The Business of Transferring Money
It appears that ever since Safaricom introduced M-pesa, many companies have been trying to get on board with their electronic transfer money business ideas.
BD Africa has one such story on PostaPay, the online money transfer business offered by the Postal Service. From reading the story (which is always a chore for me because they are not well written), I gathered that the postal service then sub-contracted the work to a company called Afripayments (probably because the postal service didn’t have the software).
However, based on the tender, it appears that Afripayments was supposed to give up their software technology to the postal service (?). Huh? This is what the article in BD Africa states:
“The board has written to the attorney general Amos Wako seeking direction on how to regularise the contract with Afripayments, which provided the portal but continued owning it against the terms of the tender“.
Why would Afripayments develop a piece of software and then just hand it over to the postal service? I would think that the software was a trademarked, propiertary tool, which Afripayments would then sell to different companies in order to make money off their development, no?
Every time I read about one of these money transfer businesses, I wonder why companies in Kenya haven’t considered using sites like paypal? Paypal has been around for ages and they’ve had time to work on their systems. So, why not use them? When it comes to using on-line businesses, you don’t have to confine your services to local companies.
**I clicked on the Afripayments link and the send money now tab is out of service. What’s up with that?
**Another electronic service mentioned is Kenswitch. Has anyone used that?
- PostaPay is bust but worked well for transfers from the US to Kenya. The contracts & licensing with Posta is another story.
- Paypal have no interest in Africa! – you can’t even register to use Paypal from here (maybe only South Africa)
- Kenswitch is not a money transfer system; it’s a platform that allows customers of a dozen smaller banks in kenya to use each other’s ATM’s for cash withdrawls across the country
- PostaPay is bust but worked well for transfers from the US to Kenya. The contracts & licensing with Posta is another story.
- Paypal have no interest in Africa! – you can’t even register to use Paypal from here (maybe only South Africa)
- Kenswitch is not a money transfer system; it’s a platform that allows customers of a dozen smaller banks in kenya to use each other’s ATM’s for cash withdrawls across the country
OH! You’re my new favorite blogger fyi
@Kenyanentrepreneur…this posta pay reeks of graft in my honest opinion
@bankelele…whats your advice on the best money transfer for poor souls here in africa since posta pay looks like a gone case and paypal doesnt believe people in africa have money or are intelliegent enough to use their service?
Actually Postapay came before M-PESA
Secondly, paypal wouldnt work in Kenya they way postapay works because postapay is a money transfer service whereby you send money through a postapay agent or postoffice and recieve it on the other end in your local postoffice or postapay agent. The clientele is usually the rural fork who dont have access the conmputers.
@bankelele.
You can register into paypal and use it from here.bankelele wrote:
You can register and use paypal from here. The only limitation is you can only send money and not receive it.
I don’t think the problem has to do with lack of interest but rather the current legislation and willingness of local banks to receive funds from paypal on your behalf.
Just a quick comment on a change I’ve made:
**To quote someone else’s paragaph, all you need to do now is hover over it and you will see the paragraph highlighted in yellow. If you click it once, it will move the paragraph you want to quote right into the reply box.
Better, the other quotes where damn ugly
Just a suggestion, can you put ajax comments so that the whole page does not have to keep refreshing every time someone makes a comment
The reason why we dont have a online payment company coming up is because Kenyans dont have permanent address systems that can be relied upon for verification. Once this happens then we can begin to make good money in this country.
Lack of planning is costly.
TUMA PESA is a financial service offered by Babawatoto.com TUMA-PESA (e-money) is an innovative mobile payment solution that enables customers to complete transactions including person to person PESA transfer. It is aimed at millions of Kenyan mobile phone customers. Send TUMA-PESA to anyone who has a Mobile phone on any Kenyan phone network. TUMA PESA can be collected immediately at any of the hundreds of shops and Agents that include banks, petrol station chains, supermarkets, cybercafés, and many more independent retailers country wide in Kenya.
