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The evolution of mobile commerce

06 Oct

The balance of power within the money transfer market has tilted further in favour of mobile service providers following the launch of a number of new services that will allow mobile subscribers to send and receive money from any bank in the world  using their mobile phone.Mobile service provider Zain has enhanced its mobile money transfer product, Zap, to allow any of its five million customers within the three countries where the service is active – Kenya, Uganda and Tanzania – to transfer money in seconds using the mobile phone platform.

Users can now receive money from anywhere in the world directly to their mobile handsets as well as send funds directly to their bank accounts. This means a relative in New York for example can send money from their bank account to a Zap customer in Nakuru who will receive it almost instantly.The evolution of Zain’s mobile commerce product into an international money transfer service will have several implications for players in the global telecommunications and financial industries.

The likely casualties of Zain’s move are expected to be formal banking institutions and traditional money transfer agents such as PostaPay, Western Union and MoneyGram.Inter-bank transfers can account for up to 20 per cent of a bank’s profits, costing anything from Sh500 upwards to send money to foreign accounts.Within Kenya, traditional money transfer providers like Western Union and MoneyGram were already beginning to feel the effects of M-pesa, Safaricom’s mobile money transfer solution as it is cheaper and faster.

Eighty per cent of Kenya’s population and ninety-five per cent of Tanzania’s and Uganda’s populations currently do not have access to banking services.This has the potential to transform banking in Africa and will help overcome many of the obstacles presented by providing banking services to remote and rural communities who are now able to access global funds swiftly.

Analysts said the launch of these services would also create new synergies between the financial and telecommunications industries.

 
 

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