CGAP, an independent microfinance center based at the World Bank, today announced a new partnership with the UK Department for International Development (DFID) to expand ongoing global efforts to use information and communication technologies (ICT), especially mobile phones, to increase access to basic financial services for the poor. In addition to a 2006 grant from the Bill & Melinda Gates Foundation and CGAP funding, DFID will provide GBP 8 million to the CGAP Technology Program.

“Giving people access to financial services can help them lift themselves out of poverty. I am therefore pleased that the DFID-supported Technology Program at CGAP will work to improve poor people’s access to financial services such as payments, savings, loans, and insurance. The Program will also support the delivery of social protection payments in developing countries and make the transfer of international remittances cheaper and safer,” said UK Minister for Development Gareth Thomas.

Today’s announcement builds on more than six years of work on mobile banking and access to finance. In that time, CGAP has provided financing and technical advice to projects with more than a dozen providers in Asia, Africa, and Latin America to develop innovative banking solutions, and conducted in-depth policy assessments of 13 countries. CGAP has also published a series of white papers focusing on business models, client needs, and regulatory conditions, which can be accessed at http://www.cgap.org/technology.

“The idea that a mobile phone could replace a bank branch has gone from concept to reality at an amazing pace. Now with support from DFID and the Bill & Melinda Gates Foundation, it’s time to get beyond the early excitement of the past few years and shift into the build-out stage for mobile money so that millions of poor people everywhere get access to formal financial services,” said Stephen Rasmussen, manager of the CGAP Technology Program.

Communication technologies such as point of sale devices and ATMs, but also notably mobile phones, are increasingly connecting poor people to the financial grid. With CGAP technical support and Bill & Melinda Gates Foundation funding, CGAP’s project partners in India, Mongolia, Pakistan and the Philippines have created the world’s first mobile phone-enabled savings accounts aimed at reaching poor, unbanked people.

“Savings is a highly neglected financial service available to the poor, and despite what most people may think, the poor do need a safe place to save money,” said Amolo Ng’weno, deputy director at the Bill & Melinda Gates Foundation. “Mobile phones and other front-end technology solutions can bring low-cost financial services to poor people, giving them opportunities to build financial security and improve their lives.”

Notes to editors

* A CGAP survey in 2009 found there are 2.7 billion people globally who don’t have basic banking service, which matters because poor people need safe ways to send, receive, and save money.
* DFID’s best known grant for financial inclusion was a challenge grant to Vodafone which helped create M-PESA, which in three years has reached more than 8.5 million people with mobile money transfer in Kenya.

Key areas of focus for the technology program at CGAP

* Helping policymakers develop regulations that support effective use of mobile technologies for financial inclusion.
* Harnessing existing government payments and remittance flows to provide banking services to large numbers of unbanked people.
* Improving broad industry knowledge and practice in the areas of customers, agents, business models and regulatory frameworks.
* Demonstrating innovation and scale in branchless banking projects resulting from CGAP’s technical assistance and/or grant funding.

Facts about CGAP

* CGAP (Consultative Group to Assist the Poor) is supported by over 30 development agencies and private foundations who share a common mission to alleviate poverty, and is housed at the World Bank.
* CGAP serves as technical advisor to the G-20 in the G-20’s efforts to promote the use of technology to increase financial inclusion.
* Since 2007 CGAP has shaped 14 projects in nine countries with governments, telecom operators, microfinance institutions, and commercial banks.
* CGAP has led or partnered with others on market research covering more than 6,000 mobile money users in Kenya, Philippines, Brazil and South Africa.

About CGAP

CGAP is an independent policy and research centre dedicated to advancing financial access for the world’s poor. It is supported by over 30 development agencies and private foundations who share a common mission to alleviate poverty. Housed at the World Bank, CGAP provides market intelligence, promotes standards, develops innovative solutions and offers advisory services to governments, microfinance providers, donors, and investors. More at http://www.cgap.org.

About DFID

The Department for International Development is the UK Government’s department that manages Britain’s aid to poor countries and works to get rid of extreme poverty. You can find out more at www.dfid.gov.uk.

