This is an article I wrote on the rise of the Mobile Web in Kenya that was published in this week’s edition of the East African Newspaper. You read it here>
Monthly Archive for January, 2010
Largest bank by customer base gains capacity to handle 180,000 transactions per minute.
Nairobi, KENYA, 21 January, 2010
Equity Bank has fully migrated to the Card Management System from OpenWay Group of Belgium. The Way 4 System which is an online Card Management system is designed for multi-institution and multi-currency transaction processing, and has the ability to handle over 60 million cards with speed performance of 180,000 transactions per minute.
The system which received the highest possible rating by Gartner – the top organization for rating software in the world- also provides support for non-card based transactions over multiple self service channels, and also transacts different currencies.
Already in operation, the new system will increase efficiency and eliminate the amount of time it takes to transact business in all Equity Bank Point of Sales outlets and ATMs in the region.
Speaking during the signing of the partnership between OpenWay Group and Equity Bank, Dr. James Mwangi said the system has capacity to host the combined network of Equity Bank branches, subsidiaries and other banks at reduced costs occasioned by the automated workflows provided by the Group.
‘The new system not only gives Equity Bank a niche in terms of competitiveness in cutting edge technology and card management, but allows speedy and efficient transaction process in real time, and for all currencies,’ Dr Mwangi said.
Dr Mwangi said the new migration had positioned Equity as the first banking institution in the region capable of handling regional inter switching connectivity with ease, noting that the cost reduction and increased volume of channel transactions would translate into higher profit margins.
He said the new switch system would come in handy with the recently launched partnership between Equity Bank and Safaricom which will allow M-Pesa account holders to withdraw money from the banks 550 Automated Teller Machines countrywide.
Incidents of fraud in card transactions in the country would also be reduced drastically with the implementation of the EMV ( Eurocard, Mastercard, VISA) cards, Dr Mwangi said.
OpenWay Managing Director Wim Pardon said the robust Way 4 switching and back office system has also enabled Equity Bank seamlessly roll out in the region. The system has a built in online monitoring capability and has been used for issuing debit and credit cards.
Mr Pardon who was accompanied by the Account Relationship Manager Georges Michel said that Way 4 is looking at this partnership as an ideal opportunity into the African Market.
The system is equipped with a card association readiness for Visa, Mastercard, JCB , CUP among others. This means all other banks’ VISA cards can now be used on Equity Bank Point of Sale terminals in leading supermarkets and other retail outlets countrywide.
The investment was prompted by need for a regional switching system for the bank and the challenge of coupling system stability with higher capacity and faster transaction speeds.
I&M Bank has launched local e-commerce services in Kenya today. I&M Bank is the first bank in Kenya to offer local e-commerce services that would enable merchants to sell their goods online in Kenya and beyond. I&M Bank’s e-commerce offering is being offered through strategic partnerships with VISA International and payment gateway service provider Iveri of South Africa. These key partnerships mean that I&M Bank’s e-commerce service is not only world-class, it also means that credit card and debit card payments can be made online from any part of the world.
Prior to I&M Bank’s e-commerce service, merchants in Kenya who wanted to sell online needed to set-up subsidiary companies outside Kenya where they could then register for merchant bank accounts and payment processing services in other countries such as the UK or the US. This meant that payments would need to be processed via international services before being remitted to Kenya, leading to higher costs and lower margins.
Now, through I&M Bank, merchants in Kenya will have payments processed online via Iveri in South Africa and then acquired by I&M Bank which will not only be faster, but also more cost-effective. It is expected that more Banks such as Kenya Commercial Bank (KCB) will also start offering e-commerce services in Kenya soon since they advertised for online payment processing services last year (also as reported in this blog).
Nairobi, 13th January 2010
The Kenya ICT Board, the state corporation charged with developing and promoting the Business Process Outsourcing Sector ( BPO) has further extended the deadline for bandwidth capacity support to the BPO Industry.
The board through the Government of Kenya has received credit from the International Development Association (IDA) to fund this initiative aimed at assisting industry players meet the cost of internet connectivity.
The first phase of capacity support ran from 1st July 2007 to Feb 2009. During this time, USD 508,937.29 (circa Ksh 40m) out of a budgeted amount of USD7M was disbursed. It is predicted that the extension of this support will significantly increase the uptake of the subsidy by industry players and give the industry the necessary boost to grow and be able to compete on a global scale.
This subsidy, funded by the World Bank will now be extended from March 1, 2009 to 31st March 2010. This is the final extension in response to the board’s request on behalf of the industry with an aim to mitigate the high prices of internet access in the country which is reducing albeit slowly following the landing of the Teams and Seacom fibre optic cables.
The capacity support will be disbursed effective immediately and will close on March 31st 2010.
Eligibility for the bandwidth capacity support is open to all BPO operators in Kenya who currently offer outsourcing services. The Kenya ICT Board will audit the companies and oversee the disbursement of the funds to the BPO operators upon receipt of applications from operators.
