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More banks join the mobile money space for survival

By Faridhah Kulabako

Added 27th February 2017 02:45 PM

The momentum for partnerships between the telecommunication and banking industries is in high gear as the two seek to exploit the power of synergies to grow their revenues.

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The momentum for partnerships between the telecommunication and banking industries is in high gear as the two seek to exploit the power of synergies to grow their revenues.

The gap between commercial banks and mobile money service providers continues to get thinner by day as the two service providers continue synchronising service provision to offer seamless customer experience.

The momentum for partnerships between the telecommunication and banking industries is in high gear as the two seek to exploit the power of synergies to grow their revenues.

Synchronisation has seen the capabilities of mobile money grow from mere sending and receiving of money using a mobile phone to paying for almost everything from utility payment to savings and loan products, which were originally done in a bank.

The trend has made it become increasingly difficult for banks to stay competitive in the market without partnering with telecoms on their mobile money platforms.

Banks further harmonized their operations with telecoms to allow customers access their bank accounts using their mobile phones, through the mobile money platform.

One is for instance able to check bank account balance, deposit money from their mobile money account into a bank or pull money from a bank account into the mobile money account.

Even banks which were originally reluctant to open up to mobile money because their major focus was on wealthy clients, have also embraced the trend.

Standard Chartered Bank for instance launched the mobile money wallet last week, in partnership with MTN Uganda to allow the telecom’s mobile money registered customers who bank with Standard Chartered to transfer money  their bank account to multiple mobile phone wallets from any part of the world.

The product will work on both the bank’s online banking and the mobile App platforms.

Speaking during the launch of the solution in Kampala on Thursday, the bank’s outgoing Chief Executive Officer Herman Kasekende said that the development will allow its customers to effectively reach out to their beneficiaries with timely payments, while mitigating the risks of fraud and theft associated with cash payments.
 
“This is a unique proposition that will ensure that customers have the flexibility to transfer money from the accounts to multiple mobile money wallets both within and outside Standard Chartered,” he said, adding that the collaboration will enhance the bank’s ability to extend financial services countrywide.

MTN Uganda General Manager for Mobile Financial Services, Phrase Lubega, said: “Mobile wallets are especially useful to clients to effectively reach out to their beneficiaries with timely payments, while mitigating the risks of fraud and theft associated with cash payments.

Lubega said the partnerships are growing both the banks and telecoms by bringing money that was originally outside the formal financial system into the system to promote financial inclusion.

MTN Uganda has 8.4m subscribers registered on its mobile money platform. It has partnered with 19 banks to facilitate transactions between the telecom company and banks.

Enhanced partnerships are also expected to see banks close some of the costly and unprofitable branches in favour of mobile banking.

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