For CGAP

Jim Rosenberg

jrosenberg@cgap.org

+1 202 473 1084

Una Gallagher Pulizzi

upulizzi@cgap.org

+1-202 473 8869

For DFID

DFID Press Office

+44 (0) 207 023 0600

Obopay, a leading mobile banking and payment provider, was recently chosen by MIT’s Technology Review as one of the Top 50 Innovative Companies in the world across sectors such
as energy, computing, the Web, biomedicine, and materials. Obopay was conferred this honor under ‘Private Web Company’ category for bringing innovation in mobile payment services through its pioneering mobile payment service which is ubiquitous and highly secure. With technology developed at its Bangalore based R&D centre, Obopay products are platform agnostic and global in nature. Other companies in ‘the Web’ category included names like Google, Twitter, IBM, Adobe amongst others.

The companies on the list have been assessed on basis of their business model, deployment strategies, scalability of technologies as well as success rate.

The editors of Technology Review analyzed companies over the last year that has demonstrated their superiority at inventing technology and using it for business growth as well as for transforming the lives of people. The companies identified were the ones with most promising technologies, whether they were giant corporations or fledgling startups with initial venture capital investments.

*Elaborately on this recognition, Carol Realini, Chief Executive Officer and Founder, Obopay, said, *“Mobile banking and payments market is a greatly untapped market globally. This was one opportunity we, at Obopay felt should be capitalized on. By recognizing our efforts in making
banking access to all, Technology Review has given us a boost to innovate and develop products that will enhance daily lives of humans”. “This highly coveted recognition has reiterated our commitment towards using technology for larger interest of people especially in the emerging markets by making banking accessible to all. Moreover, our Bangalore R&D centre has played a pivotal role in development of our products, giving it the necessary cultural experience and also utilizing the advanced knowledge and technology expertise as well as growth opportunities that India offers”, *added Deepak Chandnani, President Asia & Africa, Obopay. *

Daudi K. Musoke

About Rwf60 million has been moved in daily transactions, with the use of the ‘Mobile Money’ facility, a month after it was launched, MTN Rwanda officials said last week.

Andrew Rugege, the MTN Chief Executive Officer (COO) told Business Times on Friday that daily transactions had increased since the ‘Mobile Money’ platform was launched and added that active subscribers are close to 30,000 of the over 1 million MTN mobile clients.

”The majority are active mobile money customers who have been on MTN. We have a good number who have come on board since we launched because of this value added service,” Rugege said.

“Public interest has been overwhelming. Evidently people were looking for safe, cost effective and convenient means to transact day-to-day business across the country or simply from one end of the city to another,” he added.

’Mobile Money’ is a product that was pioneered by MTN Rwanda and launched at the beginning of February this year. It is a facility which allows one to send and receive money from the convenience of ones mobile phone.

Beneficiaries can also buy airtime for themselves. According to officials, in the near future, customers will be able to purchase cash power, pay for taxi fares, purchase groceries and probably buy airline tickets.

The company spent over $2 million as initial capital investment to implement this service. It enables customers on the MTN network sign up and transact at will through the 120 agents that have already been aligned.

The telecom company which is the largest in Rwanda by market share is targeting 100,000 ‘Mobile Money’ customers by the end of 2010.

According to Rugege, “this number is achievable” despite the number challenges being faced.

“Some of the challenges include the fact that agents apprehend or the fear handling the technology. This has been addressed by providing continuous training. The other challenge is the lack of service penetration in remote areas but are continuing to expand the number of accredited agents to ensure that the product is available easily,” Rugege said.

”Agents also were overwhelmed by the volumes of transactions. Some were initially overwhelmed by the number of customers coming to them wanting to transact ‘Mobile Mobile’. The addition of new agents will spread the load more evenly,” he added.

MTN Rwanda is currently working with Commercial Bank of Rwanda as the major partner of the scheme. The company expects other financial institutions to come on board.

The National Bank of Rwanda (NBR) as the regulator of all financial institutions in the country, is supporting the product. The central bank governor Francios Kanimba said a weeks ago that NBR will endeavour to have the electronic transactions law passed. This law will regulate all ‘Mobile Money’ facilities as well.

The MTN Group pioneered mobile banking in South Africa in 2005 partnering with Standard Bank of South Africa and commercially launched in Uganda in March 2009.

