic users through SMS based vouchers with PINS that can be redeemed at large retail stores. Not only is this type of innovation convenient but it demonstrates how mobile can simplify a bank’s distribution network – money is being transferred between clients without the need of an ATM or branch.

The scramble for banks to partner with retailers, government institutions, gyms and other ‘go to’ locations, to provide cash out points has already begun.

Time for small innovative banks

This is good news for smaller innovative banks wanting to take on the mass market and take market share from Tier 1 Banks. It is a challenge for the Tier 1 banks to defend with huge investments in ATM and branch networks. Approximately 60% of a bank’s cost is typically in its distribution network.

Small innovative banks, using existing mobile technology, leveraging agents and through partnerships in other industries, can bring low cost, convenient transactional banking to consumers country wide thereby challenging the previous exclusive domain of the Tier 1 Banks.

The ‘attack strategy’ will be to acquire customer transactional business through a combination of convenience and a low cost play – ownership of the transactional account is a prerequisite for understanding a customer’s behaviour and for executing a successful customer centric strategy. A successfully executed customer centric strategy increases loyalty (stickiness), decreases customer churn, increases the number of products sold to clients and increases profitability and Return on Equity.

Evolution of mobile

Mobile will evolve quickly from P2P payments, wallet, bill payments and general banking to more complex banking processes such as Account Origination (identification and authentication) and finally the holy grail of them all true M-commerce – point of sale transactions – in 2006 there were 160 billion POS transactions globally.

Account Origination identification and authentication processes are dependent on mobile devices with camera and biometric capabilities, with implementation by roving sales and service agents. It will take time before these devices become affordable for the majority of the population. However, when they do become available, they will transform the mobile handset into a sophisticated banking sales and service channel that will challenge the prevalence of ‘bricks and mortar’ banking.

The success of M-PESA in Kenya has shown that in the mobile banking age, speed is critical and a well thought through offering is vital to ensure market success. For banks to execute an effective mobile banking strategy they will need a clear vision and an operating model that enables low cost processing, and for more sophisticated customers a customer centric approach to banking that is seamlessly integrated to the bank’s other channels.

How does your platform work?

The platform www.CashEnvoy.com is an internet payment service that allows Nigerians to make payments, send money and receive payments with ease and convenience in a secured environment.
Once you sign up for a free CashEnvoy account, you can make payments, send money and receive money online.

To make payments using CashEnvoy, you have to fund your CashEnvoy account using Nigerian debit cards, online bank transfer or bank deposits and then select Cash Envoy during checkout on a merchant website.
Funds are then transferred securely through CashEnvoy and money is deposited into the seller’s Cash Envoy account.
When you make payments or send money, the amount is deducted from your CashEnvoy account balance. Both parties are notified via an email from CashEnvoy.
Funds can be withdrawn anytime from your Cash Envoy account.Funds withdrawn are paid into users’ registered bank account.You need no special technology to send/receive money through CashEnvoy. The only requirement is a valid email address.

In a Country like Nigeria with Security issues, how has it been for you?

Internet security is a major issue in Nigeria today; hence, security issues are handled with great importance.
Guaranteed security of transactions has always been the foundation of CashEnvoy. For an internet payment platform to survive in our environment, efficient and dependable security measures must be built into the foundation.

CashEnvoy was developed with this in mind, hence the reason why we have a myriad of security measures, some of which include account auditing, unique transaction references, user verification, 24/7 monitoring etc. Also CashEnvoy can only be accessed via secure http thus ensuring that all data sent to and from the service is encrypted.

We also do not hesitate in cooperating with anti corruption bodies like the Economic and Financial Crimes Commission and the Nigerian Police Force in bringing internet scammers to book.

As a first time user, do I need to Sign Up to make a payment?

Yes, all first time users have to go through a quick registration process.
This is the first step in user verification. Signing up is also very important for security reasons.

Cost of using your platform?

CashEnvoy charges only per transaction.
CashEnvoy does not charge any up front fees, withdrawal fees or any other fees.

