Kenya’s Equity Bank has unveiled plans to lower the cost of mobile money and mobile banking fees as the bank prepapres to launch its Mobile Vitual Network Operator (MVNO) services in July this year.
According to Equity Bank the new mobile offering will target to reduce mobile money transaction fees by removing the “middle man” and let customers have direct transactions.
The bank stated that it plans to partner with Airtel Kenya, and use their 60% excess capacity to provide a seamless end to end service to any bank and any telco.
Mobile money transfers will cost anything from Ksh1 ($0.01) to transfer Kshs 100 ($1.14) reaching a maximum of Kshs 25 ($0.28) to transfer any amount, the bank revealed.
Currently on Safricom's mobile money service, M-Pesa, transfer charges range from Kshs3 ($0.03) to transfer Kshs 10 ($0.11) and Kshs 110 ($1.25) to transfer Kshs 70,000 ($796.39).
Equity Bank's new cost measures will represent a transfer fee of 1% against the current market rate of 16%.
The plan for the MVNO licence is big for the bank and will put the market leader Safaricom on alert.
Earlier this month Safaricom introduced a new API system that enables mobile money users to transact within seconds when transferring funds from their mobile money accounts to their bank accounts. Previously, the transaction used to take up to an hour.
Equity Bank also wants to replicate Mshwari’s success by assisting users take loans from the bank using their mobile phone.
Mshwari is the mobile banking system between Commercial Bank of Africa and Safaricom’s M-Pesa with over 7 million users.
Equity Bank will aim to make mobile banking be a “channel for accessing a convergence suit of financial products, loans, savings, brokerage services, custodial services, investment services, insurance services and other social corporate offerings such as health, education, entrepreneurship and financial literacy.”
The bank also aims to decrease the instant loan interest rates to range between 1% to 2% from the current 7.5% offered by Mshwari.
Equity Bank says it has already signed on 11,000 agents who are ready to introduce the new product across the country and a 300 seater customer care centre.
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