Equity Bank has said that sending money on its mobile banking service will be free setting the stage for a possible price war with Safaricom, which charges its customers between Sh1 and Sh110 to send cash on M-Pesa.
Customers of the bank’s mobile money service, Equitel, will pay a maximum of Sh25 to withdraw any amount from their phones, compared to between Sh10 and Sh330 charges on M-Pesa.
The bank said it would launch its mobile banking service in two weeks, which would include issuance of the controversial thin SIM cards that function by acting as a bridge between the primary SIM card and the mobile phone.
“We have received all the regulatory approvals from CA (Communications Authority) and from the Central Bank of Kenya. We have also scaled up the pilot and the Equitel SIM cards are now available in all banking halls,” said Equity chief executive James Mwangi on Wednesday.
Safaricom, Kenya’s largest telco and leading provider of mobile banking services, has opposed issue of the thin SIMs claiming that they pose a risk of data theft and hacking for its customers.
Two court cases have been filed in court in an attempt to block Equity’s intended launch of the controversial thin-SIM technology.
The CA has given Equity the go ahead to pilot the technology in one year, during which the service could be withdrawn if it is proved to breach customers’ personal data.
But Mr Mwangi has defended the Equitel SIM card, saying data transmission would be encrypted to minimise chances of hacking.
“Equitel’s SIM is a banking delivery channel, there is a misconception that Equity is setting up a telecommunications firm,” he said.
“What Equity is doing is giving its customers a delivery channel that enables them to do banking on their phones and laptops, but since we are using a SIM we will offer voice and data as value add.”
A week ago a Taiwan-based technology firm Taisys Technologies said it had delivered its first batch of the ultra-thin SIM cards to Equity, but the lender has not yet started issuing them out. It has instead been giving out the ordinary SIM cards to its 8.7 million customers across the country in the past few days.
Through its subsidiary, Finserve, Equity obtained a licence from the telecoms regulator to roll out a mobile virtual network operator service riding on the Airtel infrastructure.
Equity account holders will access their accounts through mobile phones and transfer money to customers subscribed to other mobile cash services such as M-Pesa, Airtel and Orange Money.
A user could also transfer any amount from the Equity account to other bank accounts, pay bills or use it to buy goods and services.
Equitel customers can only top up their airtime by buying credit from their Equity Bank accounts or Equity agents — a move that is set to help the firm cut costs associated with printing and distribution of scratch cards.
Customers also have an option to port their current mobile numbers, which would see them migrate to Equitel without losing their old contact digits.
Equity has put the charges of its voice and data services under wraps, but unconfirmed reports indicated that calls within the network would cost Sh3 per minute while calls to rival networks would be charged Sh4.
Safaricom charges Sh4 per minute for calls within and those headed to the rival networks. Orange charges Sh2 within the network and Sh3 to calls placed to either Safaricom, Airtel or yuMobile. Airtel charges Sh3 for calls within the network and Sh4.20 for calls to other networks.
On Tuesday, data specialist Bernard Murage went to court to challenge the one-year trial period granted by the regulator, claiming it could expose customers to possible transmission of personal data to third parties.
BUSINESS DAILY By OKUTTAH MARK