Social networking site ready to transfer cash, set pace for online transactions

TransferWise: Sending and receiving money should be as cheap as sending an emial.

 

This comes after the social network company hatched a partnership deal with the financial technology startup TransferWise and Facebook Messenger, a chat tool for Facebook to have cash transferred between two or more people while chatting.

"Our mission is to bring faster, cheaper, and more convenient international money transfers to everyone in the world and building the TransferWise bot for Messenger is a great step in that direction," said Scott Miller, Head of Global Partnerships at TransferWise.

Launched in 2011, TransferWise has over a million networked users transacting over Sh99 billion a month. Firm developers stated that commercial banks’ hidden levies costs users to send and receive money internationally, pushing up overall costs.

Taavet Hinrikus, among the first the first employees of TransferWise and a founding employee of Skype, said that “sending and receiving money should be as cheap as sending an email.”

Kenyan market

The money transfer disruption hit the Kenyan market 10 years ago, hinged on mobile user being able to transfer money in real time across Safaricom’s M-Pesa.

Over the past few years, however, financial technology start-ups have experimented with various models that can be used to replace the agent at the middle.

Safaricom Chief Executive Officer Bob Collymore, however, has a believe that so much disruption is expected in the technologically changing world, thanks to the innovations.

"We know that disruption is coming and payments technologies evolve like in the case of M-Pesa which started off as a means of making micro-loan payments," he told a local daily.

He added: "Cash still accounts for more than 90 per cent of transactions in the economy, which indicates opportunity for someone to come in with a service that can work along or disrupt M-Pesa.”

Usage

In order to send money through Facebook, a user is required to have a chat bot application, commonly Facebook Messenger application and facilitates the transaction. TransferWise, however, works by having bank accounts in markets it operates.

The new transfer service through Facebook Messenger is only available to customers of TransferWise but is set for launch in 50 other countries globally including in Africa, in the coming months and is targeting a pool of 1.6 billion Facebook users.

Competitions

The launch of Facebook money transfer is set to put on toes global money transfer

Kenya has a total of 31,985,048 Internet users as at June last 2016 with a 68.4 per cent penetration.  Already 5.5 million of these, are signed up to Facebook, and can be reached by the service, which now has a penetration of 11.8 per cent as at June 2016.

Recently, Kenya bankers association (KBA) launched a system to enhance money transfer from bank to bank, setting yet a new competition to the dominant Safaricom M-Pesa. Already 12 banks have been given a green light to accommodate such transactions.

The service can transfer between Sh10 and Sh1 million, the umbrella body KBA said during the launch.

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