Challenges in the Nigeria financial system and the effect on your operations?

One of the major challenges is – collaboration. We hope that in the future, users can make transactions on the internet directly from their bank accounts using our secured payment gateway.
Another major challenge presently is in the efficiency of the available Nigerian debit cards.
Internet banking is also an area that can be improved in some banks.
In all, we make the very best use of available resources to produce optimum performance in our services.

What are the cost elements for sender and receiver?

For the sender or the payer, using our service is totally free.
However for the receiver or the payee, there is a fixed service charge and an operational cost that depends on the amount being received.

Where Can I sign up or use your services?

To sign up or the registration for our services is available only on the internet through our online portal: https://www.cashenvoy.com

A brief background on the management?

Our management philosophy is centered on trust, relationship and friendship. We believe people are the greatest assets.
We also accept that the business would face challenges every day. Therefore the attitude is that regardless of the degree of difficulty, if the business is to survive, we must face each challenge as it comes.

Plans for the future and the unbanked Nigeria?

We are looking to a future where we would not only be the most prevalent means of online payment in Nigeria but also across Africa thereby promoting business transactions between Africa and across the world via the internet.

Plans for the future and the unbanked Nigeria?

We are looking to a future where we would not only be the most prevalent means of online payment in Nigeria but also across Africa thereby promoting business transactions between Africa and across the world via the internet.

A brief background on the management?

Our management philosophy is centered on trust, relationship and friendship. We believe people are the greatest assets.
We also accept that the business would face challenges every day. Therefore the attitude is that regardless of the degree of difficulty, if the business is to survive, we must face each challenge as it comes.

Olaoluwa Awojoodu

Head Business Development Unit

B.Sc Computer Science and Engineering, Obafemi Awolowo University

Member – Nigerian Institute of Management

SAP Business One consultant.

Olusegun Okin

Head Technical Support Group

B.Sc Electronic/ Electrical Engineering, Obafemi Awolowo University

PRINCE2 Registered Practitioner

Olusegun possesses vast knowledge in planning, design and development of business applications.

uniBank Ghana Limited, one of the vibrant indigenous banks in the country, intends to roll out more e-zwich Automated Teller Machines (ATMs) which will be located at strategic places in the country, beginning this month.

Though the bank will not disclose the areas that the ATMs will be sited, CITY & BUSINESS GUIDE gathers that they would be placed in Accra and Kumasi.

According to Rev Edward Randolph-Koranteng, Head of Electronic and Transaction Banking, the financial intermediary is in the process of installing a biometric ATMs at the Spintex road.
The ATM at the Suame branch has been functional since June 23, 2010.

It would accept all e-zwich cards regardless of the bank, which makes it accessible to many people.

Rev Randolph-Koranteng said the time has come for customers of uniBank to derive full benefits from the e-zwich ATMs since the bank can now link the traditional accounts of the customers to their e-zwich cards.

Biometric card holders, he said, can therefore perform various transactions including the transfer of money from one card to the other.

These services, according to him, would benefit the card holders.

Rev Randolph-Koranteng expressed satisfaction with the e-Week celebration which he said was timely.

It was aimed at creating awareness about electronic banking products.

He noted that uniBank wants to launch products that would enhance various transactions.

Some of the electronic products of the bank include uni-Alert, uni-Mobile and uni-Web.

mpesa

vigilantkenyan

Have you heard of this incidents?? – better be safe than sorry!
This incident happened to a colleague recently.A bad experience indeed.
He received a call from someone claiming to be calling from
Safaricom.The caller was very composed.
The caller told him ‘thank you for being our loyal and valuable MPESA
customer.You recall we had initially given you a black Sim card but
changed to green”.He answered in the affirmative. The caller then went
ahead to tell him that Safaricom was running a reward promotion
scheme for their loyal MPESA customers and went ahead to ask him to
confirm his National ID number and year of birth.Unsuspecting, he
disclosed that information. Coincidentally his birth year was also his
Mpesa PIN No.
The guy posed for a while and asked him whether 19- – (say 1967) was
his year of birth .He again answered in the affirmative.

