Sunday, March 6, 2011

Equity Bank’s Mkesho partners with Safaricom Mpesa service

Safaricom and Equity bank signed an agreement to partner through Mkesho and Mpesa services so as to allow their customers deposit and withdraw cash from their bank accounts using Mpesa service. The launch of Mkesho comes at a time when majority of Kenyans are turning to mobile money transfer services like Mpesa, Airtel money, Orange money and Yu cash to make cash transactions like payment of utility bills and purchasing of goods and services. Customers with both Mpesa and Equity bank’s account will be able to get loans from Equity bank.

 Both Safaricom and Equity bank enjoy a mouth watering market share in the telecommunication and banking sector respectively, their partnership through Mpesa and Mkesho was widely expected. Equity bank boasts to have banking solutions designed for the ‘common mwananchi’ low income earners. On the other hand, Mpesa from Safaricom was designed to enhance efficiency in cash transactions like payment of utility bills and money transfer with minimal fee favorable for the ‘common mwananchi’ low income earners.
The two firms both expect to increase their revenues through their partnership in Mpesa and Mkesho services. Mpesa account holders will be able to deposit and withdraw cash as well as get loans from equity bank. Likewise, Equity bank account holders through Mkesho will be able to make cash transactions from their bank accounts using mobile phones. In addition, compare the number of Mpesa agents’ country wide (more than 17,000) to the number of Equity bank branches (less than 100); the later does not add up.
Apart from loans, deposits and withdrawals, Mkesho will also aid in money transfer and insurance services. Deposits to equity bank accounts will be done by depositing money into your Mpesa account through Mpesa agents (you won’t be charged a penny) and later transferring to the bank account, no charges from equity for depositing, you will be charged the normal fee for sending cash through Mpesa system (by Safaricom).
In order to withdraw cash from your Equity bank account using a mobile phone, you will need to transfer the amount from your equity account via Mkesho to your Mpesa account (note that you will be charged for this transaction by Equity) and later withdrawing money from your Mpesa account through an Mpesa agent, you will also be charged for this transaction by Safaricom.
 Now the big question is who is gaining more? Both companies gain from the transactions as all withdrawals are charged by both companies but Safaricom will have an edge from the fee charged on sending cash from Mpesa to Equity bank account. The success of this partnership between equity bank through Mkesho and Safaricom through Mpesa has attracted other players in the banking sector to forge partnerships with Safaricom’s Mpesa service. The advancement of technology in Africa is slowly intruding the banking sectors with more innovations expected in future.
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