Mr. Paul Kukubo, CEO Kenya ICT Board says, “Increasing Kenya’s competitiveness in the global BPO sphere is vital for the growth of the industry. With the fibre Optic cables now in place, Kenya has become a significant competitor in the global BPO space. We expect the cost of internet connectivity to drop significantly. But this will take some time. This extension of bandwidth capacity support will help the industry reduce operating costs and thus increase global competitiveness in the short term.”
The criteria and procedure for bandwidth capacity disbursement remains:
Step 1: BPO companies to register with Kenya ICT Board as a BPO operator by completing a registration form available at Kenya ICT Board Offices and on our website (www.ict.go.ke)
Step 2: Sign a “BPO Capacity Purchase Scheme MOU Agreement” with the Kenya ICT Board. The MOU documents are available at Kenya ICT Board Offices – 12th Floor Telposta Towers, Koinange Lane.
Step 3: Audit and verification of the required submissions will be carried out. Upon completion, the capacity support will be provided.
Step 4: Post award, monitoring and Evaluation will be carried out consecutively and concurrently by a Kenya ICT Board at regular intervals
Enquiries:
Lucy Odhiambo Email: lodhiambo@ict.co.ke 0737 839047 or
Haji Tomno Email: htomno@ict.go.ke Tel: +254 020 2089061/2211960
About Kenya ICT Board:
The Kenya ICT Board was established by HE President Mwai Kibaki, as a state corporation under the State Corporations Act Cap. 446 on 19th February 2007. The achievement of an information-based society is one of the main priorities of the Government towards the realization of national development goals and objectives for wealth and employment creation. ICT is one of the fastest growing sectors in the country. Harnessing of ICT will therefore help the Government to realize a number of its key public policy objectives.
The objectives of the Kenya ICT Board include: To develop, launch and sustain a globally compelling brand marketing campaign for Kenya ICT, To develop and promote competitive ICT industries in Kenya, To develop world class Kenyan ICT institutions and To increase ICT access.
In the news this week, Zain and Housing Finance have announced a strategic partnership based on the Zain’s Zap mobile money service. The partnership will enable Zain Zap users to deposit and withdraw mobile money at any of Housing Finance’s 10 branches in Kenya. At the same time, Housing Finance will also provide agency banking services with Zap. This service is quite similar to a recent partnership that was also announced by Equity Bank and Safaricom that would enable Safaricom’s M-Pesa mobile money users to withdraw money from Equity Bank’s automated teller machines (ATM’s).
Innovators challenged to create mobile solutions that can raise the living standards of people in growth economies and benefit them.
Local innovators stand to win a million dollars in a new competition announced by leading mobile phone company Nokia. The “Growth Economy Venture Challenge’’ is part of Nokia’s global Calling All Innovators 2010 competition targeting innovators, with participants expected to create a mobile product or service that raises the standard of living or enhances the lives of the local people.
The Venture Challenge, which is not limited to software or hardware that uses Nokia device or software platforms, will consider any submission that enhances the target growth economy and also provides a potential return on the investment. And since many emerging markets have varying degrees of mobile and Internet adoption, submissions can also expand beyond the mobile phone.
The prize money will be invested in a single winning organization with the best idea as decided by a combination of judges from Nokia Growth Partners, Nokia’s venture arm, and Forum Nokia- Nokia’s organization dedicated to third party developers and other innovators. Additionally, ten finalists from the contest will be invited to present their ideas and business models to a panel of Nokia business people and private venture capitalists. This will provide an opportunity for the innovators to receive business guidance and possibly other funding from participating venture capitalists.
The competition officially kicks off on February 1st and finalists will be announced by mid May 2010 while the final winner will be announced in June, 2010. The deadline for submissions is April 18, 2010. Nokia will accept innovative ideas in four main categories in the competition namely; Eco/Being Green applications that help to save the planet with innovative, eco-friendly uses, and Productivity applications that make life easier, and helps someone to be more efficient in utilities, business, or personal finance applications. The other category is Life Improvement applications that positively affect the daily lives of people living in developing countries by using the prevalence of mobile devices to teach children and illiterate adults critical skills, and agriculture health. The final category falls under Entertainment applications that bring out musical talent and show off the coolest multimedia features, including music, multimedia and games – to bring an element of having fun.
Announcing the competition in Las Vegas, Nokia CEO Olli-Pekka Kallasvuo called on innovators to do good by bringing mobile solutions to parts of the world that can benefit most. He explained that mobile solutions can be quite profitable, but not exploitive, leading to financial “win-win” scenarios for both innovators and consumers. ”We’ve seen what the tech community can do when it focuses on problems that are also opportunities”, Kallasvuo said. “We want to channel that energy toward improving lives in the developing world.”
As examples of innovations in growth economies, Mr. Kallasvuo spoke about several Nokia solutions and projects such as Nokia Life Tools, Nokia Tej and others that can be viewed at http://theprogressproject.com/. “This competition is meant to bring out the creativity and innovation of local innovators to come up with locally relevant mobile phone technology solutions that can be applied to uplift the living standards of the people,” said Ms Agatha Gikunda, Nokia’s Solutions Manager for East and Southern Africa. Ms Gikunda said Nokia was ready to assist and collaborate with innovators with ground- breaking applications and solutions that could impact on the economy and help generate employment opportunities, especially for young people. Interested innovators can learn more and enter their submissions at www.callingallinnovators.com.