Banking in Kenya is fast moving away from brick and mortar as more customers embrace
m-money services. Notably, M-Pesa, Kenya’s pioneer mobile money transfer service
operated by listed mobile operator Safaricom, has so far registered 9 million customers.
The service—launched in March 2007—has revolutionized money transfer services in the
country by providing Safaricom subscribers with a fast, safe and affordable way to
transfer money by phone. An innovative solution that enables customers to transfer
money by phone, M-Pesa, initially targeting the unbanked population, has become the
most popular and convenient money transfer service due to its low transfer charges and
availability among the rural population.

“By Christmas last year, we had 9 million registered M-Pesa customers. The fact that we
have achieved such growth in less than two years is testimony to the relevance of M-Pesa
to Kenyans”, Michael Joseph, Safaricom CEO told a media briefing in Nairobi recently.
Joseph thanked the media for highlighting the benefits of mobile money transfer service
in a society where millions of Kenyans have limited or no access to financial services, a
situation that previously forced them to rely on informal methods of money transfer.
Kenya is the first country in the world to use M-Pesa, thanks to a joint venture between
Kenya’s Safaricom and the British cellular giant Vodafone. The service has since been
extended to the Kenyan Diaspora living in the UK, who are currently able to send money
to their loved ones in Kenya using M-Pesa.

Since its launch in 2007, M-Pesa continues to grow in popularity and functionality.
Besides person to person transfers, customers can now pay utility bills and receive small
value payments like benefits and salaries from businesses. Last year, the mobile giant’s
shareholders received their dividends through M-Pesa. It is noteworthy that through these
new functionalities, M-pesa has partnered with over 40 organisations, some of which are
bank and non-bank financial institutions. Currently, 300 bank branches offer M-Pesa
services. With over 7000 agent outlets employing more than 12,000 people directly and
indirectly, M-Pesa records an average of 10,000 new registrations per day. In a move
aimed at allowing customers access to their money 24 hours a day, Safaricom last month
partnered with Equity Bank, Kenya’s fast growing commercial bank, to introduce a
service that enables customers withdraw cash from the bank’s ATMs without using an
ATM card.

Joseph reiterated the safety and security of the service, dispelling fears that customers
could lose their money.

“I assure all our customers and Kenyans at large that M-Pesa is secure. Every account is
PIN protected and in the event that a phone is lost or stolen, their money can be recovered
from their M-Pesa account once they replace their SIM cards”, Joseph assured, adding:
“The collective monies held on M-Pesa at any given time are held on trust in a bank
account on behalf of the beneficiaries and is insured; Safaricom cannot access or utilize
these funds”.

However, he reiterated that M-Pesa cannot guarantee refunds for monies sent to wrong
accounts and urged customers to always verify the phone numbers they are sending
money to. But soon, the M-Pesa platform will be upgraded to enable customers send
money directly from their phone books instead of keying in the recipient’s mobile
number.

“Vodafone and Safaricom have strict policies on anti-money laundering which are
internationally benchmarked and include appropriate know your customer procedures and
transaction monitoring”.

Joseph also clarified that the Central Bank of Kenya (CBK) has oversight and supervision
of M-Pesa and that Safaricom consults with the bank regularly, particularly regarding any
planned changes to the product.

The service has won various awards both locally and internationally. They include the
Kenya banking Awards 2007/2008, the Marketing Society of Kenya Best product
innovation 2008, the Stockholm Challenge 2008, GSMA 2008, Africom 2008 and the
World Business &development Award 2008.

Following its success, traditional banks, which were initially jittery that M-pesa was
encroaching on their core business territory have since partnered with Safaricom to offer
mobile banking services to their customers. Other mobile operators such as Zain Kenya
and Yu have also followed in the footsteps of Safaricom to launch mobile money transfer
service

Michael Joseph, the chief executive of Safaricom — the telecoms operator that owns M-pesa — said the operation has reported suspected or actual fraud in 0.006 per cent total transactions since its inception three years ago.

“Suspected or actual fraud stands at less than 0.006 per cent of all recorded transactions with a downward trend,” said Mr Joseph.

He declined to disclose the exact figures, saying Safaricom had shared the data with regulatory authorities who have the mandate to receive such reports. M-pesa has handled an estimated Sh350 billion since it was launched three years ago.