How it works via Babawatoto Online
* Send Money by making a TUMA PESA purchase of any denomination you want at babawatoto.com. We have TUMA PESA in denominations of Ksh 500/=, Ksh 1000/=,Ksh 1500/=, Ksh 2000/=, Ksh 2500/=,Ksh 3000/=,Ksh 5000/=,Ksh 6000/= Ksh 10,000/ and Ksh 15,000/=.
* You will then need to provide the recipient’s details including the names of the Recipient in Kenya.
* Complete transaction by making payment via Debit or credit card in our secure payment center PAYPAL.
* The recipient will then be contacted by phone by a Babawatoto staff member to collect their money at the nearest MPESA outlet.
* After that, we will process the transfer and once the order is complete, We will send you a follow up Email from BABAWATOTO informing you that we have completed sending money to the Recipient.
MOST FREQUENT QUESTION:
Why should I send money through Babawatoto.com yet I have been using other Multinational Money transfer service providers?
Babawatoto.com competes favourably with the leading Money transfer service providers. A comparative analysis shows that Babawatoto allows you to send small amounts of money at cheaper rates. Hardly anyone goes to western union to send Ksh1000/= Ksh2000/= or Ksh 3000/=.However with Babawatoto you can easily send those amounts for Adhoc needs back in Kenya. (This Service is very popular with customers who just want to support specific needs without having to send more money than they need to).
Babawatoto:
It looks like you are still spamming Kenyan blogs, but anyway, where would the recipients pick up the money in Kenya?
Does the money go into their bank accounts or do they have to go somewhere else?
I’m not quite sure what you mean? Are you saying that while you are reading the comments and someone may be responding, the page is also refreshing at the same time?
LOL! I like your honesty.
KE
Your Filter is catching my post as spam When I put a Link on Main body.:grin: To Answer your Question, The recipient will be contacted by phone by a Babawatoto staff member to collect their MPESA at the nearest MPESA outlet. once the order is complete, We will send you a follow up Email from BABAWATOTO informing you that we have completed sending The MPESA to the recipient.
1.5 years since we started off.We now have a customer base exceeding 2000 kenyans abroad and growing tremendously on a month to month basis.
Asante
I just checked out your website. It’s really improved. Others should go and check it out here: https://babawatoto.com/index.php
I then clicked on the TUMAPesa link, which was very easy to use, but it doesn’t seem to show the price you charge for this service. Is it there and I missed it?
Looks like Mamamikes has some real competition on it’s hands.
Questions:
1) How have you gotten the bulk of your customers?
2)Why did you decide to get into this business? and are you planning on expanding it beyond just Kenyan clientele?
3) With high speed internet service coming to Kenya, how do you think this will help your business?
Thanks
We price Mpesa Based on the amount you are sending .This ranges from a fee of $3.45 to A maximum of $11.90 .The cost of the Service is already included in the price quoted.
Questions:
1) How have you gotten the bulk of your customers?
-Babawatoto is probably the only Kenyan company whose business Model is 100% built around FACEBOOK.85-95% of our clients are Direct contacts made in facebook through Our Groups and profile.As a result Babawatoto has a $0.00(zero) Cost of Advertising.(not considering time spent on FB)
2)Why did you decide to get into this business? and are you planning on expanding it beyond just Kenyan clientele?
-well we had this idea in mind for about 1 year back in 2006 but I could not do much since I was not able set up the infrastructure in Kenya .So on December 2007 I finally got to set up in kenya. The degree of urgency was enhanced when I was stuck Upcountry in the early days of the PEV chaos and I relied solely on supplies from one of my friends in the US. That unfortunate situation made us realize the Importance of such e-portals So as a result,Me and My partners decided to roll out with more determination
We already deliver Nakumatt Vouchers to as far as KIGALI RWANDA and will soon be able to Deliver Nakumatt Shopping vouchers to Nakumatt oasis- KAMPALA.
3) With high speed internet service coming to Kenya, how do you think this will help your business?
Already Kenya’s ICT sector has seen massive movements and strategic alliances being formed. For instance Safaricom mid last year purchased One communications in a move seen to ensure it establishes a foothold in the lucrative data market
It will help our business in the sense that we hope GOK in conjunction with Kenya’s ICT sector will set up systems that can allow better verification of addresses and allow payment processors like PayPal into the market so that Kenyans can make online purchases without Paypal tracking those transactions as potential fraud.We have canceled many orders originating from Kenya because paypal could not verify the authenticity of the Kenyan address provided.