The caller then told him he would be sent Nokia 8230, but before then
he needed to dial *33*0000# ,which he did.He was then told not to
call or transact anything using his line for the next ten minutes as
they perfrom transactions, purportedly at Safaricom,facilitating the
process of receiving the Nokia 8230 set.He complied.He is asked about
his current location,which information he gives.

After 10 minutes he tried to call back the number to confirm status of
the alleged gift only for the following message to appear :”Barring
all outgoing calls activated for SMS services activated for all data
circuit async”.

After 15 minutes the wife calls him on his alternate line claiming
that some one had called her using his (husband”s ) safaricom line
telling her to send them Ksh.10,000 for his release from arrest.She is
baffled and hence decides to use alternate line,only to discover he is
safe and sound.

In the meantime the wife calls safaricom to block the line,but it was
too late,as all the money in his MPESA had been withdrawn.

What is apparent is that this line was blocked by the code he typed
,viz *33*0000#.

The question uppermost in mind is how it could be unblocked without
some form of connivance by Safaricom staff.He had a substantial amount
in his Mpesa account.Could these thugs be getting targeting lines-with
good balances through connivance with Safaricom staff.

It is unlikely Safaricom will admit culpability, but tujichunge
wenyewe.

Keep safe.

The caller identified himself as Alex Omondi(Of course fake name) and
called using 0720 464 777

It is safer to tell this caller to call back in a while whilst you
check with Safaricom customer care by dialing 100 from your Safaricom
line or 020 4272100 from land line or any other line. Do not carry out
any instructions on phone without firm confirmation that you are doing
the right thing.

Competition in the mobile money business continues to bring better services to mobile phone users as Uganda Telecom’s (UTL) M-sente joined the school fees platform. This comes just over a month since Zain launched its Zap school fees portfolio in the market.

The mobile money market since its inception has been a battle for innovative partnership that improves on efficiency and effective service delivery. At the M-sente launch, UTL announced that it had partnered with Dfcu bank in bringing the School Fees platform closer to the people and make it more efficient to make these payments.”Students do not have travel with cash. It can be transferred onto an m-sente account and sent to the schools’ account in DFCU bank,” Alex Waiswa from the M-Sente team told East African Business Week.

With mobile money transfers the question of secure transactions can be read from the lips of some of the customers. At a breakfast for head teachers hosted by Dfcu bank, secure transactions were a key concern. UTL which looks to implement the new school fees platform by the end of august was put to task to explain how secure these transactions will be.

“What if an m-sente agent runs away with the money that has been given to him by the various parents who have made the payment?” One headteacher asked.

According to UTL, before an agent is selected, a particular amount of money is deposited by the agent on a UTL account. This way the agent will not be able to take off with schools money but instead will be working to recover the money already paid to UTL. The technology being used by UTL is a concept designed by MapSwitch a technology solutions company. MapSwitch Uganda Director of Mobile Banking Phil Levin said that m-sente platform has various security checks that effect the transactions. The checks include a pin number and some verification codes.

“The transaction is safe. Once money is paid and the agent sends the virtual money to the school account, it is immediately deposited on the account of the School at Dfcu bank,” Phil added.

The partnership with DFCU, schools will need to open accounts with bank so that when the money is paid it directly goes to the schools account. Unlike the Zap system, where the bursar can access the platform and be able to see who has paid, the m-sente system is different as it is the bank that accesses these payments.

“DFCU will have access to records of payment on a daily basis. The bank on receiving the report, will then deposit the money on the different schools’ accounts. Daily the schools will receive an e-mail with a report on which student has paid,” said Wilbrod Owor the head of Consumer Banking at DFCU bank. With convenience in the minds of parents, school fees payment platforms on mobile money then banks will not want to be left behind as the future technology now is visible in the telecom sector.

