Category Archives: Remittance

PayPal in Kenya

At long last, PayPal is now officially available  in Kenya for usage without the worry of getting deactivated . Paypal, which has 137 million users, in 193 countries, has been in Africa for three years in a partnership with FNB (SA), and Kenya’s Equity Bank becomes their second partner in Africa. The service is already active in Kenya for local merchants such as freelance contractors and tourism sites to use on their websites to accept secure global payments.


At the launch, the Equity Bank CEO said that there were possibly 100,000 users in Kenya with PayPal accounts, but who could not withdraw their money, until now. One needs to have a debit or credit card that allows online transactions to use and to withdraw cash from PayPal which will be done through a customer’s account at Equity Bank – and this may take a few days, and attracts a 1.5% fee on top of PayPal’s charges. For now, one can’t move money from a bank account to PayPal, but only use cards to send money.  

Reactivating Nation Hela

The last few days have been spent trying to reconnect a Nation Hela card, that has been not much used since the launch just over a year ago.  The card was active, but the registration documents were never uploaded, rendering it inactive after a short period of usage. 
The issuance of cards, back office, registration, and payments are handled by Diamond Trust bank and their branches are the easiest way to obtain the cards, as well as load cash onto the prepaid card. For some reason, top ups with M-pesa don’t reflect for a few days.
The menu is also on one’s phone and can be accessed by checking *348#  and each use of the card is confirmed by an SMS to one’s phone. 

Somalia’s Remittance Lifeline

This week in Nairobi on September 11, there was a discussion forum on the importance of remittances from the Somali diaspora to the people in Somalia and it was attended by representatives of the Rift Valley Institute, ADESO, Oxfam and Dahabshil. 

It was held just a few weeks ahead of a September 30 deadline which Barclays Bank in the UK have set as the date that they will cut off remittances to four companies including Dahabshil and the forum was on the reasons behind that decision and the impact it will have on Somalia.  The country receives about $1.5 billion a year in remittances (with about $150M coming from the UK) – which is more than foreign aid or private investments, and these funds support 40% of the population and amount to a third of the country’s GDP. Somalia was said to have the largest number of asylum seekers in the world in relation to their population, and they are first generation immigrants with strong links to their home country – hence a higher level of remittances to reduce hardship and insecurity back home. 

The participants at the forum emphasized that the cutoff of vital remittances to Somalia was not triggered by any transgression, but rather it was a knee-jerk reaction to repeated bad news about Somalia and misunderstandings that remittances support money laundering, piracy or terrorism. Dahabshil and other Hawala-like companies have complied with all requirements set by the UK and US, and conduct due diligence in handling the remittances (which at an average of $300 to individuals are relatively small), in a country without a banking system, commercial courts and no formal identification card systems – using agents, village and clans to triangulate and ensure that money goes to the intended recipients – all without bringing in dollars to the country. Dahabshil, which the New York Times reported to have 286 locations around Somalia (compared to one for Western Union), also know that there are gaps in the system meant to weed out suspicious transactions, that they can work with the UK to fix and improve without facing the threat of closure.

Barclays is the last large UK bank facilitating these transfers to Somalia, and there was some discussion about coming to some accommodation with them such as asking them to delay the cutoff by another 12 months to allow for partner institutions to develop alternatives, as well as the possibility of partner institutions setting up a trust fund to cushion Barclays in the event that the UK authorities levy a fine for continuing to facilitate remittances to Somalia. The finality of all the Barclays decision may be resolved at a  Ministerial meeting on Monday next week in the UK or a later EU meeting in Brussels.

Mobile & Card Payments across East Africa

A new unsecured card solution was launched by afb last week that will allow customers to instantly spread the cost of their purchase at participating shops into affordable 6-month repayments. afb have signed up 52 merchants like Baus Optical, Cambridge Opticians, Fabguru Shoes, Kitengela Glass, and local supermarkets (Tumaini, Home Depot, Homemade) and are also signing up other merchant shops where consumers will be able to apply for cards and get them approved & issued in the stores ahead of making a purchase.  afb settles the transaction amounts directly into the retailer’s bank account, and the customer makes repayments via M-Pesa. afb next hope to venture into loans and insurance in Kenya.

