MTN Ghana has assured its valued customers of continued safe and secured delivery of its Mobile Money service despite current challenges.
Mr Eli Hini, Mobile Money Senior Manager, MTN said customers are experiencing delays in mobile money services due to the fluctuation in one of its three access channels.
Mr Hini gave the assurance at a news briefing in Accra, to update the media on the current challenges facing the service and measures being put in place to address the problem.
He said management wishes to apologise to *170# Mobile Money channel users for the delays they are currently experiencing.
MTN Mobile Money customers should rest assured that their monies are safe and may be more speedily accessed by using My MTNmenu on their phones, he added.
He said customers, who typically access the service through the short code*170# are therefore advised to visit any MTN branch for assistance.
The Senior Manager said engineers are working tirelessly to resolve the problem with *170# in the shortest possible time.
Mrs Cynthia Lumor, Corporate Service Executive, said management of MTN appreciates the patience exercised by customers and apologised for the inconvenience.
She expressed the hope that the problem, which started a week ago, would be resolved by the technical team around the clock.
She said due to the problem the company has maintained extended hours to accommodate the increased volumes of people at their branches.
Kenya is a regional leader in access and use of financial services, with 77% of the population living within 5km of a commercial bank or mobile money agent, according to a recent report published by Kenya Financial Sector Deepening. Of the total number of financial access points, "mobile money agents represent 75%", a statistic partly explained by the success of M-Pesa.
The pioneering mobile-based money transfer service, launched in Kenya in 2007 by telecomms company Safaricom, has become internationally renowned. Today 15 million subscribers use the service, transacting daily amounts estimated to be close to 60% of Kenya's GDP. But competition is coming.
In April, the Communications Commission of Kenya licensed three new Mobile Virtual Network Operators (MVNOs). These operators allow companies to provide mobile money services without building new mobile infrastructure by working with existingmobile network operators. Equity Bank was one of the three to receive a licence while Safaricom's competitor, Airtel Kenya, is to host the MVNO networks.
Not long after, Equity announced plans to issue subscribers with a thin sim card that sits on top of an existing card provided by other operators so customers can access its mobile money services without needing to own two phones.
The move clearly has business implications for Kenya's mobile money market. Fortune Magazine predicted that "the apparent M-Pesa monopoly may be set to crumble", indicating that the new licensing regime could open up the market long dominated by Safaricom. But will it widen financial inclusion in Kenya?
Perhaps predictably, Equity believes so, saying at the time of the launch that the MVNO would "make banking services more accessible, flexible, convenient and more affordable". And others agree. In July financial inclusion organisation the Consultative Group to Assist the Poor (CGap) said that the move could lead to falling prices of financial services, more mobile money innovation, increased digital financial services uptake and better customer services.
However, the question remains as to whether the introduction of new MVNOs will speed up access for those still excluded from financial products and services?
There is clear evidence that Equity Bank is already playing an important role in deepening access to financial services in Kenya. By adopting the agency banking model, consumers can access an Equity agent in a coffee shop, supermarket or corner shop. The bank has indicated that it will more than halve interest rate charges ("... instant loans will be available at a maximum of 2% per month compared with the 7.5% per month offered in the market"), which could facilitate micro-lending. Finally, Equity has announced extremely low transaction costs for money transfers - between Kshs1 ($0.01) and Kshs100 ($0.28).
In response, Safaricom slashed transaction charges by 65%, but this increased competition is not all good news. CGap has expressed concerns that the ensuing price wars could create "confusion as customers try to navigate a wide array of products with different features, pricing models, and standards of service".
This is not the only challenge. Last month, the Kenyan courts become involved as Safaricom sought to review its legal commitment to customers that opt to use Equity's thin sim, saying that the product could be expose subscribers to financial fraud. There are also questions about the quality of service that will be provided by the MVNOs, as well as the regulatory environment.
For observers of Africa's banking sector, these are interesting times. Despite the challenges, particularly for regulators, there is little doubt that the problems of access for the poorest are now firmly in the sights of industry leaders.
Equity's chief executive, James Mwangi underlined the value of Equity's new mobile banking service, saying: "The biggest problem with accessing a bank is not bank charges, it is the cost of access. I will have to go 70km to where the bank is; I will have to pay public transport; I will have to spend the whole day to get to the bank.
"If we really want the masses and low-income people to join banking, then we should make financial products very affordable, and that is the value proposition that we are making to the market."
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The evolution of African markets faces significant barriers: cost, distance, and a lack of infrastructure. Less than 30% of the population have bank accounts, and even fewer have credit cards. Informal retail and cash purchases are the norm, and that has its risks and costs. The amount of cash in ones pocket at any given moment drives purchasing decisions. With no means to track sales, little data is available, and channels are too fragmented for companies to forecast production and distribution with any degree of accuracy.
