Middle East and African mobile telecommunications provider Zain has partnered with banks including Standard Chartered and Citi to offer mobile banking to over 100 million people in East Africa with the launch of its new service, Zap.
Zap will be initially available in Kenya and Tanzania prior to launch in Uganda. The service will allow Zain customers in the three countries to use their mobile phone to pay bills and pay for goods and services, make peer-to-peer payments to other Zain customers or transfers to bank accounts, manage bank accounts, withdraw cash and top-up and transfer airtime to others.
Dr. Saad Al Barrak, Zain Group’s CEO said: "The launch of Zap represents the latest chapter in our work to push the boundaries of mobile communications. For any market in the world, the combination of services we are providing would be exciting; but when set in an African context, the implications are especially profound.” He further added “With a potential customer base of over 100 million people in Kenya, Tanzania and Uganda, many of whom have never had access to formal financial services, we believe Zap will reshape the future of banking in Africa."
Zain says Zap will provide customers with increased security and flexibility, reducing the need to carry cash and ensuring payments between friends and family remain secure. A password is needed for each transaction and the service is protected through a state-of-the-art security application.
Zain customers can sign-up for free for the new Zap banking and payment services by completing an application form and handing it over to registered Zain agents in tens of thousands of villages, towns and cities across East Africa. Zain will then provide the customer with a mobile wallet, which will allow them to use their mobile phone in much the same way as a bank account debit card and manage their money through their handset. The service is supported on all handsets including ultra low cost handsets (ULCH) that Zain is currently rolling out across the continent.
Zain and its partners are confident that Zap will increase access to banking services in Kenya, Tanzania and Uganda, where formal banking services are largely restricted to urban populations. Eighty per cent of Kenya's and ninety-five per cent of Tanzania's and Uganda's populations do not have currently have access to banking services. Zain, in partnership with Citigroup and Standard Chartered Bank, is ensuring that the services meet all the required in-country banking regulations as stipulated by the central banks for the launch of Zap services. In addition Zain’s banking partners will facilitate payments and settlement processes in accordance with the terms and conditions agreed with the in country banking regulations.
Standard Chartered Bank’s Area Head of Consumer Banking - East Africa, Kariuki Ngari said: "We are extremely excited to be partnering with Zain on this ground-breaking initiative. M-commerce has the potential to transform banking in Africa and will help overcome many of the obstacles presented by providing banking services to remote and rural communities. We're proud to be working with Zain at the forefront of this mobile banking revolution."
Standard Chartered Bank launched its own mBanking service in Kenya last week, becoming only the fifth bank worldwide to offer mobile banking on the USSD (Unstructured Supplementary Service Data) platform. Finextra was unable to reach Standard Chartered to clarify how it is positioning its Zain partnership with regard to its own offering.
Sridhar Srinivasan, Global Transaction Services Head, Sub-Saharan Africa, Citi, said of his involvement with Zain: “We are proud to be part of this initiative that will transform the banking environment in Tanzania allowing people to access financial services everywhere. The Zap offering is a true innovation, extending the reach of financial services to every corner of this country and stimulating the payments system through accessible mobile technology. Our successful partnership with Zain enabling this groundbreaking service is a great testament of our commitment to the economic development of the countries where we operate, by promoting financial inclusion.”
Chris Gabriel, CEO Zain Africa said: "Research has shown that m-banking and m-payments can help lower the transaction costs of money transfer, increase the flow of money by making it easier to send smaller amounts and introduce those without bank accounts to a means of secure financial management. By enabling people to use their mobile phones as mobile wallets, we hope to deliver lasting benefits not just for our customers, but also for the economies of Kenya, Tanzania and Uganda."
Zain plans to roll-out the enhanced Zap service to the rest of its African and Middle East network following the East Africa launch in Kenya, Tanzania and Uganda. During a three month trial phase the service was used by several international companies including Coca Cola who used it to pay their dealers in Tanzania.
By using Zap millions of customers will be able to pay their electricity bills in Kenya and Tanzania, while Zain also plans to increase the number of services that can be paid for using Zap as part of its aim to transform the use of money in the Africa.
As part of its corporate social responsibility programme Zain is also funding communication in several remote rural areas which have been designated Millennium Villages across Africa. Using Zap, Zain customers and members of the public will be able to make donations to fund the Millennium Villages project. More than 400,000 people live in the Millennium Villages and the project is investing in them and their communities towards finding a sustainable end to extreme poverty. Members of the public around the world will be able to make donations using Causes on Facebook and Zap to the Millennium Villages. Causes leverages online social networking for offline social change. More than 30 million people around the world use Causes to have an impact on the issues that matter most to them, making it the world’s largest platform for philanthropy and civic engagement.
Zain was the first mobile company to introduce phone-to-phone airtime credit transfer service in 2005 (Me2U). Currently over US$10 million worth of airtime transfers take place in Kenya, Tanzania and Uganda each month.
Zain was established in 1983 in Kuwait as the region’s first mobile operator. Since 2003, it has grown significantly becoming the fourth largest mobile network in the world in terms of geographic presence with a footprint in 22 countries spread across the Middle East and Africa providing mobile voice and data services to more than 60 million active customers.