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Sunday, February 15, 2009

Zain to Launch Zap ending MPESA Monopoly

After spoiling for fight with the regulator, including the Central Bank of Kenya, Zain is now set to launch its money transfer service dubbed Zap. The launch is set to end MPESA's monopoly in the mobile telephony money transfer and enhance convergence in service delivery to customers.

When Safaricom launched its debut mobile money transfer service a few years ago, many didnot imagine that its growth would be phenomenal. After tailoring its services to banking the unbanked rural population as well as facilitating secure and real time money transfer the business has grown by leaps and bounds and the customer base now stands at over 5Million with substantial daily remittances going through the system.

After the unsuccessful launch of the Money transfer service, Sokotele, the company went back to the drawing board resulting in the launch of Zap in partnership with Standard Chartered bank and a host of other partners across the east african region.

Banks Jittery
It is indeed evident that the successfull roll out of MPESA money transfer service did send jitters across the banking sector players. Pundits will therefore be waiting to see how this new product that has more services converged including e-banking will be received by banks. As competition hots up, the major beneficiary shall be the customer as more services will be brought closer and closer at relatively lower costs.

Other players
As Zain is rearing to go with the launch of Zap, other players in the mobile telephony industry including Orange and Econet will be keenly watching and hopefully launch other innovative products fashion in the form of MPESA and ZAP.

Business Costs
Against a backdrop of these new products, many players in the mobile telephony and the telecommunication sector have been petitioning the government for reduction in the cost of doing business in Kenya. These issues revolve around poor infrastructure and moreso the road network, increased cases of insecurity and unreliable energy supplies leading to significant costs incurred by these companies. The immediate resolution of the above will go a long way toward spurring investments in Kenya as an East African hub for business and an emerging market in Africa.


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