Mobile phone banking becomes of age

TRANSFEREING money using the services of cell-phone network operators is increasingly becoming a common phenomenon among the more than 14 million Tanzanians who currently have access to mobile telephony Tanzania is home to a doxen mobile telephone service providers, three of whom are already providing money transfer service as a matter of routine. These are with the call signs shown in brackets, Vodacom (M-Pesa), Zantel (Z-Pesa), and Zain (Zap). Also loosely known as mobile banking, money transfer service through cellular telephony is made possible through State-of-the Art- technologies which are part of the disposal of the respective company’s subscribers. Cellular money transfer were pioneered in East Africa by the Kenya based Safaricom company in 2007, coining the code M-Pesa for the service. That code was later adopted by Vodacom Tanzania Limited. Zantel launched its Z-Pesa service in Tanzania in late 2007, while later-comer Zain came out with its Zap in June 20-09. The system is among the easiest ways of sending money within the country whether one has a bank or not. One can pay for goods and services purchased by one using the system. If nothing else, this is one more step in co signing to the dustbin of history the need for one to carry huge sums of money around and about. Questions have been raised in certain quarters whether or not the mobile banking services now provided by the cellular phone providers do not impinge upon services that have traditionally been provided by the banks on main street.

Mobile phones have provided an easy way to send money to the people in rural areas, this innovative technology has relieved many local people in remote areas from walking a far distance to towns in order to get their cash sent by their relatives.

This is especially considering that subscribers who wish to access the services must first and foremost open an account with their respective network provider, Vodacom, Zantel, and Zain in the case of Tanzania. Dopes not that make the cellular firms virtual bankers one might very well ask according to the Bank of Tanzania (BOT). In any case mobile banking has come as a saviour to residents in rural areas in the country who do not have direct access to the banks. A subscriber who opens the requisite account can send up to Tshs. 500,000/- within the country in a single transaction at least for M-Pesa clients. But costs of the services differ among the service provided and in relation to transaction values. For example, Zain’s Zap service charges Tshs. 1,000/- when one sends between Tshs. 29,000/- and Tshs. 100,000/- in a single transaction. The more mponey pone sends the higher the charges Vodacom charges Tshs. 600/- for a single M-Pesa transaction whose value ranges between Tshs. 20,000/- and Tshs. 50,000/- call for higher charges. However, Vodacom, does not charge when one pays for a service like buying a LUKU prepaid electricity units. For its Z-Pesa services Zantel has put in place graduated charges. The charges vary according to the amount one sends for instance, as well as the network used. For instance, it costs Tsh. 225/- to send a sum between Tshs. 10,000/- and Tshs. 19,999 on its network and Tshs. 720/- if using a different cellular network. Currently Zantel (Z-Pesa) has over 1,100 customers on its books. The other two service providers, Vodacom (M-Pesa) and Zain (Zap) were unable, unwilling or not ready to divulge the number of other mobile banking account holders. Apart from money transfer through cellular network service providers, some bus companies are also playing a considerable role in transferring money across the land. However, this type of service is yet to be formally recognized by BOT. In nay case the bank says it plans to study the system in 2009/10 financial year so as to decide whether to endorse it in the country or not.