Is Telkom Kenya set to phase out Orange Money, replace it with Orange Bank?

Of all the mobile money transfer platforms developed by the country’s telcos, it’s only Orange Money that is yet to attain a userbase of 1 million subscribers, almost 10 years since it was launched by Telkom Kenya in partnership with Equity Bank, under the tagline ‘Iko Pesa‘ (Swahili for ‘there’s money’).

Even the market’s latest entrant, Equitel (developed by Equity Bank’s subsidiary Finserve) has already attracted over 1.2 million users while Orange Money still lags behind with just 194,322 subscribers according to the latest industry stats from the industry regulator Communications Commission of Kenya (CA) covering the period between October to December 2016.

(TOP: Screen from the Orange Bank demo introductory video).

Let’s not even try to compare Orange Money users to M-Pesa or Airtel Money subscribers because that gap is very big.

Then recently, during the initial offer of the of the government’s infrastructure bond called M-Akiba, Orange Money was not listed as one of the platforms through which the public could purchase the bonds via their mobile phones, effectively shutting out the telco’s clients with single SIM cards from participating in the offer.

Even the M-Akiba website makes it clear that Orange Money, and by extension Telkom Kenya, is not one of its partners, stating thus: “It is a product by the government of Kenya through the Central Bank of Kenya (CBK) under the National Treasury in collaboration with Nairobi Securities Exchange (NSE), Central Depository Settlement Corporation (CDSC), Safaricom, Airtel and Kenya Association of Stock Brokers & Investment Banks (KASIB).”

The Telkom Kenya C-suite seems to be alive to the fact that the Orange Money platform is quite rigid, leading the telco look out for possible alternatives to replace it altogether, with the firm’s CEO Aldo Mareuse stating during a recent interview that the telco would ditch the current platform as “it cannot keep up with the competition”.

“The current platform does not even allow the core products that M-Pesa has and obviously does not allow us to go further, which is what we want,” said Mareuse according to Business Daily.

“This lack of functionality is the reason Orange Money did not participate as a placing agent in M-Akiba, Kenya’s first phone-based government bond issue which was sold via Safaricom’s M-Pesa and Airtel Money… Mr Mareuse said that the new platform would be more cost-efficient and will be launched at the same time the company rebrands before the end of the year,” states the article.

That is why an announcement made today to the effect that Orange has unveiled the ‘Orange Bank’, billed as “a bank conceived by digital experts which focuses on its customers’ uses” is very interesting and makes one curious.

“The user manages his/her bank accounts and services easily and instantaneously from the Orange Bank mobile application: mobile payments, bank transfers by SMS, real-time account balance, the temporary suspension of the debit card from the app, or help from the virtual assistant 24 hours a day, 7 days a week. At Orange Bank, 100% of the transactions and interactions between the customer and the bank can be carried out from the customer’s mobile phone,” states the announcement.

The Orange Bank service will however be first launched as a pilot in France for Orange employees from mid-May before being availed to general public from July 6, 2017. To use the service, customers will have to subscribe directly from the mobile app, online, or from Orange outlets.

Orange Bank will provide users with a bank account, a debit card, overdraft protection and an interest-bearing savings account.

“Right from the outset, the service will integrate a number of cutting-edge, digital and banking innovations including contactless mobile payments, sending money by SMS, instant bank balances, temporary freezing of the debit card and 24/7 access to a bank advisory service. Orange Bank has not simply transferred conventional bank uses to an online application: from the start, they were designed for mobile phones. As a result, 100% of the transactions and interactions between the customer and Orange Bank can be carried out using a mobile phone,” adds the statement.

“When Orange Bank customers make a purchase on a Saturday for example, they no longer have to wait until Tuesday to check their balance: it is updated instantaneously for greater simplicity and transparency, giving them full control of their budget… Paying back a friend is as easy as sending a text message: Orange Bank allows money to be transferred by SMS from its completely secure application.”

Let’s hope that when it’s eventually launched here, the Orange Bank service will compete at par with other mobile money transfer and mobile banking services. And eventually help Telkom Kenya boost it’s money money transfer userbase.