[UgaBYTES] Mobile Money transfer to go regional

[Mwathi Francis]

Zain Telecom company is introducing a money transfer service across East
Africa.

Mr. Maurice Newa, the Zain chief commercial officer, said the mobile company
was in discussions with the different central banks about the possibility of
transferring money across borders the same way voice is today transferred
without any extra charges.

“The technology is not a problem. It is the regulatory issues and right now
we are talking to the different central banks about how we can transfer
money across the borders,” Newa said as the company announced its trustee
partnership with Standard Chartered Bank Uganda last week.

Newa said that coupled with its One Network cross-border service, Zain's
mobile banking platform will be the world's biggest cross-border mobile
commerce service.

“With ZAP, Zain customers will soon be able to make cross-border payments
and transfers between Kenya, Tanzania and Uganda with no extra charge,” Newa
said. One Network allows travelling customers to move across geographic
borders without roaming surcharges.

Zain is due to launch ZAP, a mobile commerce service that will allow
Ugandans transfer money internally. Already operational in Kenya and
Tanzania, ZAP offers accessible packages of mobile banking features
currently available on the African continent.

“We have finalized regulatory issues with Bank of Uganda, which has allowed
Zain to use the full suite of mobile commerce services,” Mr. Yesse Oenga,
the Zain Uganda Managing Director said.

“That means that the ZAP service with Zain will not be limited to money
transfer but will also include mobile airtime transfer, mobile banking,
mobile merchant payment and cross-border money transfer,” he added.

The partnership will enable Zain customers to use their mobile phone to pay
bills, pay for goods and services, receive money and send money to friends,
family and business partners.

The services also helps one deposit and withdraw money into/from their own
bank account, check their account balance and keep track on payments and top
up their own airtime or top up someone else's.

“We are extremely excited to be partnering with Zain on this ground-breaking
initiative,” Mr. Lamin Manjang, the Chief Executive Officer Standard
Chartered Bank said.

The ZAP service in Uganda has already been activated with over 1 million
Zain customers possessing the service in their phone menus. Zain has enabled
all existing SIM cards over-the-air. For those whose service is not yet
activated, they will have to register to use the service.

“All a customer has to do now is register their details at a registered ZAP
agent, Zain outlets across the country and at the Zain headquarters in
Kampala,” a press statement reads in part.

Customers will also benefit from being able to access the service 24 hours a
day, seven days a week through their handset menu and enjoy the convenience
of having access to cash anytime, anywhere.

To register, one only needs their valid ID. Zain will then provide the
customer with a virtual bank account, which will allow them to use their
mobile phone in much the same way as a debit card and manage their money
through their handset.

In related news the MTN mobile money transfer service in Uganda has moved
over sh5b in about 180,000 transactions since its launch in March.

The telecom giant disclosed that over 40,000 people mostly those doing
upcountry transactions had subscribed to the service.

Richard Mwami, the head of mobile money, indicated last week that the
subscriber numbers for the service were steadily growing.
This, he said, was because the service offers an easy payment mechanism akin
to traditional banking, which many people did not have access to before.

"The educative part is critical and it takes time for people to understand
that their mobile phones can act as a bank and that they can make payments
immediately with their monies safe all the time," said Mwami.

At the time MTN launched its money transfer service, uganda telecom also
announced a partnership with Redknee Solutions Inc. to provide mobile money
solutions.

ZAP, a mobile money product of Zain, already operational in Kenya and
Tanzania, is also set to become active in Uganda in days.

According to telecom experts, the mobile money transfer service should in
the future be able to have a regional platform especially if the East
African Common Market takes shape.In countries where the mobile money
transfer service pioneered, the facility has transformed the
telecommunication landscape because of its convenience and ability to tap
the un-banked population.

It has also spurred rural economies by making more money available to the
rural population especially farmers and small scale traders who previously
found it difficult to improve their businesses due to delayed payments."In
Kenya, a similar service (M-Pesa) has been instrumental in accelerating
rural economic growth by between 4-5%.

"We expect that MTN mobile money will also help accelerate Uganda's economy
by similar margins" said Mwami.

MTN mobile money charges a smaller percentage compared to what other
conventional service providers charge.

Mwami explained that to transfer sh10,000 and above, traditional money
transfer providers charge sh13,000, while the MTN mobile money service
charges sh800.

MTN has over 7,000 mobile money outlets countrywide.Less than 20% of the
entire Ugandan population is involved in formal banking.

This has left telecoms with a great opportunity to cash-in on the huge gaps
left by the formal banks through innovative products like mobile money
transfers.

But the success of mobile money brought new challenges for MTN.

It reportedly faced a sagging network under a fast-growing subscriber base.

This required fresh investment into network upgrade.

When telecoms fully integrate the service into their operations, it will
come as an alternative for payment of utility bills, payment of multiple
users for salary and wages and petty cash and also the ability to interface
with one's bank account.

Sources: East African Business week & New Vision

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Francis Mwathi
Support Community Facilitator
UgaBYTES Initiatives (www.ugabytes.org)
Telecentr.org (www.telecentrecommunity.ning.com)
Tel: +256 414 370163
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Skype: francis.mwathi
E-Mail: mfrancis at ugabytes.org