Mobile Money Africa

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.

Ayodele Deen-Cole

Business people in Sierra Leone will now have the opportunity to enjoy the new “Splash Pay” service which was recently introduced by splash mobile money transfer company. ‘Splash Pay’ services gives users of splash money system the opportunity to make payment for goods and service at any merchant shop or institution that are participating with splash free of charge using your mobile phone.

Mike Foley, Director of Splash mobile money company said that the home grown Salone mobile money institution’s main priority is to provide a safe and easy transfer of money. Foley told journalists that the splash pay service is network neutral and is available all over Sierra Leone “our service is available to every one with a sim card no matter which network”, Zain, Comium and Africell, Foley stated.

With the splash pay money transfer service people doing business in Sierra Leone can pay for whatever goods whether at the provision shops, boutique or any restaurants or any other service like paying some money to any of your business partners.

Currently, money transfer through this system should not exceed one million leones. Marian Nasser of Jomike Bodyline, a boutique at Wilkinson Road expresses delight and ease when using splash pay system.

“For me, I find it easy and secured to use. I will urge customers to make use of this system when shopping at Jomike Bodyline,” she said.

The splash pay service has been classed as the most advanced payment of service now operating in Sierra Leone. “It grows the economy and introduces thousand of Sierra Leoneans to the financial system. The service also more convenient for employers to transfer money,” Said Sheka Forna, Chairman of Splash mobile money company; adding that merchants can now to provide the real convenience of cashless payments to their customers and that Sierra Leoneans would now enjoy the benefit of the world most advance cashless system”

The Sierra Leone money transfer giants have also disclosed that they have achieved their 100 and more retail points in Sierra Leone. “This is a major threshold for the development of Sierra Leone,” said Forna. The company has assured that they intend to reach 300 retail points by the end of this year.

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.

By Ilya Khrennikov and Eric Ombok

Equity Bank of Kenya, Kenya’s largest provider of small loans, plans to more than double the number of accountholders this year after forming a partnership with Safaricom Ltd., East Africa’s biggest mobile-network operator.

“This is providing an opportunity to open at least 5 million new accounts by the end of the year,” Chief Executive Officer James Mwangi said in an interview in Moscow today.

Safaricom and Equity Bank announced on May 18 an initiative where Kenyans will be able to open bank accounts through Safaricom’s mobile money-transfer service known as MPESA.

Branded Mkesho, the new service will allow Equity Bank, which has 4.5 million customers, to transform Safaricom’s more than 18,000 MPESA sales agents into mobile-banking agents. MPESA has almost 10 million customers, Pauline Vaughn, who runs the service, said June 23.

Equity Bank also plans to start a mortgage-lending unit and will allocate $200 million to the project, Mwangi said.

The bank owns 25 percent of Housing Finance Co., Kenya’s only publicly traded mortgage company. Housing Finance has doubled lending to 16 billion shillings ($195.8 million) since it began its partnership with Equity in July 2007. Equity Bank will continue issuing mortgages through Housing Finance even after it begins providing such loans directly, Mwangi said.

“We now would be able to do both,” Mwangi said.

CATHERINE KARONG’O

Cellulant Kenya Limited, a local mobile commerce company has announced a new product that will enable integration of services to allow easy access to information and banking services.

Chief Executive Officer Ken Njoroge said on Tuesday that the product dubbed “Lipuka” which goes into effect next month seeks to provide a convenient solution to mobile commerce procedures by integrating all banking services and enabling easy access of information by mobile phone users.

This came against a backdrop of increased penetration of mobile telephony services in Kenya, with content convergence becoming the latest concept attracting investment.

“We like to call it a mall because it will be a one-stop shop and what we are doing now is build the mall for services. The first phase was to get all these people who offer these services into the system,” he said.

Mr Njoroge said Lipuka would provide a convenient platform for most services like banking and payment of bills on the mobile phone while at the same time bringing a different concept from what is in the market.

He said the product brought together all the different services on a single mobile device platform.

“If you go into Lipuka, you can fetch your bills and then Lipuka can connect you to your bank,” he stated.

