Paynet - We're No Threat to Banks in Kenya
Electronic payment firm Paynet has downplayed fears that mobile money transfer services are a threat to conventional banking. Instead, the company views its recent tie-up with a mobile cash transfer product as a way of widening the formal banking system by drawing in people without bank accounts.
A week ago, Paynet through its subsidiary, PesaPoint, signed a deal to offer Safaricom money transfer service, M-Pesa through its Automated Teller Machines (ATMs). The partnership also targets non-account holders who are now able to transfer money through PesaPoint cash machines.
"I do not see any conflict since the opportunity for card-less transactions is huge in Kenya since the majority remain unbanked," said Paynet Group boss, Bernard Matthewman on Friday.
There are 110 PesaPoint ATMs in 45 towns countrywide. Already, PesaPoint has created panic among Safaricom's 3,378 agents countrywide by riding on the 24-hour convenience and security features that its network offers.
M-Pesa agents, on the other hand, operate on a 12-hour daytime basis and are required to close shop by 6 pm every evening. They also have to keep enough cash or float, making cash handling a security threat that has seen many reluctant to transfer large sums of money. The maximum daily transaction value for M-Pesa clients is Sh70,000 (US$960) .
On security issues concerning the unbanked and the cashless transactions, Matthewman defended the Paynet-Safaricom model as a secure solution. Paynet was the brain behind the development of the technical solution and also provided the interface to the Vodafone system that drives M-Pesa.To enhance the security of the card-less transactions, precautionary measures had been undertaken.
The phone used for transactions must be registered under M-Pesa, the Personal identification Number (PIN) sent from the user to the user is unique for each transaction and expires after two hours.This effectively reduces the risk in compromising the PIN while also enhancing its functionality.