Africa’s mobile banking apps are a serious weapon in their war against the telcos

“The money that goes through the MTN eco-system in one month is more than the money that gone through all the commercial banks since inception”, that’s according to Vincent Kiyingi, Head of IT at Pride Microfinance Limited Uganda.

The wake of mobile money services took the banking sector completely by surprise starting with Safaricom’s MPesa mobile money transfer service in Kenya. The service, as of Safaricom’s Half Year 2013 -2014 Results, has 18.2-million registered users of which 11.6-million are active users. The network’s strongest weapon is its widely distributed agent network which currently stands at 78 856 MPesa agent outlets countrywide. The value of P2P (person-to-person) transfer per month is KES 77.3-billion, while the value of P2B (Person to Business) per month is KES 9.9-billion. The value of B2P (Business to Person) per month is KES 7.6-billion, according to this blog by Peter Gakure Mwangi, a mobile payments professional based in Nairobi, Kenya.

In Uganda, mobile money transactions exponentially grew by a record 211 per cent in 2012, posting US$4.5-billion in transactions compared to US$1.4-billion the previous year. The Uganda Communications Commission (UCC) places the number of mobile subscribers in the country at 15-million, with 8.9-million of them using mobile money transfer services. The traditional banks only have about 3.5-million account holders.

As you can tell, the numbers speak for themselves. Mobile money has changed the way we live faster than the banks ever did.

However, the banks aren’t about to throw in the towel. They could have lost several battles, but they have not lost the finance war.

The banks are learning about the convenience, speed and agility that the networks give their customers. Through cutting bureaucratic processes, the financial institutions are, to borrow Facebook’s mantra, “breaking things and moving fast”.

Already more than 10 banks in Uganda have responded to competition from the networks through innovating their own mobile banking apps. These use the same platforms — USSD and SMS — that run the networks’ mobile mobile services. With this, the banks have further brought more convenience to their customers beyond ATM (Automated Teller Machines) that cut short time customers spent at the banks.

Besides simply checking your account balance, transferring funds from one account to another, requesting for a check book, the banks have incorporated utility and service payment in their mobile Apps further bringing convenience to their customers. Almost all the 10 banks with mobile banking platform enable their customers to quickly pay their water, electricity, digital pay-TV bills, pay for school fees, load airtime among others.

Even when it comes to money transfers which the Telecoms took over by storm, some banks are innovating beyond using Money Gram and western Union for money transfers. Barclays bank (Uganda) for instance launched a new service at the beginning of this year that allows a Barclays bank account card holder to send money to anyone that can access a Barclays bank ATM.

Instead of withdrawing money at an ATM and then looking for the nearest Mobile Money agent to credit your Mobile Money account so you can send money to one of your relatives, why not walk into an ATM or use the mobile bank’s app, instruct the bank to do the sending and tell the recipient to receive it at the nearest bank’s ATM? That’s exactly what Barclays is helping its clients do.

With these mobile apps, the banks give their customers no reason whatsoever to use Telecoms’ mobile money services, since the same convenience, mobility and speed touted by the networks are offered by the traditional banks.