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BREAKING NEW GROUND IN ELECTRONIC MONEY TRANSFER SYSTEMS: THE MOBILE REVOLUTION IN KENYA

BREAKING NEW GROUND IN ELECTRONIC MONEY TRANSFER SYSTEMS: THE MOBILE REVOLUTION IN KENYA. Presented By: James Njeru OUAGADOUGOU , 8 TH FEBRUARY 2011. AGENDA. Introduction Mobile Money Transfer Services Technical Features Services Offered Regulatory Framework

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BREAKING NEW GROUND IN ELECTRONIC MONEY TRANSFER SYSTEMS: THE MOBILE REVOLUTION IN KENYA

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  1. BREAKING NEW GROUND IN ELECTRONIC MONEY TRANSFER SYSTEMS: THE MOBILE REVOLUTION IN KENYA Presented By: James Njeru OUAGADOUGOU , 8TH FEBRUARY 2011

  2. AGENDA • Introduction • Mobile Money Transfer Services • Technical Features • Services Offered • Regulatory Framework • Benefits of the Money Transfer Service • Conclusion

  3. 1. INTRODUCTION • CCK is the regulatory authority for the communications sector in Kenya • Established in 1999 under the Kenya Communications Act ,1998(as amended); • CCK mandate has been enhanced to promote/facilitate efficient delivery of public sector services electronically and develop frameworks to minimise forgery in electronic transactions. • Mobile telephone penetration grown from (20,000 subscription) 0.053% in 1999 to 55% (over 22 million subscription) in 2010.

  4. 1. INTRODUCTION CONT.. • Mobile money transfer services started on 6th March 2007 by the Safaricom (MPESA). • MPESA has revolutionized business/other transfers in Kenya; • To date three other mobile operators have joined this market i.e. Airtel-“Zap”, Essar - “yuCash” and Telkom “Orange money”; • The Public Postal operator- PCK is yet to join the mobile money market

  5. 2 (A). MOBILE MONEY TRANSFER SERVICES • 81% of Kenyan population have no access to bank accounts • At Dec. 2010 mobile money transfer service had: • 16.7 million users (42% of the population) • 39,000 agents countrywide (employment) • Total transactions reaching USD 30 million a day and USD 900 million a month. • CCK works closely with Central Bank of Kenya to curtail money laundering/other illegal activities • Other products have been launched by financial institutions in collaboration with network operators (M-Kesho, Pesa Point, Pesa Pap).

  6. 2(B). WHY MONEY TRANSFER

  7. 3. TECHNICAL FEATURES • The service is provided on a telecommunication platform and relies on the SMS services • It needs an active SIM card with the functionality of money transfer service as configured by the operators. • To deposit/withdrawal a customer needs to go to an M-PESA Agent (This is confirmed by an SMS received by both the Agent and the Customer). • Minimum transfer Ksh.50 (US$ 0.625) up to Ksh.70,000/= (US$ 875) per transaction limit Ksh. 140,000/= (US$ 1,750) per day

  8. 3. TECHNICAL FEATURES CONT.. • Popularity of service due to: • Accessibility • Affordability • Simplicity • Acceptance of smaller transactions unlike banks; • Speed-instant transfers • Convenience • Received international recognition

  9. 4. SERVICES OFFERED • Deposit/Withdraw money • Transfer(send) money to registered/non registered customers • Buy prepaid airtime/purchase credit • Manage money transfer account • Pay bill and services; Utility bill payments • Buy goods and services • Bulk cash payments e.g salary payments • International money transfer • ATM withdrawals • Dividend payment • Social/Charitable collections • Banking

  10. 5. REGULATORY FRAMEWORK • Regulatory bodies (Central Bank of Kenya – CBK and Communications Commission of Kenya - CCK) promotes a stable & conducive environment for financial innovation to thrive and financial inclusiveness. • The regulators work with Government agencies to promote a sound, safe, efficient, innovative and inclusive financial system with no room for regulatory arbitrage. • Unified Licensing Regime - NFP, ASP & CSP; • CSP(Content Service Provider) to provide content which among others include money transfers, lottery, data downloading(ringtones etc) M-church- tithe

  11. 5. REGULATORY FRAMEWORK CONT.. • The public postal licensee allowed to provide operations of postal financial services among others; • CBK regulates financial services • CBK has developed regulations to facilitate and enhance electronic transactions and money transfer services • License conditions - all operators must set up customer care centers and file their complaint resolution procedures with CCK.

  12. 6. BENEFITS OF MONEY TRANSFER SERVICE • Build up of savings • Convenience, fast and efficient • Serving the unbanked and the under-banked thereby transforming livelihoods • Assist in the development strategies • Financial deepening and support development strategies • Affordability and ensuring universal access to financial services • Increased participation and development of markets

  13. 7. CONCLUSION • This is one area where the post has to take technology as an enabler rather than a threat; and turn challenges into opportunities. • Post has potential in this service owing to: • Countrywide & worldwide reach and/or destinations network • Traditional public trust confidence • It is an innovative service that will ensure financial inclusiveness large unbanked population among developing and underdeveloped countries. • Focus on simplicity & partnership

  14. Further Inquiries Visit our website: www.cck.go.ke Or Email: info@cck.go.ke Merci- Asante Sana

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