Barclays launches free money transfer service
Posted Friday, September 7 2012 at 17:38
The battle for control of the international mobile money transfer services has intensified with the entry of Barclays Bank.
Barclays Bank of Kenya on Friday unveiled its service dubbed Pingit that will see Kenyans living in the United Kingdom send money home for free.
Recipients, who must be Barclays customers, will be notified about the amount transferred through a text message on their phone.
This now sets the stage for a major price war in the sector that has attracted several new entrants targeting diaspora remittances.
“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 banks managing director Mr Adan Mohamed said at the launch.
It is a one way transaction from UK in which customers from the country will be able to send upto Sh100,000 (£750) per day. The money will be converted into Kenyan shillings depending on the prevailing exchange rates.
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 is plans to use it as a value added service to attract and retain customers.
“We will not make money directly from the service give 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 said.
This makes Kenya the first country on the continent in which the bank has launched the service.
To transfer money to Kenya, customers in 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.
“Foreign direct remittances are in excess of $1billion and it only makes sense that we take part of the cake and there are over 200,000 people living in the UK who were born in Kenya,” Mr Mohamed said.
It now joins Nation Media Group (NMG) which last month launched a money transfer service dubbed NationHela that allows customers to send and receive money from anywhere in the world.
Safaricom also launched its international M-Pesa services in the UK last year and is also in a partnership with global money transfer services provider Western Union.
Equity Bank signed a deal with mobile phone firm Essar allowing its account holders to receive international remittances through the yuCash transfer system.
It comes at a time when it rival banks including the Kenya Commercial Bank and National Bank have revamped their mobile money products
Recent data from the Central Bank of Kenya (CBK) shows that the country received remittances of Sh50.67 billion ($596.23 million) in the six months to June this year, rising from Sh34.14 billion ($406.5 million) in a similar period last year.