There is a new entrant in the Kenyan ‘PayPal-to-Mpesa’ market by the name of MoneyJet. The financial technology firm operating in Kenya and the UK has its sights set on helping regular PayPal users in East Africa to withdraw money from their PayPal account directly to their Mpesa account. This is the first official competitor to the Equity Bank service launched earlier this year (July 2014) in Kenya. It claims to be faster, cheaper and even offers on-demand loans to users (which is a first).
Freelancers and other professionals working online get paid via PayPal but in Kenya (and most of Africa) there is a huge DELAY (Over 5 working days with Equity Bank in Kenya) getting that money from PayPal to cash that you can spend. As a result, anyone paid online in Kenya has been forced to contend with (and choose between) several problems depending on which existing option they use:
- Massive delays (sometimes up to 8 business days as with Equity)
- High fees (between 8% to 15% charged by middlemen)
- High exchange rates (sometimes losing up to 10 shillings per dollar)
It is these problems that MoneyJet seeks to solve with an online platform that is faster, cheaper and more convenient that any other player in the market. The service claims to carry several advantages:
- Speed: Even at its peak usage time MoneyJet users receive their money on Mpesa in 10 minutes or less (eliminating unnecessary delays).
- Affordability: MoneyJet itself charges 1% to process the transaction, but including PayPal’s transaction charges + network mobile money charges, the total cost per transaction to the user adds up to 5%. This is currently the cheapest rate on the Kenyan market.
- Better exchange rates: For the past 3 months, MoneyJet’s exchange rates have consistently been between 2 to 5 shillings (per dollar) above other PayPal-to-Mpesa options in Kenya.
- Convenience: Due to the lower commission and higher exchange rate than other market players, MoneyJet users receive more money per transaction and getting the money directly on their mobile phone eliminates the hassle & cost of going to the bank or ATM.
Sean Moroney (Aitec Africa Chairman and UK citizen doing business in Kenya for the past 27 years) is one of MoneyJet’s principle investors and he had the following to say about the service:
“The new developments made possible by this platform mean that a MoneyJet user can deliver a job online, get paid via PayPal and use that money to pay rent, utility bills or to buy food just 10 minutes later at an economical rate and without moving. This was impossible before unless one was willing to part with between 8% and 15% of their hard earned money. If you add up all the withdrawals done in a year and the savings made, this one change can have a huge effect on the quality of a person’s daily life.”
MoneyJet users will also be able to send money from their PayPal account directly to other people’s Mpesa accounts, helping them avoid the extra transaction fees and save time.
The game-changer: Freelancer loans
Users of the MoneyJet mobile app (which will be available for Android, iPhone and Windows phones starting December 2014) will also be able to get on-demand loans from the service that can then be repaid in instalments.
“MoneyJet’s credit facilities for freelancers are a historical first in Africa” says Sean Moroney. “We view freelancers as entrepreneurs running their own business. Used over time, the app creates a clear way to evaluate the revenue generated by this business meaning credit can be given. This availability of a loan option drawn on their future income is a ground breaking aspect of the MoneyJet platform as it now enables freelancers and other online professionals to for the first time access credit from their business in case of financial emergencies.”
According to MoneyJet the loan amount (and instalments) will be determined by the user’s transaction history. Users who build up a good credit score can get loans of up to $1000+ at a time.
The service is currently in invite-only mode but will be open to the general public as early as December 2014 (the company has not yet issued a specific date for the release). However, interested users can still request an invite on their website.