Mobile banking, powered by cell phones, has become a big success story in Kenya and the whole world now talk about it. But this has been basically the M-Pesa story and the banks trying to emulate the same have had very little success so far. Mobile banking utilizes technology which enable bank customers to use their mobile devices to manipulate their bank accounts, and do a number of transactions such as paying bills, transfer funds and even pay for credit. Banks trying to introduce mobile banking find themselves? in a direct competition with M-Pesa and Zap and that is why for sometime banks have had silent beef with M-Pesa. After realizing that M-Pesa is here to stay they have come round and started to offer ?their own version of mobile banking. The problem come in from the fact that they have to use the same mobile service providers to deliver their services.? At the end people basically end up using M-Pesa instead of the bank mobile banking system.
The banks use the addictive mobile banking model in which the mobile phone is used ?as a channel to an existing bank account. This is the system which would have essentially catered for the population with bank accounts while the M-Pesa which uses transformational mobile banking model left for the unbanked population. M-Pesa has outgrown what it was meant for initially and now both rich and poor, upper class and lower class and even classless use it. Its popularity is increasing each day as big corporations continue to adopt the M-Pesa in paying for their products and services.
Many banks in Kenya which have introduced their mobile banking systems have struggled to separate their version from M-Pesa. Look at the following examples where although banks provide the mobile banking system the clients still end up using M-Pesa intead:
- Equity Bank introduced mobile banking : Equity Bank EAzzy 24/7 in September last year. One year later not many people are using the system. Most Equity Bank account holders would rather withdraw the cash from the bank and head to M-Pesa for the money transfer and payment of the bills and even goods. Equity account holders with Safaricom lines can credit and transfer cash into each other?s account using their mobile phones in real time, subject to the availability of funds. Equity bank clients are also able to pay their utility bills, purchase airtime, request their bank statements and perform 13 other crucial banking inquiries. The big mystery is why the Eazzy 24/7 not popular despite the fact that Equity Bank is among the banks with largest clients base in the country.
- CFC Stanbic Bank, teamed up with Safaricom to offer service called bulk payments which enable CFC Stanbic clients to transfer funds from their accounts to specified beneficiaries? mobile phones. According to this service, businesses can pay a large number of people through Safaricom’s M-pesa service by simply submitting their names and mobile phone numbers to a local commercial bank. M-Pesa is in full use here…
- Family Bank recently introduced e-payment system. The Family Bank system which is known as? Pepesha Pesa, allows Family Bank customers to send money directly to their account in order to offset loans and other obligations. The most interesting aspect of Family system is that account holders? use the M-Pesa through Paybill feature.
- Consolidated Bank, customers can transfer money from their bank accounts to M-Pesa , which means they are essentially enabling the use of M-Pesa directly.
How can banks turn around this trend and stop giving their competitors undue advantage:
First, for banks to be successful in Mobile banking they have to develop their own platform. The majority of banks rely on the M-Pesa platform for their mobile banking while it is clear that M-Pesa itself is mobile banking. Relying on your competitor to deliver your services to your client is in a way surrendering the advantage to the rival right way. For successful mobile banking the banks have to come up with their payment platform, something closer to but not M-Pesa or Zap.
Secondly, increase market penetration.? It is quite clear that the bulk of M-Pesa money transfers are from urban centers to rural areas. Unless the banks covers the rural areas, meaning that they have to make their presence be felt up to local shopping centers, they will continue to lag behind.? One the ways of doing this is the use of Mobile to access the ATMs. The ATMs can be easily constructed in rural shopping centers and at the same time they can increase the number of their branches to local towns.
Finally, the banks have to get a way to maneuver considering the tough regulations they work under . When come to M-banking , there are some regulations in a number of fields which the banks can do without: e-commerce, payment systems, competition, deposit taking, telecommunications, consumer protection.