Innovation

Every SIM card to become a debit card with Kenyan MVNO

 James Mwangi, CEO of Equity Bank launches new MVNO

James Mwangi, CEO of Equity Bank launches new MVNO

The idea of Mobile Virtual Network Operators (MVNO’s) has been in existence in other parts of the world for over 10 years but is a relatively new concept in Kenya.

That is all about to change with the first in Kenya and the first in Africa to offer a full banking suite through an MVNO.

 

 

The “next big thing”
Equity Bank Kenya has announced their MVNO,  as the ‘next big thing’.  Hailed as Equity 3.0. it will offer banking and mobile money products on its own network. It will also roll out services similar to those offered by other mobile operators such as voice, data and SMS. In a country where mobile money is MNO led this makes sense for a bank trying to break into the MPESA cash machine and may help drive charges down.

Every SIM card will be a debit card
“Every SIM card will be a debit card, enabling customers to pay for goods by tapping their phones on a mobile point of sale terminal. By linking the account to the mobile phone, customers can apply for loans, move money to and from their bank accounts, pay bills as well as carry out trans-border transactions from their mobile phone,” Equity Bank says.

Low cost pricing strategy to 
A low-cost strategy to attract customers is likely to unsettle the status quo in the industry currently dominated by Safaricom’s M-Pesa. Mobile transfers will be charged at 1% of the transaction value compared to the prevailing market charges of 16%. The charges will be capped at Ksh 25 per transaction. Additionally, instant loans will be at a maximum of 2% per month compared to the 7.5% per month offered in the market.

Equity chief executive James Mwangi said “all the bank’s 8.7 million customers would be issued with new SIM cards for free on which they can make calls, send text messages, browse the Internet and conduct mobile money transactions”.

The Partnership
In a partnership, Equity will utilize Airtel’s excess capacity to deliver MVNO services.  As the host and partner operator for Equity Bank, Airtel stated that the MVNO services will run on its excess capacity of its network, ensuring that it maintains seamless quality experience to its consumers.

Airtel Kenya CEO Adil Youssefi congratulated Equity Bank on the move to pioneer the MVNO initiative in Kenya saying that “The launch of MVNOs is in line with Airtel Kenya’s innovation and differentiation agenda. We believe that the entry of the MVNOs into the market will stimulate and sustain overall market growth through a new range of innovative products and service propositions that will give more choice and value to Kenyans. Additionally, their entry into the market will increase the uptake of mobile services in key segments such as mobile commerce and data thereby accelerating the inclusion of all Kenyans into the mobile revolution for sustained economic development of the country”.

Roll out
The planned roll out for the MVNO is  July 2014 and Equity Bank shared with Appsafrica that they have  put in place human resources  and technology teams to ensure efficient service delivery. A 300 seat customer contact center fully integrated with voice and social media is now operational 24 hours 7 days a week and staff have undergone intense training on effective customer service and experience.

Lets see if the “next big thing” can deliver.

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