Kenyan banks are expected to unveil a digital mobile money transfer platform early next year, to tackle M-Pesa's dominance of the Kenyan cashless payments market.
Banks are taking the mobile money fight to M-Pesa
According to data from the Data Communication Authority of Kenya, M-Pesa saw $16 billion in transactions in the first six months of 2016.
According to a Quartz Africa report, the magic bullet aimed at M-Pesa was conceived four years ago when banks, in an unusual display of unity, came up with a solution that would allow mobile phone users send or transfer money within banks without relying on network operators.
In the current system, banks still have to depend on mobile money transaction platforms such as Airtel Money and M-Pesa
to make various kinds of transactions such as depositing, withdrawing money or settling bills in real time.
To put this in context, Kenyan telco Safaricom alone serves over 3.1 million customers on a monthly basis through M-Pesa - Equity Bank, which controls 15% of the Kenyan mobile money market through its Equitel service has 10 million customers.
ALSO READ: Vodacom to shut down M-Pesa platform
According to data from the Data Communication Authority of Kenya, M-Pesa saw $16 billion in transactions in the first six months of 2016, compared to Equitel's $2 billion and Airtel Money's $230 million.
The bank made their first move by establishing a company, Integrated Payments Service Ltd (IPSL), to facilitate direct funds transfer amongst banks without using third-party services like M-Pesa.
The system is already in its pilot phase with expectations for its public release said to be early 2017. Once the system becomes available, users will be able to use mobile phones, ATMs, POS Terminals, and the Internet to make transactions.
“Right now, it will allow person to person payments, where one can pay from one account to the other,” says Kenya Bankers Association chief executive Habil Olaka, according to Quartz.
“Of course, it has the flexibility that may subsequently, depending on the demand and user requirements other services (such as bill payments, loan applications or repayments etc) be leveraged on the platform.”
Presently, M-Pesa controls about 85% of the Kenyan person-to-person money transfer market valued at roughly $3.6 billion, just in the second quarter of 2016.
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: