Product review: Barclays’ CashSend, Hello Money

Mobile banking has undeniably provided an opportunity for both bank and non-bank players to make in-roads into the unbanked market in Zimbabwe.

Financial Sector Spotlight with Omen Muza

The single biggest weapon in the mobile money transfer services (MMT) arsenal — EcoCash — is, however, effectively in the hands of a non-bank player and it has made significant inroads into traditional banking territory.

While banks are expected to wage a sustained battle for a piece of the unbanked pie, it would be unwise for them to concentrate only — or mainly — on that without also coming up with strategies for protecting their existing customers from the onslaught of game-changing MMT products such as EcoCash. In their quest to craft appropriate strategic responses, banks have responded in basically two ways.

Some have adopted the simple unipolar strategy of signing up for EcoCash while others have opted for the bipolar approach of deploying proprietary mobile banking products that compete directly with EcoCash for new business, alongside products aimed at protecting their existing customer base.

In this instalment, I look at how Barclays is using a double-pronged approach which has additive and transformational elements to position itself in the increasingly competitive mobile payments space.

Cashsend
Barclays Bank is currently promoting Cashsend, a money transfer solution which enables those possessing Barclays debit cards to send money to anyone in Zimbabwe.

The money sent can be redeemed at any of Barclays’s 45 ATMs through the cardless method pioneered in Zimbabwe by Kingdom Bank. The fact that the remittances can be redeemed at only 45 ATMs countrywide is obviously a limitation, considering that transfer is meant to be to anyone in Zimbabwe.

I consider Cashsend as primarily an “in-house” payment solution that meets the money transfer needs of existing Barclays customers, thereby preventing them from seeking alternative external payment products. Being available only to Barclays’ customers on the sender’s side, Cashsend is an additive product because it is an additional channel available only to existing customers.

Hello Money

According to Barclays, Hello Money offers customers the convenience of transacting from anywhere at any time from their mobile phones. The facility offers options to transfer funds from a registered account to any Barclays account or to an account at another banking institution within Zimbabwe.

In order to enjoy the benefits of this product you don’t necessarily have to be a Barclays account holder, but a registered user, making Hello Money a transformative product that seeks to grow Barclays’ share of mobile money services.

This is why Barclays sought access to a bigger market provided by the Econet and Telecel networks through which Hello Money is currently available.

Having opted not to integrate with EcoCash as others such as Agribank, CBZ Bank, NMB Bank, Stanbic Bank, Allied Bank and ZB Bank have done, through Hello Money Barclays joins the likes of CABS (textacash), FBC Bank (Mobile Moola) and Kingdom Bank (Cellcard) that possess branded proprietary mobile banking products. From a revenue perspective, I think how it works better for Barclays and others in the latter group is that when, for instance, a customer transfers money from a Barclays account into the Hello Money mobile wallet, Barclays still benefits from subsequent transactional activity through the mobile wallet.

Presumably however, Barclays has to pass on an agreed portion of this transactional revenue to Econet and Telecel for providing their USSD gateways which facilitate both transactions and access to a wider customer base.

As for the banks that integrated with EcoCash without proprietary mobile banking products, once the client transfers money from the bank’s books into the EcoCash Wallet, the bank no longer benefits from subsequent transactional income, which now accrues to EcoCash.

Since Hello Money is comparable to EcoCash and in fact appears to be meant to compete with it, it is tempting to compare some of their current features.

7 Comments

  1. Tsombori Mbiri

    “The single biggest weapon in the mobile money transfer services (MMT) arsenal — EcoCash — is, however, effectively in the hands of a non-bank player”

    No, no no Owen, Econet now owns 100% of Steward Bank (formely TN)

    1. I agree with you Tsombori Mbiri that there is a strong link between Steward Bank and EcoCash and therefore there will be synergies . But the fact remains that Steward Bank does not own EcoCash, which is 100% owned by Econet, which in turn is expected to drive EcoCash’s strategy.

      1. Tsombori Mbiri

        Noted and agreed… Owen

        As you mentioned another competitive angle these banks should be looking at, is proprietary Mobile Apps for Mobile Banking and Money transfer using their own platforms and the already existing ZimSwitch,EcoCash and other upcoming mobile platforms in the same breadth. What we the banking public want is the convenience of moving our money around and making purchases no matter where we are or what day of the week it is

        1. As far as Mobile Apps go, I believe Barclays Bank have one which is available in the Apple iTunes Shop and Play Store and can be downloaded for free onto a Smart phone or tablet gadgets which use Adroid and Apple applications. As you say, what we need are more banks coming to the party in order to increase customer convenience. I think we are on our way.

  2. I really do not see how these mobile cash projects are helping the unbanked. The unbanked need loans , health insurance and other banking products. In my home town of Kadoma , there is a micro finance company called WISROD INVESTMENTS, they have helped the unbanked to buy household goods, blankets , pots. fridges and stoves, thats what i think the unbanked need instead.

  3. vukani madoda

    I am compelled to challenge Owen Musa apparent bias towards the mainstream banks,in this case Barclays.Your article casts the innovative products not as competitive and demand driven products but rather as some product,not emanating from the banking business which threaten the mainstream banks and in a subtely pergorative way.The big banks need to feel that threat.I do not have too many compliments for them given their record of customer care both locally and internationally compared to other major players.You would be forgiven for concluding that that they see large queues at banking halls a sign of business rather than poor management.You do need choice and products must be developed to suite the customer and not expect the customer to fit the products.I am familiar with Zimbabwean Banks and was a Barclays Bank customer or over 20 years.I have been living abroad for the past 12 years and bank with a competitor bank in that country namely HSBC-the former is no comaprison to the latter in customer care and good service-there are virtually no queues at HSBC but it is the very opposite at Barclays.I would be very surprised if this is a bank capable of coming up with innovations such as Ecocash pioneered.There is nothing wrong with any bank getting a niche off the market but the reader should not be misled into false expectation from some of the mainstream banks-they have been worst enemies of their own and the chicknes are coming to roost

    1. Basil Rateiwa

      Vukani, the situation in Zimababwe has changed since 12 years ago. The Zimbabwean economy has move from being stable in 2000 into a hyper inflationary state (where there was ‘kuburner cash’) and back into stability through ‘multi-currencing’ over that period of 12 years. Barclays Zimbabwe could be ahead of the pack by Zimbabwean standards in innovation. Anyway, that is for another day’s debate.

      My view is that the Zimbabwean economy is in a ‘wait and see state’, due to political uncertainty within the country. Banks are unable to invest heavily in new products, as the returns could be negative. However coming up with smart products now, can prepare banks for big business when the economy finally comes back to life.

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