Kenya continues to lead the wayEssar Telecom Country Manager Atul Chaturvedi announces new partnership with Equity Bank CEO James Mwangi.Kenya – the Silicon Valley of BankingKenya is at the threshold of fast-paced growth next year, according to the World Bank. This yearKenya repeatedly demonstrated leadership in Mobile Money and this latest announcementfrom Essar’s YU and Equity Bank reaffirms Kenya’s status as the “Silicon Valley” of mobilebanking and payments.Over 70% of all households in Kenya use mobile money. Each mobile network operator offers amobile money service. Safaricom and mPesa are the best known, but there are others includingYU Cash by Obopay and it is becoming a very competitive market which is pushing providers tobring mobile money services to the next level in order to meet demand and compete forcustomers. Yesterday, YU and its innovation partner, Equity Bank, upped the ante byannouncing new functionality made possible by offering mobile money customers the ability toaccess their service directly from a full service Equity Bank account. This is a concept that we atObopay call a “mapped bank account”. It provides the customer with the choice of a full servicebank account, complete with mobile money services, with the ability to transact directly fromthat account, rather than through a separate mobile account. .
How does Mobile Money work in Kenya?Mobile Money is transforming Kenya. 3 years ago it was a typical cash centric emerging market wherebymost consumer transactions were cash based. Then almost overnight things changed when Safaricomoffered its customer’s a “mobile wallet” to store money, send money, and pay for things directly fromthe phone. Other mobile operators have now followed suit and provided similar capability, and it hasbecome a must have service.Here is how it works - users sign up at a retail location where they previously went to purchase mobilephones or prepaid airtime minutes. Once enrolled, they can load money directly on their phone bygiving participating agents/retailer cash over the counter. If they need to withdraw money, they can goto any authorized agent/retailer and get cash out of their mobile phone account. The first thing peoplein Kenya did was use the service to send money to family members – lots of people work in the cities buthave family members in rural areas. Since there are retailers supporting this everywhere – it was thefastest, safest, and most reliable way to send money overnight. It started with money transfer but nowpeople use their mobile money to buy prepaid minutes, pay bills, buy online, and buy at stores, as a wayto save money and enhance their personal security by removing the need to carry cash.Statistics from Central Bank of Kenya indicate that remittance flows in September, 2010, increased by12.6 per cent to $ 58.6 million, from $ 52 million in August 2010 and were 17.1 percent above thecumulative 12 months average of $ 50 million a month.What is a mapped bank account?Before today, most Kenya users of mobile money were limited to using money in the mobile accounts. Ifthey had bank accounts it wasn’t easy to use the money they already had in the bank. Also, if theywanted to “upgrade” and have more services from a bank, which many of them do, that wasn’t easy.Some providers allowed electronic transfer between bank accounts and mobile accounts – but thatcould take an extra step, take hours or days, and could involve extra fees. The term we use at Obopayfor this type of money movement is a “linked bank account” or a “linked card”. This is very useful sinceusers may want to have my different accounts “linked” so I can move money between them.
At Obopay, we think “linked accounts” are necessary - but insufficient for many users. Users want theoption to have full service banking and to transact directly off of their preferred account – and wedeliver it via a “mapped bank accounts”.A mapped account is a traditional bank account “mapped” to my mobile. The account has all thefeatures the bank wants to offer AND allows the user to receive, send, or pay directly from that bankaccount. In addition to allowing the user to also have direct access to traditional bank accounts fromtheir mobile. It also allows instant money movement between the traditional bank account and themobile account. So if a user wants to use both – then they have lots of options in how they manage andspend money.
Obopay, the global leader in mobile payments, is an innovator in both mobile and mapped bankaccounts. It is especially important in markets like Kenya where people often don’t live near banks. Now,with Mapped Bank accounts they can have all the services they need or want from a bank via a mobilephone.Mobile accounts have brought limited banking to large underserved communities, mapped bankaccounts in combination with mobile accounts will add full service banking to these same largeunderserved communities.Obopay could not have accomplished this without great partners like Equity Bank and YU. We are proudto work with them to bring the full power of mobile and banking in an inclusive way.Links to Press Articleshttp://www.capitalfm.co.ke/business/Kenyabusiness/Banks-plan-to-tap-mobile-money-5135.htmlhttp://www.businessdailyafrica.com/Corporate%20News/Equity%20links%20up%20with%20Essar%20for%20diaspora%20cash%20transfer/-/539550/1065390/-/sw7h4t/-/