Increasing attacks

The revelation of M-pesa’s loss comes in the wake of reports that the financial services industry has come under increasing attacks from cyber criminals since Kenya entered the world of high speed internet with the landing of fibre optic cables in the country mid last year.

The financial services sector loses more than Sh100 million to cyber criminals every month, according to the Central Bank’s anti- fraud department.

Anti-fraud experts have feared that M-pesa’s unparalleled success in the money transfer business would catch the attention of cyber criminals and expose the system to huge losses, but the revelation that the money transfer platform has lost less than one per cent of the total cash moved should help clear any concerns over its safety.

Industry sources said M-pesa’s extensive network of 16,000 agents and nine million customers presents a massive security challenge to its managers and that the low level loss is an indication of how far the company has invested in securing the system from cyber criminals.

M-pesa said the number of attempted fraudulent transactions has been rising since last year, but most have been unsuccessful.

“A month does not pass without a new form of fraud. These people are very innovative,” said one agent who declined to be named.

The latest form of fraud targets agents and Safaricom.

The criminals send themselves self-made M-pesa messages indicating that the recipient can withdraw up to Sh35,000, the maximum amount allowed for a transaction.

Subscribers, however, hold up to Sh50,000 in their virtual accounts.

The messages look exactly like the authentic M-pesa texts, but come with made-up codes that have helped agents expose the fraud.

A bit of 2010 good news for Mobicash in its seemingly endless innovation, is the proudly announcement of our mobile secure online payment which propose a more elegant way to look at electronic security that renders the value of card account information useless to attackers and brings assurance to consumers.

85% of Internet users are concerned about giving personal information such as their credit card over the web, and it is still the #1 barrier to online purchasing. Identity theft continues to be a threat, with e-mail phishing scams on the rise and key logging a growing menace!!!

The seemingly never-ending barrage of fraud and identity theft on the Internet last year has continued to drive consumer fears skyward. However, consumers are still willing to increase the amount of personal business they do online, provided banks and other online services offer them strong authentication.

In addition to the security risks in online card payments, e-commerce’s reliance on the card has resulted in the exclusion of un-banked populations. As the internet continues its expansion into developing countries, a solution allowing un-banked populations to participate in the e-commerce economy is needed. In the past internet has been a developed world luxury, this is changing quickly and online payment mechanisms must adapt to offer the same web-based services to un-banked online shoppers.

Mobicash payment platform was born out of thinking out of the box and taking another approach? What happens when we throw out a lot of today’s assumptions around card payments and e-commerce and assume that the merchant shouldn’t have to store the data at all? What if we never even handed this sensitive information over to the merchant in the first place?

The MobiCash e-commerce system is a secure online payments solution protected by Very Smart Authentication (VSA™), which allows merchant websites to accept payments using MobiCash payment instrument. This solution can be easily integrated into all online commerce systems and websites.

VSA™ is based on Tagattitude’s Near Sound Data Transfer (NSDT™) technology, which transforms any mobile phone into a secure means of making proximity transactions.

With a few clicks (and an NSDT™ “chirp”) customers can now make purchases online conveniently and in complete security. This new function revolutionizes online shopping by introducing a critical security mechanism and opening e-commerce to the billions of un-banked mobile phone owners.

The mobile phone is key to solving both security and accessibility issues faced by e-commerce. Practically 100% of banked online shoppers own a mobile phone. In addition, over 3 billion mobile phones belong to un-banked individuals. Getting a mobile phone is infinitely simpler than opening a bank account and getting a payment card.

Mobile phones are vastly prevalent around the globe: over half the world’s population owns a mobile! Countless studies show that the mobile phone is the object people most commonly have in their possession. People would even rather carry their phone than their wallet.

The mobile is personal, permanent, and benefits from an extremely elevated level of security (the SIM card). These characteristics make it the ideal device for payment and authentication.
Security

Internet fraud has developed into a highly sophisticated science used to power the multi-billion dollar identity theft industry.[1] It is practically impossible to ensure that static information shared over the web stays protected and there is no way of knowing who is actually making an online payment.

