New mobile money system announced in Kenya

Jun 15, 2011

A new system to be introduced in Kenya will allow money transfers between the networks of competing mobile phone companies.

Regulated by the country's Central Bank, it will make the payment service more readily available to citizens
and reduce the cost of sending cash, Business Daily reports.

The announcement was made by a task force established by the Prime Minister's office, although it will be the responsibility of the telecoms enterprises to introduce the changes.

Mwaura Nduati, Head of the National Payment System at the Central Bank of Kenya, said usage of the money transfer system could be increased further by the launch of a central clearing house.

"What we are asking of the mobile phone operators is similar to the banks' settlement payment system," he added.

This comes after a study conducted by the Massachusetts Institute of Technology and Georgetown University, based on Kenya's M-Pesa payment system, which recommended that measures should be brought in to allow mobile banks to issue net e-money.