Nairobi — East Africa residents will soon enjoy cross border mobile phone money transfer services thanks to service provider Zain's launch of ZAP.

The launch will also see competition in Kenya's mobile phone service industry go a notch higher with the launch of the long awaited Zain M-Banking service.

The launch had been dogged by regulatory hurdles as the Central Bank of Kenya claimed the mobile service provider was yet to meet all the necessary requirements. This even as market analysts argued the move was aimed at giving a competitor already offering the service in Kenya undue advantage over Zain.

However, after months of a standoff between the company and government authorities over the licensing of the service, Zain Kenya unveiled the service last week in a simultaneous launch in Tanzania and a number of other African countries.

It will cost subscribers a flat rate of US$0.1 (KShs10) for each transaction. A minimum of $0.63 (KShs50) and a maximum of U$443 (KShs35, 000) can be transacted with a limit of 25 transactions for one subscriber in one day.

Zain has partnered with Standard Chartered Bank which will hold a trustee account for the service. Other banks and companies will have an account in Standard Chartered to enjoy the service.

The service will provide a reprieve to subscribers for apart from being a money transfer tool, it also comes with provisions for bill payment, goods and services payment and sending and receiving money from bank accounts. The service also allows for airtime top-up for one's phone or other Zain subscribers across the region. It gives subscribers an opportunity to manage their bank accounts over the phone.

The service will provide banking services to over 100 million people in Kenya, Uganda and Tanzania. It is estimated that 90 percent of this population is unbanked due to the up market nature of banking institutions.

The service will be initially available in Kenya and Tanzania before being extended to cover Uganda and a host of other African countries where Zain has operations.

"It represents the most comprehensive mobile banking services and will provide millions of people with access to banking for the very first time," said Zain Kenya CEO Rene Meza during the launch in Nairobi.

Meza said the company already has over 3,000 ZAP agents spread across the country with over 40 percent of Zain subscribers already hooked onto the service.

He said the company will be partnering with more companies to ease payment systems in tandem with the fast changing technology.

Zain Africa CEO Chris Gabriel said the launch was in line with the company's new products and services campaign that will see a number of innovative services and products rolled out over the next few months.

Rene said the company had signed up over 1.5 million new subscribers since late last year's re-branding exercise.

"ZAP will provide customers with increased security and flexibility, reducing the need to carry cash and ensuring that payments between friends and family remain secure," he said.

A password is required for each transaction and the service is protected through a state of the art security application. It will be available to subscribers round the clock.

The launch comes in the wake of heightened security concerns on the safety of mobile phone money transfer services even as the government gave a clean bill of health to the Safaricom operated M-Pesa service which has been in the market for the last two years. Subscribers will sign up for the service by completing an application form and every transaction will need one's identity card.

Zain was the first mobile phone service provider in Kenya to introduce phone-to-phone airtime transfer service in 2005 referred to as Me2U. Currently, over $10 million worth of airtime transfers take place in Kenya, Uganda and Tanzania.