Equity Bank to launch mobile services in July
Equity Bank will launch its much-hyped Mobile Virtual Network Operator (MVNO) in July.
The bank is largely seen as eyeing a piece of the fast-growing cellphone-based financial services including Safaricom’s M-Pesa, the largest service in the segment.
Equity at the same time has tapped the former Communications Commission of Kenya (CCK) Director General John Waweru to head the Equity MVNO as its executive chairman.
The appointment of Waweru appears to be an indication of the bank’s readiness to do battle with the other telcos — already in the market—as he is an industry insider with much knowledge on the mobile money transfer segment of the industry.
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He was at the helm of telecoms industry regulator when Safaricom was piloting M-Pesa in Kenya and after the service officially launched it to the market.
The bank said it plans to initially convert its nine million customers before marketing the product to new customers.
The bank’s customers will by July be issued with new SIM cards for the MVNO that can operate alongside conventional SIMs.
Equity Bank Chief Executive James Mwangi said the launch of the bank’s MVNO would see the institution commence its next phase of growth to 2014, which is dubbed Equity 3.0 where it said it would no longer be competing with banks but with cash.
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He said the institution has its eyes on controlling retail payments, with plans to increase use of cashless payments in a market where cash payments account for over 98 per cent of all payments.
“We are not competing with telcos, the space is too big,” he said during an investor briefing on the progress of the roll out of the MVNO in Nairobi yesterday.
CCK issued the bank with a licence to operate an MVNO in March.
It will use Airtel Kenya’s network – which has 60 per cent excess capacity – to roll out its network. Mwangi said the firm would try to reduce cash transactions that have made money transfers expensive. He said elimination of cash transactions and handling could reduce the cost transferring money by as much as 50 per cent.
“The cost of money transfer will be one per cent of the value of the money being transferred… the cost is capped at Sh25 and therefore if you send Sh100, the cost will be one shilling but the cost of sending Sh1,000 and other higher amounts will be Sh25,” said Mwangi.
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“This is in comparison with the current rates of 16 per cent of money being transferred.” He added that the bank would charge an interest rate of between one and two per cent per month on borrowings made on its virtual platform.
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Equity Bank mobile services Safaricom M-Pesa