Many companies are taking advantage of this opportunity to steer emerging African economies toward a mobile-driven, cashless (or cash lite) future by introducing a plethora of new products, services, and business models. Financial services in Africa are experiencing a moment of exciting change. While US consumers are just being introduced to Apple Pay, mobile money services like MPesa and MTN Money have been flourishing in African markets. More people have mobile money accounts than bank accounts in at least nine African countries, up from four in 2012. And the continent as a whole leads the world in the adoption of financial services on the mobile platform.
In Rwanda, Uganda, and Ghana, mobile service provider MTN has taken the lead by launching ATMs where customers can withdraw cash from their MTN Money accounts without a bank card (they send a message, then receive a one-time-use PIN on their phone). Other mobile service operators are also vying to release innovations to help customers pay for things without cash, receive money from abroad, and obtain micro loans and insurance products. With barely any legacy infrastructure or status quo to be overcome, the existing commercial landscape feels ready for disruption.
Three distinct factors are driving this transformation. First and foremost is the desire for financial inclusion. Africas unbanked majority needs access to affordable tools for savings, loans, and credit. The second is the need to lower the costs and risk of retail and trade based primarily on cash transactions. The third is the introduction of cashless policies from regulators in countries like Nigeria, Kenya, and Ghana. Low consumer confidence in traditional financial institutions also makes this an opportune moment for new players to enter the solution space. And cellular technology is leading the way.
Bankelele, an award-winning Kenyan blogger on all things banking, shared some pragmatic insights from Nairobi, the heart of Africas mobile money revolution: People seem to trust the mobile operators more than they do banks, he said. Transparency and consistency in transaction costs have a lot to do with this. If they have 400 shillings in their mPesa account, they know that it will still be there six months or even a year later, but bank accounts seem to eat away their comparatively meagre savings with all manner of fees and charges.
This has been driving ever closer relationships between banks and mobile operators. One of the best known is Equity Bank of Kenya launching an MVNO (mobile virtual network operator) through Airtel Africas mobile infrastructure to provide an entirely new distribution channel for all their banking products. They rolled out their own SIM card to give their extensive customer base (8.7 million at last count) secure mobile banking, and they also distributed 300,000 smartphones to the retail trade. So now, Equity Bank account holders can pay for purchases with a swipe of their phone and access a wide range of financial products much faster and cheaper.
Steep transaction costs for receiving money from relatives abroad has also led to more experimental startups like BitPesa, which is testing a service to transfer money from the UK to Kenya. They convert bitcoins, purchased through their website, into Kenyan shillings, and then send those to any Kenyan mobile money wallet. Econet Wireless is another mobile operator laying the foundation for an entire suite of such services and paving the way for a cashless future for their customers in Zimbabwe.
These trends are not limited to customers. Numerous solutions are popping up to help small traders and merchants convert to this emerging cashless future. KopoKopo, a Kenyan startup, provides software solutions that facilitate and incentivize merchants to go cashless. They set up a digital payment network and mechanism for a merchant to accept digital payment, and then they offer Business OS tools to manage everything from analytics to credit to marketing to supplier payments. And South African start-up Nomanini has developed a small portable PoS terminal specifically designed for the micropayments - such as to buy a bus ticket - prevalent in the informal economy.
Adoption of these services is still unevenly distributed, as people resist switching from the familiar and flexible interpersonal transactions to electronic ones. But the possibilities for ecommerce and consumer marketing are enormous. Nigerias ecommerce market alone generates $2 million worth of transactions per week, and online transactions are expected to cross $6 billion by the end of 2014. Interestingly, the fears regarding Ebola and Boko Haram are driving more people to shop online (and stay at home). E-tail could help consumer goods companies leapfrog the need for extensive distribution infrastructure, something consumer product companies are already exploring.
Still, as Bankelele cautions, consumer confidence and trust must be built through transparency and honesty, and interoperability and seamless transactions between banking institutions are still a ways off. There is time for the African consumer markets to come into their own, offering consumer-facing companies breathing room to consider the impact of these changes on their market entry strategies.
Users of BBM, BlackBerrys app that offers private social networking service on mobile devicescell phones, will now have access to enhanced mobile payment features by means of the app. Blackberry, a global leader in mobile communications, revealed today a number of new enhancements on its BBM app, which is now readily available on Android, BlackBerry, iOS or Windows Phone operating platforms.
The statement was produced users in Indonesia, a country of more than 250 million people, enabling mobile users in the country to take advantage of on the apps BBM Cash feature to conduct mobile payments and a host of other banking and financial transactions safely using their mobile devicecell phone. According to Blackberry, Indonesia makes an appealing target for the duty from mobile money services given that its debit card penetration is just 11 % and it tapes the 2nd fastest development rate on the planet in e-commerce after China.
BBM Money, which was developed by Monitise, a provider of mobile banking and payment services together with Pertama Bank of Indonesia, which will handle the service, was previously provided as a mobile wallet service special for BlackBerry users. With the here and now improvement, BBM Money will certainly be available throughout Android and iOS platforms, regardless of the consumers bank and whether the client has a checking account. The new BBM Money allows users to make payments in stores and by means of online and offers bank-grade security and privacy security.
The brand-new BBM Cash service will certainly be readily available to Indonesian customers beginning next year.