CBK Licenses Another Cash Transfer Service Firm in Kenya
Competition in the mobile money transfer business is heating up with the entry of a new money transfer system which allows transactions across Safaricom, Yu, Orange and Zain.
MobilePay, the information technology company behind the Tangaza brand, joins Safaricom's M-Pesa, Zain's Zap and Essar Telecom's yu cash, as the mobile phone becomes the main force in bridging the banking divide.
The firm is carrying out a nationwide agent recruitment drive for entrepreneurs to help it expand go countryside. "We are launching the system countrywide and those who will join will be able to take deposits and also carry out withdrawal transactions through a trust account in Kenya Commercial Bank," Quentin Savage, a manager at Tangaza, said.
Recently Diaspora Investment Management Ltd secured a stake in Community Development Systems Ltd, the holding company that owns Tangaza. According to Savage, the diaspora has endured high costs of remittances from existing international money transfer companies and banks, and the system, while enabling Kenyans to perform local transactions, will assist those abroad to send money back home.
In future, Tangaza will allow dealers to convert into agent bankers once all statutory obligations are met for individual banks and after the Central Bank of Kenya allows them to carry out cash deposits and withdrawals.
Stephen Mwaura, the head of payments at the Central Bank of Kenya on Tuesday confirmed that Tangaza has been licensed to perform money transfer business. "We want to enhance efficiency. We are doing this through increasing competition with the entry of more players," said Mwaura.