The mobile phone resolves this issue by providing an independent (out of band) channel through which to communicate with the person requesting a transaction. MobiCash’s e-commerce solution makes it impossible to complete an online transaction unless the user’s phone is physically present and the correct identifier and pass code have been entered. Users can link their card to MobiCash to avoid entering vulnerable card information online and protect their bank account from hackers.
Accessibility

E-commerce mobile payments open the world of online shopping to billions of un-banked mobile phone owners. The MobiCash mobile payments platform is designed to offer un-banked populations access to basic financial services and electronic transactions. Those individuals receiving salaries, money transfers, pensions, or loans on their mobiles finally have the possibility of spending it online. Customers can also load their MobiCash account with cash at a cyber café or with a MobiCash agent to be able to make a purchase on the web.

Extending MobiCash to the world of online payments brings a whole new dimension to the MobiCash platform; many of our partners are working in markets where e-commerce has not been developed due to lack on online payment mechanisms. Our online payment solution will change this and spur the growth of e-commerce in these underserved regions.

In many countries, even customers who do have payment cards do not have the possibility of using them to make purchases online due to high fraud risks. However, with MobiCash online mobile payments, the risk is eliminated and e-commerce can take place in complete security.

Very Smart Authentication (VSA™)

NSDT™ technology is used to power the VSA™ internet authentication solution. On a website VSA™ authentication is used to verify the presence of a user’s mobile phone. An NSDT™ cryptosound is sent to the web page as soon as the user answers their phone. When the server picks up the sound via the mobile, it proves that the phone is physically present and the authentication is completed.

How it works for Online Payment?

At checkout, the customer is redirected to the MobiCash Online Payment System server using an SSL link. They arrive on the merchant payment page and simply enter their identifier (typically the mobile phone number) and a secret pass code. MobiCash verifies this account and the pass code and launches a VSA™ authentication procedure towards this phone to sign the transaction.

VSA authentication pop-up

The outcome of the VSA™ authentication procedure is communicated to the merchant website for the approval or rejection of the purchase. The following diagram describes the interaction between the various pages during the MobiCash online payment process:

Speed

E-commerce transactions are made 3 times more quickly than with a banking card without compromising security integrity. Even relative to SMS or USSD based mobile authentication solutions, VSA™ is substantially more rapid and convenient. Studies show that 67% of online shoppers abandon the purchase before completing the checkout process.[2] Faster and less tedious transactions will reduce this percentage, thereby contributing to an even more flourishing e-commerce economy.
Simplicity

Unlike online payment systems where shoppers must locate, remember, and enter several pieces of information, when paying with MobiCash all they need to know is their phone number, pass code, and how to answer a phone call. With MobiCash, illiteracy and vision impairment are no longer major obstacles for online payment. The checkout process is transformed from tedious to effortless.
Instant availability

MobiCash online mobile payment solution works instantly on any phone in the world. There is nothing to download on the phone or to modify on the handset. Furthermore, MobiCash is completely independent of the telecom operator. Any phone that can receive a phone call (all phones by definition) can be used to sign e-commerce transactions with MobiCash. This means that there are zero hardware deployment costs no heavy enrollment campaign.

According to the most recent DFID UK Remittance Market Report, the UK is one the top 10 remittance-originating countries worldwide, with approximately GBP2.4 billion recorded outward remittances annually from the UK to the developing world. Mobile Union is taking a new approach to remittance by focusing on a massive under-served market segment: people who want to send smaller amounts of money without being penalised with high fees. Mobile Union’s service enables people to send money safely and securely from their home or workplace without the need to visit a retail location; immediately stripping out the costs in time and money associated with a retail infrastructure and passing on these savings to customers. After registration online, with a user-friendly, simple and easy interface, customers can then send money securely using their debit card. Within seconds, the recipient is notified by SMS message that money is available for collection, leveraging the ubiquitous reach of mobile phones throughout the developing world.

Steven Faulkner founder and Commercial Director of Mobile Union commented:”mtxpress makes sending money home fast and convenient (http://www.mtxpress.com). A combination of simple pricing and exchange rates directly linked to the Central Bank rate makes it easy to understand the true cost of sending money home.”

