Earlier this week Zain, Kenya’s second largest mobile network operator, finally launched its Zap mobile money transfer services after protracted delays in securing operating rights from the Central Bank of Kenya.

Zap, which has been launched as the second mobile money transfer service in Kenya after Safaricom’s wildly successful M-Pesa service is expected to enable Zain to grow its market share and customer loyalty in the face of increasing competition in the marketplace. Safaricom currently has over 5 million registered M-Pesa users and is signing up new users at an enormous rate.

Zap for the time being has an edge on M-Pesa in that it is more than a mobile money transfer service. Zap goes a step further by enabling users to access funds from their bank accounts and even pay their utility bills. This feature is being offered on Zap for customers with Standard Chartered Bank and Co-operative Bank of Kenya accounts at the moment with more banks expected to sign up.

Another interesting aspect of Zap is that charges are only Kes. 10.00 for ALL money transfers up to a limit of Kes. 35,000.00 whereas Safaricom transaction fees range from Kes. 30.00 to Kes. 400.00 depending on the amount of money being transferred. Finally, Zain expects to expand the use of Zap to the payment of goods and services that is currently used to only a very limited extent via Safaricom’s M-Pesa.

Going forward, it is expected that Orange Kenya and YU will also launch their own mobile money transfer services within the next few months. What remains to be seen in both cases is what sort of entry and pricing strategies they will adopt. It seems obvious that each mobile network will look to build strategic alliances with as many service providers as possible in the banking sector as well as other traditional money transfer services like Moneygram, Postapay and Western Union who dominate the multi-billion shilling international money remittances business.