Equity starts issuing SIM cards, readies for national rollout

Eqiuty Bank

Nairobi; Kenya: Equity Bank has started issuing SIM cards to its customers as it prepares to roll-out the Thin SIM technology in Kenya. The lender, the largest bank in customer numbers, through its subsidiary Finserve Africa Limited, is set to pilot Thin SIM technology in Kenya, using its Equitel brand.

Already, more than 200,000 customers have taken up the cards at 10,000 daily, the bank’s Chief Executive Officer James Mwangi announced on Thursday during an investor briefing.

What has made Equity’s entry interesting is the Thin SIM technology, which it is employing to address the typical Kenyan subscriber’s low tendency to switch providers due to the utility of value-added services such as mobile money.

Many Kenyans can only afford a single-SIM mobile phone, which they use as a primary line. The slim SIM card is a 0.1mm-thick film placed on a subscriber’s original SIM card, effectively turning the device into a dual-SIM phone.

The Communications Authority of Kenya (CAK) and the Central Bank of Kenya have given Equity Bank the go ahead to pilot the technology. However, while the public has been eagerly waiting for the launch of Equitel, there have been frequent interruptions including that from a parliamentary watchdog and Safaricom. “We have logged out of Equitel for the moment because we are still not sure we can cope with the numbers,” said Mwangi.

Equity management is also worried that huge interest in the Thin SIM has the potential of disrupting the normal banking hall business. He denied that Parliament had stopped the full roll out of the Thin SIM technology, stating that CAK was yet to receive any such request from the House.

Equity Bank says it will not charge subscribers to send money on its mobile banking platform that will likely stir the market. Safaricom, Kenya’s largest telco charges its customers between Sh1 and Sh110 to send cash on M-Pesa.

Also, the bank has capped the cost of withdrawing any amount at Sh25, compared to between Sh10 and Sh330 charges on M-Pesa. This could set the stage for a price war bound to see the cost of money transfer reduce significantly.

Virtual bank

Equity is preparing for a national launch for its mobile money transfer service Equitel this month despite protests from Safaricom on the basis that the Thin-SIM technology had the ability to quietly steal data from the main SIM, including the secret personal identification numbers and pass them on to a third party. Also, two court cases have been filed in an attempt to block Equity’s Thin SIM technology from taking off.

The mobile phone proposition by Equity will ride on the Airtel network. “This component of Equity Bank provides an agile, convenient and secure mobile channel that seamlessly integrates and converges bank accounts and other financial products and services while providing value added telecom products and services,” said Mwangi. Equity has budgeted Sh2 billion to market, create public awareness and advertise the Thin SIM technology.

Creates convergence

In its Equity 3.0 strategy, the bank intends to create platforms that will enable customers engage in self-service. This is when all processes are digitalised creating a virtual bank.

“In future, we will replace the debit, credit cards and automated teller machines with a point of sale mobile phone. The Government has now recognised digital signatures meaning we can now go paper less,” said Mwangi. With a Mobile Virtual Network Operator (MVNO) licence, Equity Bank will be able to reduce cost of delivery as it creates convergence between telecoms, banking and financial services.

“With an MVNO, there is no capital expenditure in terms of investment and there is no fixed cost. It is a variable cost because we do not own the phone and cannot therefore maintain or depreciate it,” he said.

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