Security is of paramount importance to Mobile Union and there are multiple bank-grade security checkpoints for both the sender and recipient of the remittance, enabling customers to have certainty throughout the transaction lifecycle leading to complete peace of mind. In addition, Barclays Bank is providing the day-to-day banking and merchant services and Cybersource, the world’s first online payment management company, processing debit card transactions.

This week’s launch focuses on the UK to Bangladesh market, where Mobile Union has collaborated with BRAC Bank, one of the leading banks in Bangladesh. This partnership will enable recipients, without the requirement of a bank account, to utilise the bank’s extensive network of locations across the country to receive money. However, it is also possible to credit accounts maintained at BRAC Bank.

This template is one that Mobile Union will continue to use as it rolls out its service to other parts of South East Asia and West Africa later this year, providing an accessible service to the underserved.

Speaking about the launch of the service, Randall Harper, CEO for Mobile Union said: “The UK’s remittance market continues to grow, but little attention has been given to people who want to send smaller amounts of money without incurring the high fees. Through our mtxpress service and its secure SMS platform, we are able to provide this under-served segment of the market with a world-class service that is convenient, instant and great value-for-money.”

NAIROBI – About a year ago, Muqtar Ali’s brother was shot dead by gunmen in the busy Bakara market of Somalia’s capital Mogadishu, and his $200 in cash was stolen.
Ali says that if a new mobile money transfer service unveiled by Somalia’s biggest mobile telecoms firm last month had been in place then, his brother would still be alive.

Telecoms firm Safaricom pioneered mobile money transfers in neighboring Kenya and now has 8 million users. Besides transferring cash to friends and relatives, people pay power bills and even receive dividends from some companies.

Hormuud Telecom, the biggest network in Somalia with more than a million subscribers, says it designed the software for its SAAD money transfer service, but was helped by Safaricom workshops and consultants.

The new service is expected to cut security risks posed by carrying huge wads of the Somali currency around various open markets in the battle-scarred south and central regions of the country.

Once clients have registered for the service, they can deposit cash with the mobile phone company and credits are loaded onto their phone. They can then send to other people signed up for the service at the press of a button.

“I was very sad when I heard my worst news, that of the death of my brother. He was transferring some cash to my shop when the robbers shot him,” Ali said.

“I believe the life of my brother would have been saved if this service existed then.”

LIFELINE

Despite 19 years of anarchy in the Horn of Africa nation, some businesses have thrived and the country’s mobile phone firms provide a crucial, cheap lifeline for Somalis to stay in touch during the frequent bouts of heavy fighting.

Money transfer firms are another backbone of the economy as remittances from the large Somali diaspora, estimated at around $1 billion a year, keep many Somali families alive.

“This is the lifeline of the whole economy … and they are the future banks of Somalia,” Central Bank Governor Bashir Issa Ali told Reuters.

Ali said the introduction of Hormuud’s mobile money transfer services alongside the remittance companies would only improve cash distribution throughout the country, where 1.5 million people rely on food aid to survive.

“Somalia has been saved by the money transfer companies and the telephone companies,” he said. “This is a great thing for the payments system.”

Hormuud’s money transfer system works with U.S. dollars, rather than the Somali shilling, and users can transfer up to $3,000 a day throughout southern and central Somalia.

Businesses prefer transactions based on the dollar and other regional currencies such as the Kenyan shilling, UAE dirham and the Saudi riyal, to avoid the problems associated with an extremely weak Somali shilling.

“They can send and receive cash through this system locally,” Hormuud’s spokesman Abdirashid Ali Aynaanshe told Reuters by phone from Mogadishu.

“The system is safe, and the probability this cash can be in danger is less than carrying cash or checks in the pockets or bags while traveling in the country,” he said.

Halima Mohamed, based in the southern port of Kismayu which is held by al Qaeda-linked rebels, says she now uses her phone as a bank account and sends money to business associates as far as Baidoa in central Somalia.

“Nowadays, I am able to send up to $3,000 from my phone to people in other regions without the person next to me knowing,” the store owner said. “It is good for our safety since we live in very violent times and can lose all our money to militias.”

Vodafone,last month signed an agreement with Afric Xpress (AX) to introduce txtnpay services which would allow Vodafone customers to purchase airtime anytime, anywhere via sms message to short code 1075.

