Barclays’ new product stirs up fight for a share of diaspora remittances
Posted Friday, September 7 2012 at 19:00
- Kenyans living in the United Kingdom can now send home up to Sh100,000 per sender per day for free using the lender’s Pingit mobile application
The battle for control of international mobile money transfer services has intensified with the entry of Barclays Bank.
Barclays Bank of Kenya yesterday unveiled its service dubbed Pingit that will see Kenyans living in the United Kingdom send money home for free.
The one way transaction from UK with a Sh100,000 (£750) per day limit per sender, is the latest push by companies to get a slice of the over Sh85 billion sent from the diaspora annually.
Major price war
“Kenya has done well on mobile penetration but the missing link has been that most bank products are limited to their customers and restricted to domestic transactions,” the bank’s managing director, Mr Adan Mohamed said at the launch.
The new product sets the stage for a major price war in the sector that has attracted several new businesses targeting diaspora remittances.
Nation Media Group last month launched a money transfer service named NationHela that allows customers to send and receive money anywhere in the world.
Safaricom, in a partnership with global money transfer service provider, Western Union, launched its international Mpesa services in 2010.
Equity Bank signed a deal with telecom services provider, Essar, allowing its account holders to receive international remittances through the yuCash transfer system.
“It only makes sense that we take part of the cake,” Mr Mohamed said. There are over 200,000 Kenyans living in the UK.
The money transfer services, which has already been launched in UK by its parent company, Barclays Plc, is, however, restricted to Barclays bank customers — a signal that the bank plans to use it as a value added service to attract and retain customers.
“We will not make money directly from the service given that it is free, but there are many indirect benefits to our customers. Currently, the service will be limited to Kenya and the United Kingdom given that there are regulatory approvals that are required before unveiling it in other countries,” he noted.
Following the launch, Kenya becomes the first country on the continent in which the bank has launched the service.
To transfer money to Kenya, customers in the UK will need to have a bank account in any bank, a smartphone and a UK mobile number. The smartphone will be used to download a Barclays Pingit mobile application.
The service comes at a time when its rival banks, including the Kenya Commercial Bank and National Bank, have revamped their mobile money products.