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Airtel unveils new Visa debit card for mobile cash deals

February 20, 2014


Airtel Kenya Thursday introduced a debit card that will allow its mobile money transfer customers to withdraw money from Visa automated teller machines (ATMs) across the world.

The deal will offer Airtel money subscribers access to about 10,000 ATMs in Kenya a boost to the telecom whose agency network is smaller than that of M-Pesa.

M-Pesa accounts for nearly 90 per cent of mobile money agents in what has cemented Safaricom's dominance in the cash transfer business.

The Airtel Money Visa debit card, a partnership between the mobile operator, Visa and Chase Bank, also allows the telecom firm's subscribers to settle bills using the plastic money.

Airtel Kenya managing director Shivan Bhargava said that the partnership would solve the problem of its agents lacking float as well as widen its agency network.

The telco has about 15,000 agents, a figure slightly above a fifth of the 65,547 which its rival, Safaricom, had in March. Safaricom has since grown its network.

"At times our agents don't have sufficient cash which is an inconvenience to our customers," said Mr Bhargava.

"With this partnership customers can now comfortably withdraw money from any of the Visa-enabled ATMs across the country and internationally."

It will cost a subscriber Sh50 to withdraw any amount of money from Kenswitch ATMs and Sh30 when using a Chase ATM. Airtel subscribers will pay Sh100 to withdraw money from a Visa-enabled ATM in Kenya and Sh250 outside the country.

The deal comes days after Safaricom rejected the push by Airtel and yu to use M-Pesa agents to offer their mobile phone cash transfer.

READ: Airtel and yu's push to share M-Pesa agents rejected

Airtel Kenya petitioned the competition watchdog to take action on Safaricom for barring M-Pesa agents from offering rival's mobile payment services, arguing that the practice amounts to an abuse of dominance.

But Safaricom reckons that its rivals have an equal opportunity to grow their agency network.

Safaricom's market share in the mobile money market stands at 73 per cent in terms of customers (18.1 million) and 88 per cent in terms of agents (78,856), according to the latest official statistics.

This means that the bulk of the mobile money transactions have been restricted in Safaricom's network at time when most users are switching to paying for goods and services through their phones.

The value of money transferred through mobile phones rose by 23.4 per cent last year to Sh1.9 trillion, according to the Central Bank of Kenya.

M-Pesa accounted for 18 per cent of Safaricom's Sh69.2 billion sales in the six months to September, compared to four per cent in 2009.

Though it is possible to send money across networks, the transfer process is complex and costly compared to sending cash within a network. For instance, an Airtel subscriber can send money to an M-Pesa user who will receive a short text message notifying them of the cash sent.

But the Safaricom subscriber will have to get an Airtel money agent to withdraw the money. The challenge is that Airtel has fewer agents compared to Safaricom.This adds new dimensions to factors that prevent consumers from changing mobile phone service providers.

Sending money from M-Pesa to a customer on a rival platform also costs between double and triple the charges to another M-Pesa subscriber.

M-Pesa's tariff structure shows costs Sh237 to send Sh20,000 from M-Pesa to Airtel Money while transferring the same amount to another M-Pesa user costs Sh55.

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Source: Business Daily (Kenya)

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