Kenya Post moves into global money transfer business
The Postal Corporation of Kenya is digging in for a piece of the growing money transfer business to turn around its fortunes.
Mr Fred Omondi, the post master general, said the corporation had picked on money transfer as the turnaround programme it needs to overcome challenges that providers of similar services are facing globally and remain in business.
“Initially, we only need to control three per cent of the total remittances to remain in business,” he said. With the remittances estimated to have hit the Sh70 billion mark last year, controlling one per cent of the business would see the corporation handle Sh700 million, earning it not less than Sh100 million.
The drive for a marketshare kicked off in the United States last week with aggressive marketing of the company’s electronic money transfer system called Postapay.
The initiative comes at a time when the corporation is facing stiff competition in the money transfer market, with the launch by the country’s two mobile operators Safaricom and Celtel of SMS-based money transfer services.
Competition in the courier market that has been the main revenue earner for the company has also intensified, following the entry of more than 100 players, reducing its marketshare to five per cent.
Other than targeting foreign remittances, PCK has put aside Sh150 million for value added services that it intends to roll-out.
Part of the money is earmarked for infrastructure improvement meant to ease communication between branches and boost efficiency in service delivery. Although PCK has one of the widest branch networks in the country, failure to automate them has slowed down the speed of transactions within its network.
It is also looking forward to use findings of a study, set to begin next month and commissioned by the regulator Communication Commission of Kenya (CCK), to determine the potential of postal services and size of the market outlay.
Stiff competition and need to keep in tandem with current market demands compelled CCK to introduce new services especially in the financial sector to attract more customers and enhance efficiency.
Other than banks and private courier operators, mobile operators have also entered the money transfer field.