Speaking at a media workshop, Mr Njoroge said that mobile commerce had provided a platform for shared services and this was bound to impact positively on the economy besides improving the general business environment.

“There is a clear trend of convergence because mobile commerce has fuelled the demand for content and this is what most businesses are now centered around,” he said.

“The rate at which people are accessing information is growing faster and this is providing the largest media platform upon which information can be shared,” he added.

Cellulant Limited, which was established in 2004, serves over 60 million subscribers across the continent and intends to penetrate 25 countries across Africa by 2012.

“We are now in seven countries but we will be launching our services in Malawi next month,” the CEO said.

With over 20 million mobile phone users in Kenya and an indicative increase in mobile phone penetration in Africa, mobile commerce is set to revolutionalise business on the continent and arguably spur economic growth.

The Kenyan government has already put in Sh115million to promote the development of local digital content and software applications and this was set to act as an incentive for innovation.

Source: FinancialtechnologyAfrica.

The Central Bank of Nigeria (CBN) has stopped the Nigerian Central Switch
(NCS) drive to decree itself into a monopoly in the e-payment sector of the economy. At a
meeting with all the stakeholders in the e-payment, the apex body through its Deputy
Governor, Mr. Tunde Lemo reversed almost all the prayers sought by NCS. Present at the
meeting were the switching companies, card schemes, Independent ATM Deployers (IADs) and the
banks. All contentious issues surrounding the operations of the NSC were reviewed.

According to the Operational Rules and Regulations for the NCS released by the CBN, “The NCS
is designed to provide interconnectivity and interoperability amongst approved electronic
fund transfer (EFT) switch initiatives in Nigeria.

However, NCS had in recent times mandated banks in the country to connect to it on or before
14th May, a development that did not go down well with the switches, IADs and some of the
banks. Besides, NCS had also ordered the IADs not to connect to any other switches except
NCS.

Earlier, NCS had wanted to connect to MasterCard and VISA through the banks, claiming that
it had no business undergoing the often mandatory certification from these global payment
brands. Sources at the meeting say Lemo frowned at a situation whereby the “value creators”
would be muscled out of the e-payment business by a monopoly that was decreed into
existence.

Accordingly, the CBN directed that IADs can connect to the switches based on agreed
commercial bi-lateral arrangement. While the banks can connect to NCS, connections to the
switches are based on pre-agreed commercial bi-lateral arrangements.

CBN therefore encouraged NCS to undergo all the card scheme certifications in readiness for
transaction processing. The Bankers Committee in 2005 initiated the establishment of the NCS
to be operated by the Nigeria Interbank Settlement System (NIBSS), and which would connect
all the banks and card schemes (switches), hence, making it possible for banks customers to
use their cards on any payment device irrespective of the owner.

Competition in the mobile money transfer business is heating up with the entry of a new money transfer system which allows transactions across Safaricom, Yu, Orange and Zain.

MobilePay, the information technology company behind the Tangaza brand, joins Safaricom’s M-Pesa, Zain’s Zap and Essar Telecom’s yu cash, as the mobile phone becomes the main force in bridging the banking divide.

The firm is carrying out a nationwide agent recruitment drive for entrepreneurs to help it expand go countryside.

“We are launching the system countrywide and those who will join will be able to take deposits and also carry out withdrawal transactions through a trust account in Kenya Commercial Bank,” Mr Quentin Savage, a manager at Tangaza, said.

Recently Diaspora Investment Management Ltd secured a stake in Community Development Systems Ltd, the holding company that owns Tangaza.

According to Mr Savage, the diaspora has endured high costs of remittances from existing international money transfer companies and banks, and the system, while enabling Kenyans to perform local transactions, will assist those abroad to send money back home.

In future, Tangaza will allow dealers to convert into agent bankers once all statutory obligations are met for individual banks and after the Central Bank of Kenya allows them to carry out cash deposits and withdrawals.

Mr Stephen Mwaura, the head of payments at the Central Bank of Kenya on Tuesday confirmed that Tangaza has been licensed to perform money transfer business.

“We want to enhance efficiency. We are doing this through increasing competition with the entry of more players,” said Mr Mwaura.

