Zain, which provides service in 22 countries across Africa and the Middle East, was facing a regulatory roadblock with Kenya's Central Bank but Zain's bank in Kenya, Standard Chattered, filed the requisite papers to settle issues that the government had raised.
To address security concerns raised by the Central Bank, Zain Kenya CEO Rene Meza emphasized the increased security and flexibility that the company has employed, pointing out that during the pilot phase, the service was used by several international companies operating in the region.
The launch of Zap represents the latest chapter in Zain's work to push the boundaries of mobile communications, said Saad Al Barrak, Zain Group's CEO. "For any market in the world, the combination of services we are providing would be exciting; but when set in an African context, the implications are especially profound," Al Barrak said.
Zap is expected to reach over 100 million people in Kenya, Uganda and Tanzania and compete with Mpesa, Safaricom's mobile money transfer service offered in Tanzania through Vodacom Group.
To address cross-border regulatory and banking issues, Zain is partnering with Citigroup and Standard Chartered to support the product.
Just like Mpesa, Zap will be used to pay bills, goods and service; receive money and send money to friends and family; send and receive money for bank accounts; withdraw cash; top up mobile air-time accounts; and manage bank accounts across the region.
"M-commerce has the potential to transform banking in Africa and will help overcome many of the obstacles presented by providing banking services to remote and rural communities," said Kariuki Ngari, Standard Chartered Bank's Area Head of Consumer Banking - East Africa.
"Research has shown that m-banking and m-payments can help lower the transaction costs of money transfer; increase the flow of money by making it easier to send smaller amounts and introduce those without bank accounts to a means of secure financial management," said Chris Gabriel, CEO, Zain Africa.
Zain plans to roll out the Zap service to the rest of its African and Middle East network and offer it as part of its One Network package.
Zap has at least 3,000 retail outlets in the region and customers will use the service to transfer between 50 Kenyan shillings (US$0.64) and 25,000 Kenya shillings.
Currently, Mpesa has 4 million registered users and allows transactions of between 50 shillings and 35,000 shillings.