The mobile phone-based secured and convenient payment system, created by New York-based Afric Xpress, would also enable registered users to send money to anyone with a mobile phone, pay utility bills, buy pre-paid airtime, check bank accounts and purchase goods and services.

Mr. Nvalaye Korouma, Chief Executive Officer of Afric Xpress, who signed on behalf of his company, said the prospective users would have to register with any of the over 400 agents across the country and create an electronic wallet into which they would make a flexible deposit.

“To open a txtnpay wallet one needs to fill the physical registration form and present a valid photo ID copy for verification and a text message with your registration details will be sent to your phone,” he said.

He said the approved agents of txtnpay were banks, internet cafes and other outlets that were already in partnership with AX to offer services, adding that these partners were carefully selected after a rigorous screening process.

Mr. Korouma said from early 2009, when AX started operations in Ghana, it had processed more than half a million transactions via its txtnpay platform, adding that the agents could confirm the security and efficiency of the system.

Mr. David Venn, CEO of Vodafone Ghana, said he was confident that the service was innovative and would ensure convenience and safety for its customers.

“Now when your credit finishes at even 02.00 hours in the morning you can send a text message to 1075 at the standard sms cost and receive credit on your phone instantly,” he said.

Afric xpress is an electronic payment solution provider focused on mobile payment systems particular in collaboration with telecom operators in Africa.

Ghana is its first country of operation in Africa.

Global payments technology company Visa International is courting mobile phone network operators with a view to tying up partnerships that could give the company a foothold in the emerging mobile phone banking services, the group’s general manager for Sub Saharan Africa has said.

Charles Niehaus says the company, which develops plastic card technology for use by banks and retail sellers, is faced with an important choice of “whether it should align its products or compete with the new mobile phone banking and money transfer services.”

Speaking last week when he announced that Kenyan holders of Visa International branded plastic cards had clocked two million, Mr Niehaus said the company sees mobile technology as an opportunity to expand its customer products rather than a threat to its existence.

“Visa has also come up with a mobile money transfer solutions, we are talking to several international mobile phone companies and will reveal some of the new products in the next three to four months,” said Mr Niehaus.

The company has, however, not entered into talks with any of the four local mobile network operators.

Safaricom’s ‘M-pesa’ earned the distinction of being the world’s first mobile phone based money transfer operator when the Kenyan telco rolled out the service in 2007.

Since then the service has attracted over eight million users while Zain, operating in over a dozen African countries, has also launched the ‘Zap’ service as a cross-border money transfer solution.

Both M-pesa and Zap have signalled their inclination to outgrow basic money transfer service by adding on other e-commerce solutions, helped by the cut-throat competition in the market.

While credit and debit card usage in the developed world is widely popular with individuals even holding multiple cards, Africa lags in its adoption of plastic money and providers such as Visa and MasterCard see the continent as a strong growth frontier.

Mr Niehaus says Visa’s 50-year experience and brand name as a payments solutions provider gives it an edge when negotiating for terms to either team up with handset manufacturers or network providers to offer mobile banking services which have become a hit with a majority of Africa’s unbanked.

The continent has over 290 million mobile phone users but only a small fraction has bank accounts, providing a huge potential for any player who cracks the formula for getting them in the formal financial system.

Only about a quarter of Kenya’s estimated 17 million strong bankable population have bank accounts while over 35 per cent of these rely on informal financial service providers with the rest totally excluded from the formal financial system.

Total purchases in Kenya using Visa cards last year topped Sh250 billion ($3.3 billion); out of which a tenth were transactions made using credit cards while 90 per cent were payments made through debit cards.

Twenty two out of Kenya’s 43 commercial banks use the Visa card technology which has been available locally for 19 years, with 80 per cent of Kenya’s plastic card holders having Visa International branded cards.

The company offers a seamless payments system network that is usable in 200 countries worldwide, and is present in over 45 African countries.

Central Bank of Kenya statistics show the country had an estimated 2.5 million ATM, debit, credit and charge card holders by June 2008.

New laws

I&M Bank became the first institution to acquire a licence from Visa to offer a complete online based e-commerce platform following last year’s enactment of laws allowing electronic transactions in the country.

“We are in talks with other banks as well, the interest for e-commerce payment solutions is big,” said the Visa International country manager Victor Ndlovu.