According to World Bank report 2009, Kenyans abroad sent home over Sh52 billion ($650 million), that places it only second to Nigeria on the continent.

However, this huge volume of remittances has been transacted painfully under huge costs in transfer fees.

Banks and corporations have been partnering with mobile phone firms to extent financial services to the unbanked and also ease payment of bills.

The recent move by Central Bank to release the guidelines on agent banking – officially paving way for commercial banks and financial institutions to hire non banking institution as their agents – is expected to drive growth of money transfer business.

Emmanuel Okoegwale
Principal Consultant @ MobileMoneyAfrica
Director @ African center for mobile financial inclusion – UK.

Stakeholders in Nigeria were hooked to the hope machine in the month of May, expecting the outcomes of the License approvals from the Central Bank of Nigeria to commence pilots projects for mobile money.June seems to hold much promises but the first week is gone without news from the regulatory body.

While I commend the CBN on the efforts and mileage gained in the last few months of promoting mobile financial inclusion in terms of educating the stakeholders however,it seems the education side of it has been focused on Large commercial Banks.

Some weeks ago, some potential players in the Nigerian Mobile Money space complained that they are not in the know of happenings in the industry in Nigeria. While about six of them are not aware of license requirements, seven of them are not even aware of a regulatory framework by the CBN. Having personally mailed out the CBN regulatory framework more than 60 times to interested parties in Nigeria and beyond, my only conclusions are that, either the CBN did not cover all the stakeholders segments adequately or these group of people are far from the industry.

Month of May also opened my eyes to some existing fringe e-commerce service providers with strong mobile elements in Nigeria that are not currently holding any electronic license from the CBN or in any way affiliated to the Banks. It was alarming to find such operators in Nigeria. The CBN licensed providers will have to compete with these shadowy firms that are already actively building agent networks and operational in major cities and yet avoiding the attention from the regulator.

Up till the last working day of May, Microfinance Banks and cooperatives societies that are supposed to act as the agent points for the industry are not even aware of such opportunities and potentials for them in the emerging industry.

Having come this far, the Central Bank of Nigeria should not treat mobile money as a technology play. It is clearly beyond technology. To make mobile money work in Nigeria, stakeholders education, cooperation and contributions is very key since the success will depend on interdependencies that can only evolve if they are well involved into the overall strategy.

Though disappointed in the month of May, hopefully we will get to see some actions in the month of June if there are no shift in approvals for commencement of pilots by license applicants.

The CBN should also make available, news and updates likes changes in the capital requirements for applicants, application submission, approvals and other necessary information should be made available online since it is easily accessible and should serve as a formal channel of stakeholders engagement.

Attend: Mobile Money agent training and Recruitment in Lagos on June 16th @ University of Lagos: http://mobilemoneyafrica.com/archives/1737

Saul Butera

Banque Populaire Du Rwanda (bpr), the Largest Bank By Branch Network in the Country, is Set to Roll out Mobile Banking by the end of August.

The new product will enable the bank’s clients to access banking and financial services using a mobile phone.

BPR’s CEO, Ben Kalkman, said that the ongoing pilot phase is showing positive results.

“The service will enable BPR’s clients to transfer, send and receive money from different places around the country in partnership with MTN Rwanda,” Kalkman said.

Mobile Banking has been successful in many parts of the world where there is minimal infrastructure development such as remote and rural areas.

The service is also very popular in countries where not many people use bank accounts. Banks expect the move to attract more clients.

Kalkman added that the Bank is in the process of linking up all their 188 branches to one network by 2011. BPR has attributed limited access to internet and electricity as the reason why their branches are not interconnected electronically.

“We cannot connect more branches than what Rwandatel and MTN (Internet service Providers) can deliver and the alternatives like satellite links are too expensive,” Kalkman said.

He added that four more branches have, this year, been linked to the same network, bringing the total number to 28.

BPR is yet to release its 2009 financial statement and according to Kalkman, the fact that data processing is done manually means that, a lot of time is required.

Netherlands based RABOBANK holds 35 percent of equity in BPR while the former cooperative members own 65 percent.