MTN Uganda and United Bank for Africa today signed a landmark partnership agreement establishing UBA as the first financial institution to become an MTN Mobile Money agent.
MTN Uganda Chief Executive Officer Themba Khumalo and UBA Managing Director Margaret Mwanakatwe signed the agreement in the UBA Boardroom in Kampala, opening up UBA to close to a million MTN Mobile Money customers.
With close to one million MTN Mobile Money customers in the first year alone, the money transfer service has become Uganda’s fastest-growing, non-tariff telecommunications value add service, making it a perfect product fit for UBA as one of the fastest growing commercial banks in Uganda.
“UBA is one of Africa’s largest banks and is growing fast in Uganda. Through this partnership we will extend the reach of both MTN Mobile Money and UBA to customers across the country,” said UBA Managing Director, Margaret Mwanakatwe.
Mwanakatwe said the introduction of MTN Mobile Money at all its nine branches across the country would boost the penetration of banking services in Uganda and will be complementary to UBA’s other money transfer services such as U-Direct and Africash, enabling customers to convert cash on their personal and business accounts into e-cash in virtual accounts.
She hailed the partnership, saying that its success spells a greater future for easier money transfers within the region.
“UBA is in the process of investing in the creation of a one large borderless network, that right now spreads from Kenya in East Africa and Zambia in the south, all the way to Senegal in West Africa and the network is growing. We believe this is a service that we can roll out in other countries of Africa where both MTN and UBA operate,” she said.
MTN Uganda Chief Executive Officer Themba Khumalo said the partnership would enhance UBA’s portfolio with over one million potential customers.
“Since launch in March last year, MTN Mobile Money has recorded transfers of close to UGX.600 billion, and has close to one million registered users. We have reached the unbanked through the mobile phone, and today we bring our customers the added advantage of increased liquidity in Mobile Money through UBA,” Khumalo said.
“This partnership is for the benefit of our customers as well as the financial sector of Uganda. We commend Bank of Uganda for being open minded and highly appreciative of innovation. Their approach to financial management has significantly increased access to financial services through MTN Mobile Money,” Khumalo added.
Khumalo explained that the introduction of UBA as an MTN Mobile Money agent would assure liquidity of service across the country where UBA branches are located.
MTN Mobile Money was launched in March 2009, and more than 1,300 MTN Mobile Money Service outlets have been opened up across Uganda, spreading transaction services into remote areas. Over 60% of transfer recipients are located in rural areas.

Saul Butera

As the country strives to increase the number of bank users, Rwandatel is now set to unveil its ‘Mobile Money’ service, partnering with the Bank of Kigali (BK) as the receiving bank.

The ‘mobile money’ service enables one to make a financial transaction using a mobile phone or any mobile device with SIM card technology.

During an exclusive interview with the Business Times, Rwandatel’s Chief Commercial Officer (CCO), Francis Egbuson revealed that Rwandatel is finalising paper documents with the regulator, the National Bank of Rwanda (NBR).

“We are planning to launch the service in the fourth quarter (Q4) of the year and we are very confident the service will be a success as we are taking lessons from our sister company, Uganda Telecom (UTL),” Egbuson said.

The operator will invest Rwf900 million in developing the service and the officials say that the service will be much easier to use and they believe it will attract a wide range of clients.

Libya African Investments Portfolio (LAP), the investment arm of the Libyan Government which owns 80 percent of Rwandatel is set to invest $94 million (Rwf53.6 billion) this year.

Egbuson said the money will be invested in upgrading the network, GSM sites, Fibre optic and in the Worldwide Interoperability for Microwave Access (Wimax) technology which the operator said is in the piloting phase and will be unveiled in the next 30 days.

Wimax is a telecommunications protocol that provides fixed and fully mobile Internet access. The current WiMAX revision provides up to 40 Mbit/s with the IEEE 802.16m update expected offer up to 1 Gbit/s fixed speeds.

However, Egbuson said that the issue is not to unveil the technology but its to provide and deliver what is made of the technology.

Rwandatel’s service comes at a time when the country’s leading operator by market share, MTN Rwanda, launched the service recently.