About Nokia Growth Partners
Nokia Growth Partners is a leading global growth stage venture firm focused on mobile technology, services and media. Nokia Growth Partners is funded by Nokia to provide superior returns and investments into companies, firms, and people that are changing the face of mobility, communications, and the internet. Nokia Growth Partners works closely with the promising companies adding value through deep domain expertise and network in the mobility market combined with many years of venture investment experience. Nokia Growth Partners offers companies in which it invests a global engagement model through its presence in the U.S., Europe and Asia. For more information visit: www.nokiagrowthpartners.com.
About Forum Nokia
Nokia’s global developer program, Forum Nokia connects developers to tools, technical information, support, and distribution channels they can use to build and market applications around the globe. From offices in the U.S., Europe, India, Japan, China, and Singapore, Forum Nokia provides technical and business development support to developers and operators to assist them in achieving their goal of successfully launching applications and services to consumers and enterprises. More information is available at www.forum.nokia.com.
About Nokia
Nokia is a pioneer in mobile telecommunications and the world’s leading maker of mobile devices. Today, we are connecting people in new and different ways – fusing advanced mobile technology with personalized services to enable people to stay close to what matters to them. We also provide comprehensive digital map information through NAVTEQ; and equipment, solutions and services for communications networks through Nokia Siemens Networks.
The inaugural Mobile Web East Africa is the next in a series of progressive and innovative events to focus on one of the most important technological advances of the 21st century. By utilizing the exceptionally interactive roundtable format, the 2 day conference promises to be one of the leading events of 2010, where the future development of the mobile internet, mobile applications and mobile ecosystem in the region will be discussed and mapped. For more details, go to http://www.mobileeastafrica.com
In the news this week, Equity Bank and Safaricom have announced a strategic partnership for M-Pesa. Basically, any of M-Pesa’s 8 million subscribers in Kenya will now be able to make card-less drawings from any of Equity Bank’s 550 automated teller machines (ATMs) throughout Kenya. This is not the first time that Safaricom has made such strategic partnership since it already does the same with PesaPoint’s nationwide ATM network in Kenya.
Equity Bank is clearly positioning itself to become the preferred bank for mobile money services since it announced last month that it had partnered with the YU network to act as an agent for its extensive branch network in Kenya (this was covered in a post on this blog as well). As of this writing, Equity Bank has the largest number of account holders in Kenya with over 4 million. The latest partnership move would enable Equity Bank to start acquiring more account holders as well as selling additional services.
Its finally starting to happen. E-commerce is coming to Kenya. It looks like 2010 will be the year we start seeing e-commerce become commonplace and highly used. Why do I say this? One only has to look at the number of local online e-commerce stores that have started to flourish to get an idea of what is to come. However, one of the major issues in realizing widespread e-commerce is that internet-based payment systems are still being established in Kenya and credit card penetration is somewhat limited. Nevertheless, it looks like the mobile phone is going to become the preferred payment platform following the massive success of Safaricom’s M-Pesa.
At this time, the largest e-commerce player in Kenya could potentially be Kalahari.co.ke. This is a site which is a spin-off of the highly popular South African online store Kalahari.net. In many ways, Kalahari.co.ke mimics its South African predecessor with the exception of the “Kenyan” localization. Kalahari.co.ke is comprehensive in that you can buy books, electronics, music, movies, toys, gifts and vouchers, all in local currency. The only caveat with Kalahari.co.ke is that it lacks online credit card payments (currently) so one has to use M-Pesa or direct bank deposits to make payments.
Another start-up player in the Kenyan e-commerce space is ElimishaOnline.com. ElimishaOnline.com bills itself as an online bookstore with a broad range of reasonably priced and high quality books. Like Kalahari.co.ke, the current payment modes not only include M-Pesa and direct bank deposits but also Zain’s Zap and cheques as well. What I quite like about ElimishaOnline.com is that they have (initially) focused on books and are therefore following the Amazon.com path which eventually expanded into other product categories but is still best known for being the leading online book retailer.
As reported in the Business Daily this week, other niche players for local e-commerce in Kenya include TotallyToto.com which is focused on childrens clothing and accessories as well as Bagalicious.co.ke which deals almost exclusively in ladies handbags, as well as other accessories. Another niche player for ladies clothing and accessories is styleconnection.co.ke. One of the oldest e-commerce sites in Kenya is MamaMikes.com which has been largely focused on the diaspora to whom it sells goods and services for friends and family in Kenya – now would be a good time for MamaMikes.com to go after the local market too.
Going forward, what will need to happen is for these web sites to expand into credit card payments as well as other modes of payment such as PesaPal which enables mobile-to-web payments seamlessly. In this manner, customers will have a much better online shopping experience and this would lead to a world-class e-commerce market for Kenya.
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