Thanks
Babawatoto said:
As a potential customer, I’d like to know what you charge and I’d like to see it on screen. I don’t want to have to spend time calculating your charges. Make it easy for me by showing me what you charge. If the service is good, I’ll be willing to pay the $12 dollar fee, which is really not a lot for kenyans earning dollars.
It’s fascinating to me that you have built up your clientele almost exclusively through facebook. Very interesting. Have you ever considered putting up a blog on your site with a plugin to your facebook page and with information on your company? A lot of companies seem to be using the blog format to stay in touch with their customers.
Let me ask you another question:
How did you get vendors like Nakumatt to sign up with your service? What did that process involve?
Also, do you have employee’s who actually drive around delivering these goods or is it all done electronically?
I’ll await your answers and thank you very much for answering these questions about your company.
Like I’ve said numerous times, when your money is clean and when you’ve put in the hard work, you will want to talk about it because you are proud of your success and you should be.
It’ll be interesting to see how companies like yours takeoff after that fiber optic cable lands. In 10 years, people will not be able to catch up with you and that’s why you have to start these companies now.
Thats a nice suggestion We will look into that.In the past majority of our clients have in the past done the arithmetic and concluded that we are cheaper.Babawatoto competes favourably with the leading providers. A comparative analysis shows that Babawatoto allows you to send small amounts of MPESA at cheaper rates. Hardly anyone goes to service providers to send Ksh1000/= Ksh2000/= or Ksh 3000/=.However with Babawatoto you can easily send those amounts for Adhoc needs back in Kenya. (This Service is very popular with customers who just want to support specific needs without having to send more than they need to).
It simply involves Re-seller agreements With all of our suppliers You provide proof of business authenticity and the grant you permission to sell their products.Its not a complex process.
Our Nairobi office is staffed with Staff who process all the orders. Most orders are processed electronically.(Airtime and TUMA PESA).Our other other products e.g Fuel vouchers/Flowers or cakes or Nakumatt/Uchumi/Tuskys vouchers are delivered to the recipient’s door steps by our staff or by courier services like Securiror-G4S (depending on the location.) If the recipient lives in Upcountry locations we work with the client on the best delivery method to use. however for Kisii/Eldoret/Nakuru/Mombasa ,We have an elaborate process on how orders to those locations are handled
Thanks
Babawatoto.
There are only 2 other Kenyan owned money transfer companies based in the US. I am talking of Licensed companies not companies using Safaricom Cards or PayPal to send money. These companies are: http://www.kenwanglobal.com and http://www.poapay.com
http://www.poapay.com credits money to your bank account, Mpesa and Pick (i believe Nairobi, Nakuru etc)
http://www.kenwanglobal.com uses equitybank.
Be careful when using companies doing money transfer in the name of ecommerce with a shopping cart module. They are shut-down by the government or merchant providers (such as paypal) as soon as they are discovered.
manP
Man P,
You are right. The two Kenyan websites you mentioned are the only services, I know that offer money transfer services legally over the internet.
I sincerely respect Babawatoto, they give us something to think about. However, I am certain their TUMA pesa service is illegal. Once merchant services catch up with them, they will be forced to shut down.
Money transfer business is a lucrative opportunity, however it is full of complicated regulation. Both on the US side and in Kenya.
For example to use the Mpesa logo on our website, we had to expressly get permission from Mpesa. (Mpesa barred us from using their service for international money transfers. Perhaps ZAP from Zain will be open to this idea)
On another tangent, I think we are headed into exciting opportunities for local payment gateways (i.e making payments within Kenya over the internet) – this is going to be the next battle ground for payments solutions. In addition to Mpesa and Zap – there are many people already working on solutions to enhance local e-commerce. Exciting opportunities are here!
It looks like you are still spamming Kenyan blogs, but anyway, where would the recipients pick up the money in Kenya?
Does the money go into their bank accounts or do they have to go somewhere else?
