Equity Bank starts mobile pay service to challenge Safaricom
20 July 2015, 21:45
Nairobi - Equity Bank says it would press ahead with offering mobile phone transfer services, stepping up competition to telecoms firm Safaricom's money transfer product.
Equity Bank, the biggest in the east African country by
depositors, will run its service through its telecoms unit
Equitel and use the network infrastructure of Kenyan telecoms
firm Airtel, the local arm of Bharti Airtel.
The service has already attracted one million subscribers
during a trial run since October, said Equity, which has banks
in Uganda, Tanzania, Rwanda and South Sudan.
"We will be leveraging on the bank's presence across the
region to roll out Equitel and this is the basis of optimism of
attaining a subscriber base of over five million SIM cards by
end of 2015," James Mwangi, Equity Bank's chief executive
officer said in a statement.
The money transfer service will enable customers to take
loans, carry out cross border money transfers, receive insurance
and investment services and send and receive money from other
commercial banks and other mobile money transfer services.
Safaricom, Kenya's largest telecoms company, launched its
M-Pesa phone-based financial services product in 2007 and now
has about 23 million customers who use M-Pesa to pay for goods,
pay bills, make deposits and withdraw cash from authorised
Several commercial banks also run mobile banking services
through Safaricom's network.
Safaricom, whose revenue from the M-Pesa service alone rose
23 percent to 32.6 billion shillings ($318 million) in the last
financial year to end-March, said it welcomed the new product.
"We welcome competition; it is a true indicator of the free
and robust operating environment we have in Kenya," Bob
Collymore, Safaricom's chief executive, said in a statement.
Although Kenya has seen an increase in the population's
access to financial services in recent years, about a third of
the population still lacks access, the central bank says.
Analysts said Equity's mobile pay service could have offered
even more benefits to rival Safaricom's lead in the sector.
"I think what would make it a much more compelling product
is if you are able to integrate that with a lot more payment
platforms ... let's say I can pay for water, electricity,"
Daniel Kuyoh, research analyst at Kingdom Securities.
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