In January 2011, five years after Kenya revolutionised money transfer with the launch of M-Pesa, Mobile Pay Limited, a Kenyan company, launched a new mobile money transfer service Tangaza, making it the first non-telecoms firm to enter the industry. Data issued by the Central Bank of Kenya (CBK) show that Tangaza moved Ksh.1.31 billion in December 2011 making it second only to M-Pesa, which moved Ksh.116.6 billion. How we made it in Africa’s Dinfin Mulupi chatted to Mobile Pay Limited co-founder and managing director Oscar Ikinu.
What is the story behind Tangaza?
After I graduated as an architect I went to Dubai to build cities. There was a lot of work and it seemed obvious that I would never be able to come back to Kenya. I wanted to come back and build our country while at the same time create employment. I decided to come back. I discovered the financial infrastructure needed to drive a big economy was lacking. There was a need to pull together the population to participate in building the economy. The mobile phone whose popularity and penetration was growing fast across the country was the easiest tool. This was in 2004, before the first mobile money transfer service was launched.
Kenya has a number of other mobile money transfer services. What makes Tangaza different?
Tangaza is not just another mobile money transfer service. It will transform the way the economy is run. It will enable manufacturing industries to develop and create job opportunities. We are the only ones that run across all mobile networks. We are also the only service provider who can give money to people who do not have an identity card because Tangaza uses a personal data assistant (PDA) machine to register customers’ details, which includes finger prints. Ours is the most secure money transfer service.
Competition is tough yet you seem to be transferring more money than some mobile operators who have millions of customers on their networks. How come?
We do not have the first mover advantage, but the registrations are quite promising considering that we came in as the fifth service provider. So far we have 140,000 customers and 1,400 registered agents countrywide. The competition for us is about product and we have an advantage on that because of value-added services. We also strive to ensure value for our agents. We are mapping our agents on terms of location to ensure they don’t compete so much amongst themselves. We are rolling out more agents countrywide but not that we are chasing after mobile operators. Once we have agents on the ground we are now going to power systems to give opportunities to Kenyans to access various services, such as loans from commercial banks.
What challenges did you face in the roll out of Tangaza?
We’ve had financial challenges. As a new company we also faced challenges in marketing and positioning our product. We had to communicate to customers to get them to register.
Where do you see Tangaza in five years?
We see ourselves as a driver of the economy. We will be driving most of the savings and credit co-operatives (SACCOs) in the country. We have products specifically targeted at the SACCOs. There are so many SACCOs in Kenya and most do not have information technology solutions. Out of nearly 5,000 SACCOS only about 100 to 150 have ICT solutions. SACCOs are using our system to make payments to their clients, and for clients to make applications. We have brought banks on board too. Most of our agents will be bank agents too. Mobile money transfer is the future of payment and we have a plan on how to improve it so as to add value to our customers.