Friday, July 17, 2015
EQUITY MOBILE BANKING EQUITEL TO LAUNCH MONDAY
The service which allows mobile users to carry out many banking functions currently unavailable on telco platforms marks the beginning of what is expected to be a marketing war that can only benefit agencies and media outlets.
Equity is fresh off a hard-fought victory at the law courts where its intention to use a thin SIM overlay technology had been contested by Safaricom as a data security threat.
Despite its muted approach the service now has well over 500,000 subscribers that it will look to build on once it can formally roll out the product.
At stake is the next frontier of banking where the phone number will likely be seen as the key identifier and a de facto bank account.
Payments from person to person, person to business, business to business and even government to people (pensions) and people to government (license fees, stamp duties, taxes etc) will also be fought over tooth and nail.
Safaricom is the dominant player in the mobile financial services sector and has recently upgraded and relocated its popular MPESA service to handle more transactions in a fraction of the time it used to before.
Equity on the other hand, is the largest brick and mortar lender in the country by customer numbers and also the second largest in most other categories trailing only KCB Group.
It is seen as the first viable challenger to Safaricom on the mobile financial services sector with hard charging CEO James Mwangi expected to leverage on the grassroots lender's vast rural customer base to entrench Equitel.
With free cash flow equal to what Equity makes before taxes, Safaricom is not expected to sit on its laurels either and is likely to intensify its marketing efforts.
The telco is in the process of restructuring itself to devolution by appointing regional heads of business with profit and loss responsibilities who can address different parts of Kenya specifically.
They will report to a Chief Commercial Officer, a position rendered redundant after Bob Collymore restructured the organization shortly after he became CEO.
It was then held by Peter Arina who left the company earlier this year as the Director of the Consumer Business.
Indications are that Safaricom may also introduce the position of Chief Operations Officer, COO, but that is yet to be confirmed.
Equity is seen pegging its appeal to lower charges. It claims the cost of electronic money transfer is negligible and should not be costing Kenyans that much.