Zain Partners with Western Union to Deliver Mobile Money Transfer Via Zain’s Zap

25 Jun, 2009

In August 2008, Juniper Research forecasted that Service Provider revenues, derived from mobile money transfer services and remittances, will exceed $5bn globally by 2013. While the research firm Informa, predicts that by the same year, more than 424 million mobile users will be sending money to other mobile users in the same country via their mobile phone, and 73 million will be sending money internationally via their mobile phones. Africa and Middle East are predicted to be one of the top regions of the global international mobile money transfer gross transaction value.

Traditional money transfer and credit card companies are trying to be part of the mobile payment loop in order not to lose their business, while mobile operators and software vendors across the world are deploying different schemes to capitalize into this opportunity. Putting ideas into action, Kuwait based Zain, which is considered the fourth largest mobile network in the world in terms of geographic presence, with a footprint in 22 countries spread across the Middle East and Africa with over 60 million active customers, and Western Union, a global leader in money transfer, recently announced that they will work together to deliver mobile money transfer services in countries in Africa and the Middle East through Zain’s new Zap platform.

The Zap service provides Zain customers access to a wide range of transactional services from their mobile phones. Customers can interact with select bank accounts, top-up or transfer airtime, and move money to businesses, friends and family. The service allows customers to pay bills such as electricity, and can even be used to settle grocery bills in the supermarket. Zap has been operational in Kenya, Tanzania and Uganda for several months, making mobile banking services available to more than 100 million people in East Africa. Zain has also announced plans to introduce Zap in 22 markets. (ArabCrunch will do a follow-up story about when Zain will launch Zap in Middle East, by next week, inshallah.)

As Zain’s Zap is only available for Zain Mobile subscribers, this agreement with Western Union will enable Zain’s Zap to reach far beyond its members; Because Western Union has a global agent network of more than 334,000 locations in 200 countries and territories.

When the service is launched, consumers will be able to send cash money transfers from participating Western Union locations around the globe in the same way they do today. Zap customers who are enrolled in the service in select countries will be able to choose whether they want to receive their money in cash at a Western Union Agent location or in accounts tied to their mobile phones (their “mobile wallets.”)

Money-transfer receivers who receive funds in their mobile wallets will be able to pay bills, buy airtime or cash out through the Zap service at more than 12,000 Zap agent locations in East Africa.

The service will be introduced in select countries when regulatory approval has been secured. The service with Zain will be operational in countries with significant international and intra-Africa remittance activity.

Dr Saad Al Barrak, Zain Group CEO, said in a press release,

“This service will enable the millions of people who are abroad to send money home swiftly to their friends and families not only in the cities but also directly to the villages across these countries.”

Western Union has established cross-border Mobile Money Transfer pilots in a variety of corridors around the globe. The Western Union service currently allows mobile subscribers in the Philippines to receive funds sent from select Western Union Agent locations directly into their mobile wallets. In the future, Western Union will also offer consumers the option to send funds directly from their mobile phones for pickup at Western Union Agent locations globally or directly to another mobile subscriber. Western Union is extending its global distribution network through alliances with mobile network operators.

Zain brand is wholly owned by Mobile Telecommunications Company KSC, which is listed on the Kuwait Stock Exchange (Stock ticker: ZAIN). Zain is listed in the Financial Times’ Global 500 Index which ranks the world’s largest companies based on market capitalization.

In 2008 , Zain Group recorded all time high consolidated revenues of US$ 7.44 billion, an increase of 26% compared to 2007 and net profits of US$ 1.2 billion, an increase of 6% on 2007. Year on year customer growth across the two continents in which Zain operates was 50% with the Zain Group serving 63.54 million managed active customers at 31 December, 2008.

Zain operates in the following countries: Bahrain, Burkina Faso, Chad, the Republic of the Congo, the Democratic Republic of the Congo, Gabon, Ghana, Iraq, Jordan, Kenya, Kuwait, Malawi, Madagascar, Niger, Nigeria, Palestine (currently operating as Paltel Group), Saudi Arabia, Sierra Leone, Sudan, Tanzania, Uganda and Zambia. In Lebanon, the company manages ‘mtc-touch’ on behalf of the government. In Morocco, Zain owns 31% of Wana Telecom through a joint venture.

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