How large is the card market? A Central Bank of Kenya reports showed that there were 9 million debit cards and 140, 000 credit cards in use in Kenya in 2012.

In terms of mobile money, CBK data showed that 21 million Kenyans moved Kshs. 141 billion ($1.65 billion) via 53 million mobile money transactions during February 2013.

CBK has also come up with new mobile money rules that target money laundering. They require that operators link different accounts opened by a user with a single ID card, flag accounts that move more than Kshs. 100,000 (~$1,175) per day or 300,000 (~$3,530) per week, have audit trails, institute systems to handle customer complaints and retain transaction data for 7 years. 

KCB and Western Union who have an account-based money transfer service (ABMT) in Kenya will extend it across East Africa this week, enabling KCB customers to receive money from Western Union directly into their accounts.

Kenya Airways has a 1.5% fee on all credit card transactions (owing to high processing bank charges).

Following a spate of fraud incidents last December, the Kenya Bankers Association (KBA) has launched an ATM safety campaign dubbed “Be Alert” or “Kaa Chonjo” which include tips such as cover the PIN’s with their hands (at ATM’s), and not sharing PIN numbers with anyone (including spouses). 

KBA also announced the shift by Kenyan banks to the new Europay, MasterCard and Visa (EMV) technology to ensure better security of cards.

90% of KenyaPower pre-paid electricity tokens are now purchased using #Mpesa – according to a Safaricom Business ad.

Diners can now pay restaurant bills via M-Pesa under a new partnership between Kopo Kopo, Eat Out and Safaricom. Restaurants accept payments at 1.5% per transaction.

MasterCard and Equity Bank introduced PayPass enabled debit cards in 5 African markets which will enable merchants to receive payments via low-cost add-ons linked to applications on their mobile devices (such as a smartphone or tablet) 

Mastercard and I&M Bank launched a multi–currency (Dollars, Pounds, Euros) prepaid card which enables users to load up to $10,000 and make foreign currency purchases without incurring exchange rate or other charges.

MasterCard also released a study called the MasterCard African Cities Growth Index that showed that Accra, Lusaka and Luanda offer the highest growth potential in Sub-Saharan Africa. Other ranked cities included Dar es Salaam (4), Addis Ababa (5), Nairobi (6), Kampala (7), Johannesburg  (8), Cape Town (11), Mombasa (12), Lagos (13),  and Khartoum (19).

Credit reference bureaus like CRB Africa and Metropol are expanding across East Africa.

The inaugural Mobile Money Africa Awards will be held in Johannesburg next month, to award the best mobile money app, mobile banking service, and mobile money platform for Africa, among others.  

Nation Hela launched last year has 8,000 active cards in use.

With PesaPal, Kenyans in the Diaspora can send school fees payments directly to 12,000 schools in Kenya using their credit cards (no need for money transfer service). 

Shell Kenya have a visa card promotion to encourage motorists to swipe their cards and pay for fuel The platform is powered by Equity Bank POS at all Shell stations, and station owners are not charged commissions for card sales (Shell pays all commissions).

Tangaza321 is said to be the second largest mover of mobile money behind M-Pesa. The Tangaza system uses biometric data (fingerprints) as many customers don’t possess national ID cards and allows them to send money across all networks, even to people who don’t have mobile phones.
A team with the University of Nairobi’s University Students Community Organization (Uniscoo)  has developed a prepaid card for university students. Uniscoo which has 25,000 students seeks to encourage good money management among students through the use of the prepaid card powered by MasterCard.

Blogging in 2012

Top blog posts in 2012
5. Nation Hela to revolutionize revolutionize debit cards & diaspora remittances.
4. A review of the autobiography of Duncan Ndegwa, first governor of independent Kenya’s Central Bank.  
3. Discover who created Safaricom’s M-pesa.
2. A re-cap of Kenya’s top banks in (year) 2011. 
1. The most read blog post (by a large margin) in 2012 was on Safaricom & CBA’s launch of M-Shwari. 
Special thanks to @AngieNicoleOD for helping the blog move to a local domain address this year (after a long period of procrastination)