Mobile phones lower the cost of business<http://feedproxy.google.com/%7Er/Bankelele/%7E3/N7ORRYltn1U/mobile-phones-lower-cost-of-business.html> Posted: 12 Jun 2009 08:45 AM PDT *Money Transfer Within Kenya Part 3* A comment from @alykhansatchu on Money transfer lead to an update of the first post about money transfer<http://bankelele.blogspot.com/2005/09/money-transfer-within-kenya.html>from about 3 ½ years ago before the advent of mobile money transfers. At that time, the cost of sending 10,000 shillings (then about $136) within Kenya was Kshs. 1,700 ($23) with Western Union and 1,850 ($25) with Moneygram - working out to a remittance cost of about 17% - 19% for an instant money transfer. This was mostly done at a few commercial bank branches, some foreign exchange bureaus, and at post offices around the country within banking hours. *90% savings:* A lot has happened in the last few years mainly in the form of the arrival of money transfers via mobile phones by MPesa<http://www.safaricom.co.ke/index.php?id=745>from Safaricom and more recently Zap <http://www.ke.zain.com/en/zap/index.html> from Zain. A recent post last week noted that Western Union in Kenya have just lowered transfer costs <http://moseskemibaro.com/?p=412> to flat rates of 2% i.e. almost 88% cheaper than what they were at the time. In the last few years, millions of Kenyans have moved on to mobile phones for money transfer and I can’t recall anyone who uses banks for these transactions. Mobile phone have maximums of about $430 (35,000 shillings) for money transfers, but this is more than enough to cater for most remittances, including the emergencies that necessitate instant transfers. And mobiles are still cheaper; the 2% western union charge to transfer 10,000 shillings works out to about 200 shillings. A transfer of the same amount by Zap costs 75 shillings (0.75%) and 105 shillings (1.05%) by M-Pesa (after combining sender and receiver fees) *International remittance to get cheaper?:* Zain hope to link Zap to allow transfers to customers of Zain in different African countries. And Safaricom are setting up a link for transfers from the United Kingdom to Kenya. When these are established, we should also see the cost of internal remittances, whose sometime high cost is a cause for complaint for many Africans in the Diaspora, also drop significantly. -- Solomon Mburu P.O. Box 19343 - 00202 Nairobi Cell: (+254-0) 735 431041 Man is a gregarious animal and enjoys agreement as cows will graze all the same way to the side of a hill! AND It is better to die in dignity than in the ignomity of ambiguous generosity! Sent from Nairobi, Kenya