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New frontier: How to reap from mobile banking

By Mumbi Kinyua | Published Wed, November 8th 2017 at 11:12, Updated November 8th 2017 at 11:30 GMT +3

The mobile money scene can be described as a two-horse race between products developed by banks and those by telcos. However, mobile money has allowed financial institutions to offer services fast and with ease.

It is now achieving mass market adoption in all corners of sub-Saharan Africa, enabling millions of people to access financial services for the first time and contributing to economic growth and social development. Advances in the functionality of mobile phones and widespread mobile network technologies all go to guarantee a superior customer experience.

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According to the Communications Authority of Kenya (CA), in the 10 years that mobile money has been in existence, more than 26.3 million people and 500,000 businesses and corporates subscriptions have been made on platforms in Kenya alone. Between April and June 2017 mobile money platforms handled a whopping Sh1.2 trillion.

The CA statistics go ahead to show that mobile money users made Sh480 million withdrawals and deposits in the three months, and purchased goods and services amounting to Sh692 billion using mobile phones. On the other hand, the number of mobile commerce transactions stood at 316.5 million while peer-to-peer transactions stood at Sh541 billion.

Low cost

This popularity of mobile money solutions lies in their simplicity and relatively low cost. KCB Bank was the first to pioneer mobile banking in 2005 with the introduction of KCB Connect, a platform that offered SMS-based mobile services. In 2008, the bank introduced KCB Connect II which was followed by KCB Mobi Bank in 2011.

In 2013, KCB pioneered in providing virtual account opening via mobile, Mbenki. During the same period, Mobile Loans were introduced to offer micro loans to KCB customers who had been with the bank for more than six months. Today, KCB mobile banking has more than 2.5 million customers. 

KCB’s continued innovation led to the launch of KCB App in 2014. This is the App that hosts KCB MyKash, which was introduced this year. KCB MyKash enables customers to pay, borrow and save through their mobile phones.

But what is most outstanding about KCB MyKash payment solution is that users can move funds directly from their account into a merchant’s till, Agent Number and Pay Bill without having to put the money in their mobile accounts first. This is not only cheaper but more convenient. KCB MyKash is real-time, available round the clock and allows a user to transfer as low as Sh100 to as high as Sh1 million.

Economic impact

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According to the World Bank, there are approximately 60 million mobile money users in the world, which means that almost one in three is a Kenyan and the emerging social and economic impact has been remarkable. In Kenya, three factors are key to the growth of mobile payment solutions. This includes security, market demand and a push towards integration.

The availability of secure payment facilities is most critical and is a major differentiator that all entrants to the African market will have to take into account.

Borrowing from KCB MyKash, the success of mobile money in Kenya should be a source of national pride: it gives the country a global profile, which is only matched by the successes of its long-distance runners.

Businesses can now operate more effectively, shop-owners don’t need to carry a lot of cash, or to stand in long queues at banking halls to transfer money to suppliers. Urban dwellers no longer need to make overnight trips to their rural homes to pay their children’s school fees or meet other obligations.

In 2015, Microsoft founder and philanthropist Bill Gates predicted that with the growing digital banking sector, handsets and mobile technology would define banking in Africa, especially in those communities where the cost of banking and a lack of infrastructure remain major barriers to financial inclusion. Gates said that the mobile phone is the communication tool of choice in Africa where competitors are scrambling to tap into the “unbanked”.


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