What does Equity’s deal with Bharti’s Airtel Money mean for Orange Money and Safaricom’s M-Kesho?

 

Equity Bank Group CEO Dr James Mwangi (left) shakes hands in agreement with CEO Airtel Africa- Anglophone Mr. Jayant Khosla after the signing of the Equity Bank and Airtel Money partnership.
Equity Bank Group CEO Dr James Mwangi (left) shakes hands in agreement with CEO Airtel Africa- Anglophone Mr. Jayant Khosla after the signing of the Equity Bank and Airtel Money partnership.

Equity Bank and Airtel Kenya has today entered into a partnership to offer comprehensive mobile commerce solutions to Airtel’s customers in Kenya, through Airtel Money.

The service, available to all Equity Bank customers with Airtel lines, will enable customers from both Airtel and Equity Bank to access Airtel mobile banking platforms, perform agency cash transactions at Equity Bank branches and also enable Airtel services customers to withdraw money at any Equity Bank countrywide. Airtel Money will also enable customers to pay their utility bills, receive bank transaction alerts, check account balance and receive mini statements, among other services.

“We shall continue to strengthen our business model through innovation, enhanced use of technology, automation for a better customer experience and collaborations with industry stakeholders such as Airtel,” said Equity Bank CEO James Mwangi.

With the deal, the 203 Equity branches and 600 Equity Bank ATMs, will complement Airtel Kenya’s 10,000 Airtel Money agents in Kenya.

But after all is said and done and the fanfare is gone, it’s important to ponder over some crucial questions regarding the current Equity, Airtel Money deal and what it portends for the bank’s earlier partnerships with Safaricom for the launch of M-Kesho and France Telecom’s local subsidiary Orange for the launch of Orange Money.

M-Kesho was launched together by Safaricom and Equity and had – or offered – more or less the same features and services provided via the M-Shwari which was launched by Safaricom and CBA last year.

Why Safaricom decided to opt out of the partnership with Equity (which gave birth to M-Kesho) and later enter into a deal with CBA to develop and unveil M-Shwari is an issue under a lot of speculation.  The only reason people tend to offer for the deal with CBA is that the bank holds all M-Pesa cash.

Since the launch of Orange Money – a mobile money service that allows customers to transact directly from a bank account using their Orange mobile phone – the two partners (that is Orange and Equity Bank) have not organized any meaningful joint marketing initiatives to create awareness around the product and thus spur its uptake.

There may arise speculation to the effect that Equity later developed cold feet on M-Kesho because it did not want its platform to be locked down to any mobile network service provider – as later Orange and now Airtel Kenya – have come knocking with similar partnerships.

On the other hand, it can also be speculated that after realizing that Equity was not keen on pushing M-Kesho, Safaricom then decided to explore other banks for possible partnerships, eventually landing on CBA’s doorsteps to lead to the launch of M-Shwari.

But the question that still begs for more speculation as there are no clear answers is: Why has (did) Equity not aggressively push for the uptake of Orange Money by its account holders despite the fact that all Equity Agent outlets have the “Orange Money” sign, meaning that the services are offered within, and in spite of the fact that the Orange Money solution runs on Equity’s platform?

Or put differently, was Safaricom’s M-Kesho or FT’s Orange Money deals not lucrative or attractive enough for Equity Bank?