While it has often been described as a money transfer product, mobile money is a network infrastructure for storing and moving money that facilitates the exchange of cash and electronic value between various factors including clients, businesses, the government, and financial service providers.
The entry of Wave Money Transfer service to the lucrative diaspora remittances worth billions through mobile phones has precipitated cut throat competition in the sector.
Money from the diaspora has become an important foreign exchange earner to Kenya according to data from the World Bank and the Central Bank of Kenya that indicate that Kenya is the second country in the Sub Saharan Africa region in terms of increases in remittance flows from the Diaspora.
So far, Wave is new entrant is the most preferred service according to the survey by this writer in the Americas and Canada.
It is for this reason that Pay Pal which has been in the market for a long time recently introduced a new money transfer services to Kenya christened Xoom money transfer services.
According to information in the social media, Wave is an easy and instant money transfer service through M-PESA, the most popular money transfer services from Kenya's Safaricom Limited.
To use the service, the user sends money just like a text and then the funds arrive instantly to the recipient’s mobile in Ethiopia, Kenya, Uganda or Tanzania.
The same source claims there are no fees to send but leverages on the exchange rate. It also instantly displays the price comparisons to competitors in the app.To ensure safety and security, the source says, Wave encrypts all personal data and offers phone support every day so you always know where your money is.
Other advantages of mobile money transfer services to M-PESA account holders are through an email or phone number, instant money transfer & delivery and the first transaction free.
Older traditional methods included Pay Pal, MoneyGram and western union for which most banks and other financial services provider in Kenya subscribe to.
An opportunity exists, where Kenyan banks will up their technology to tap into this lucrative market by offering direct services from all over the world.
Equity Bank has introduced Equity Diaspora banking and Diaspora Eazzy where Kenyans living in the diaspora can send money directly to their accounts from wherever they are world over.
Almost all popular banks in Kenya namely National Bank of Kenya, Paramount Bank, UBA, ABC Bank, Bank of Africa, CFC Stanbic Bank, Chase Bank, Consolidated Bank of Kenya, Cooperative Bank of Kenya, DTB, Ecobank, Equity Bank, I& M Bank, Jamii Bora Bank, Kenya Commercial bank, Postbank and K-Rep are using either MoneyGram or Western Union or both.
Both services exposes the sender or accountholder to regular bank charges compared to Wave which does not have extra charges apart from exchange rate.
Other money transfer services licensed by the Central Bank of Kenya are Dahabshiil, Tawakal Money Transfer Limited, Skrill International Transfers and Hodan Global Money Remittance and Exchange among others.
The biggest disadvantage of money transfer services based on mobile phone APPs is the interruption of services due to unavailability at times. This is extremely bad for instant transfer based on urgency.
While introducing Xoom Pay Pal gave safe sending precautions to its customers in the services and also measures to prevent scams.
The safe sending practices are sending only to people you know, fulfilling requests only from people you know, safeguarding your password, sending for yourself and not for others and using Xoom for legal purposes only.
To protect the user from scams, Xoom urges its customers to avoid illegitimate requests, relationship scams, fix ones computer scams, avoiding mystery shopper scams and emergency request scams, sweepstakes scams and rental property scams.
Available statistics indicate that the diaspora remitted Ksh.145 billion in 2014, Ksh. 156 billion in 2015, and Ksh. 146 billion by June last year.
As such, more innovations in this sector will continue to push the competition up as more entrants eye the sector.