Africa: Banks and telcos mobilise for money
There’s no doubt mobile money is Africa’s future, but who is best equipped to benefit most: the telcos with their networks, or the banks with their products and service? And why are they fighting when they could be cooperating?
In September, the Communications Authority of Kenya (CA) made a decision that could transform the country’s mobile money industry forever. The CA gave Equity Bank, Kenya’s second largest bank by assets, permission to roll out Thin Sim, a new sim-card mobile banking product with Indian telecoms company Bharti Airtel. Equity’s subsidiary Finserve is trialling the product on a one-year pilot to make sure it is secure.
Thin Sim is an ultra-thin sim card that mobile phone owners will be able to put on top of their existing sim-card. Customers will then be able to access Equity’s mobile money product without making any changes to their mobile phone contract. Furthermore, the new service will be cheaper than Safaricom’s alternative. Equity Bank claims that it will charge a maximum of 25 Kenyan shillings ($0.28) for each transaction. This undercuts Safaricom, which charges KSh110 for transfers to other Safaricom customers and KSh275 for payments to non-customers. Singapore-based Taisys Holding will provide Equity with the slim sims.
“There is no sufficient evidence to block in the Kenyan market the entry of the Thin Sim,” the CA wrote on Twitter following its decision. “Save for the inherent vulnerabilities of all sim cards, there are no specific and confirmed vulnerabilities arising from use of Thin Sim.”