A Kenyan technology firm has built a new e-commerce platform that is promising to change the way consumers will bank, buy goods and settle bills using their mobile phones.
Known as Elma, the mobile phone application is the creation of Craft Silicon, a firm that has built a fortune building software for various clients across the globe. As far as mobile money technology goes, Elma stands on the threshold of a revolution that began with the launch of Safaricom's M-Pesa four years ago.
The application, which runs on 3G enabled mobile telephone handsets, allows users to do business with any service provider who has installed the platform without giving the operators undue control over its functioning making it the most promising solution to concentration of mobile money business in the hands of telecommunication companies.
With Elma, consumers can transfer money, pay bills, buy airtime, buy stocks and check commodity prices from the comfort of their seats at a monthly average cost of Sh80.
The application has opened a new battlefront for control of electronic commerce that in Africa is being fought on mobile money platforms unlike in the developed world where the credit card was king.
Mr Kamal Budhabhatti, the founder and chief executive of Craft Silicon, says it took him more than one year to find a solution to mobile money's biggest challenge - interoperability.
This means that unlike M-Pesa, Zap, Iko-pesa, or yuCash that are specific to the telecoms operators, Elma can be used on any of the mobile telecoms platforms to connect consumers to their accounts in any bank.
"The banking solution we are offering gives lenders the best chance to take back into their system part of the money that their clients are keeping in phones in the form of mobile money float," said Mr Budhabhatti.
What makes Elma tick is the fact that it gives the banks an effective tool to prevent customers from withdrawing money from their accounts for keeping in mobile money accounts.
Craft Silicon is pushing the boundaries of competition further by offering banks the Elma platform free of charge, meaning that the financial institutions are incurring no additional costs making the platform part of their operations.
Mr Budhabhatti says Elma is in the last phase of piloting in smaller financial institutions such as Paramount Bank, Oriental Commercial Bank, Guardian and Chase banks and is now ready to go into the larger banks.
It is also promising to open a new frontier for banks to increase their competitiveness in a financial services market that has come under heavy attack by mobile phone operators in the past three years denying them a significant proportion of transaction fees.
Kenya's top mobile operator, Safaricom, launched the country's first mobile money transfer platform M-Pesa in 2007 that has since handled cumulative transactions worth Sh828 billion from a customer base of 13.8 million. Official data shows that by the end of March this year, the mobile money platform was moving an average of Sh47 billion per month or an average of Sh1.5 billion per day. The rapid growth of mobile money transfers is mainly hinged on low transaction costs, safety and speed that give users near-instant cash transfers.
The M-Pesa revolution has not only been replicated by Safaricom's rivals - Airtel, Telkom Orange and Essar's Yu - but also by other mobile operators around the world, edging out traditional bank-based money transfer solutions such as MoneyGram, PostaPay and Western Union.
Craft Silicon says Elma is poised to challenge the dominance of mobile operator-linked money transfer platforms with the offer of a more competitively-priced service and a wider range of possible transactions than anything in the market today.
To demonstrate his point, Mr Budhabhatti gives the example of transaction costs for the current mobile money transfer services now standing at an average of Sh30 to send the minimum amount and Sh25 to withdraw. For users sending money they have drawn from an ATM they incur an additional Sh25, raising the total cost of transaction to Sh80 the same amount that consumers are charged for using Elma every month.
"We host it 100 per cent on our infrastructure and both large and small companies can have it without incurring any capital costs because we also customise it free of charge," he says.
Mr Budhabhatti says the low cost structure is hinged on the fact that the product has been made to execute more than just cash transfers and pay "Churches can, for instance, use Elma to collect offertory electronically and direct it to the safety of their bank accounts," he says.
The biggest hit for the platform however lies in the yet to be launched electronic shopping function that will enable consumers to have a virtual walk through the supermarket, identify what they want to buy, click on it and pay electronically clearing the way for delivery to an identified location.
When this function is activated, shoppers will no longer have to visit supermarkets to buy consumer goods but will shop from the comfort of their offices and have the wares delivered to their homes or other destinations of their choice.