I think if the website mentioned above does not have a money transfer license they are going to be in a bit of a problem if state.gov discovers they are Mpesaring from the USA.
I think legitimate money transfer is hard to do outside the establishment(read Western Union) firms.Just ask KenwanGlobal how hard it is.
For Kenyans the alternative has been to send flowers and gifts through online gifting firms.
The original which many people know http://www.mamamikes.com ,started by a US based student,nandihills.co.ke,sambazasoko and our friendly spammer mentioned above.
Thanks Mamamikes (The industry’s Leader and pace setters in so many ways!)and ongewn isaac( AKA blackseed ) for that info.We have gone through the logistics with of TUMA PESA both with the regulators in US and Kenya and it works fine since its a VOUCHER based service.Its the same thing as buying the nakumatt shopping voucher.In babawatoto you are buying A TUMA PESA VOUCHER that is redeemable in Jamhuri.
Simply put its a product like the rest of our products.
we are grateful to our customers abroad. Babawatoto has a tremendous growth on month to month basis ,thanks to our cheaper and more efficient services.
To Mamamikes & Ongwen:
What is the process of ensuring that your money transfer business is legal in America? I’m not worried about Kenya so much because anything goes in that place.
Why do you think so, especially if many kenyans still don’t use credit cards and still don’t have access to regular internet services? As someone else metioned a while back, isn’t the mobile phone going to become Africa’s “internet”? So what opportunities do you see with that dimension? i.e. mobile phone business solutions.
Babawatoto:
I highly doubt that you went through the procedures and expense of ensuring that your site could transfer money from U.S. based residents. Actually, I don’t think any of these Kenyan based sites have done it, but it’s ok, I won’t tell.
And I can’t help but ask (again) why Kenyans are such copy cats (no offense intended) – but look how many copy cats came after mamamikes: babawatoto, nandihills, sambaza, mzabizi this, that…
Maybe future Kenyan entrepreneurs should consider selling to Europeans or Americans or anyone else other than a Kenya. I mean, we can’t all sell Uchumi vouchers to each other
If your company is using Paypal e-commerce solutions for business That’s a perfectly legal practice, as PayPal is classified as a deposit broker and completes verification.Advances in technology are making E-commerce services more competitive as money transfer services has become a commodity business.If WU and crew dont change.. they will be obsolete like the telegram in a few years!
Its not copycat if you ask me.Its like saying that since wall-mart exists all other store should cease existing. The demand for e-commerce services to Kenya is there amongst Kenyans abroad and The market is too big for any one E-shop to handle.
What will separate the BOYS from the MEN is the VALUE ADD your company brings.If you provide superior customer service and competitive pricing to you clients ,then they will remain with you for as long as possible.
So to answer your question ,competition is healthy !we encourage competition. because it makes everyone more competitive and at the end of the day the consumer gets the best deals.
Yes, competition is always good, but will you guys out-compete yourselves since you all seem to be selling the same things to the same group of people?
Anyway, I want you to read this article on a Vietnamese immigrant in America who created this very popular hot sauce. He says that he wanted to create a sauce that would appeal to all palettes and not just Asian palettes and he has succeeded in doing that.
As I was reading this article, I thought about all these kenyan e-commerce companies like yours and mamamikes who seem to be focusing on one demographic group (even though you said you are expanding into Rwanda and Tanzania).
It’s an interesting article to read for Kenyan entrepreneurs who don’t want to limit their market to just Kenyans. This is how Asians are succeeding, i.e. by making products that appeal to everyone.
Link to article below:
http://www.nytimes.com/2009/05.....=1&em
I think ideas like babawatoto are a boost to the kenyan economy.
@KE
.
It is very importnat that Kenyans especially the ones in the diaspora embrace e-commerce. I am a huge supporter of MamaMikes Online and have known them for long.The whole idea behind MamaMikes is meeting the direct need of family and friends. Most of the time you find that even though you send money back home for school fees, it ends up being used for other things. Thats why initiatives like MamaMikes help us meet the needs of our family and friends back home. With just a simple process I am assured that my brother will not be sent home for school fees
I have used MamaMikes before and never once have they dissapointed me. Kudos to MamaMikes.