Are Africans ready for WhatsApp banking?

A handful of banks are growing the use of WhatsApp banking in African countries — but progress is slow, in part because people are used to mobile money and internet banking.

The banks have struggled in deepening adoption of the service because they first launched the service for doing simple queries like account balances, notifications, mini statements for at least three months before they integrated bank payments to WhatsApp. That delayed adoption.

The other challenge is that users still don’t trust banking done on social media. Many feel that it’s easier for hackers to access their bank account through WhatsApp than via ATM/credit cards.

Language barriers played a role in WhatsApp banking adoption in east Africa

Though Absa was the first bank to launch the service in east Africa when it unveiled it for Kenyans last year, I&M has rolled it out in Tanzania and Rwanda in the past few months.

The challenge I&M initially faced in Tanzania and Rwanda was language barrier. Tanzanians primarily speak Swahili, rarely using English so the bank had to spend some time doing  translations that WhatsApp’s API can understand. Most tech platforms including internet banking in Tanzania are done in Swahili. The same was with Rwanda which has four official languages.

“We had to translate all WhatsApp banking queries into the respective popular languages in both countries,” Maina said.

The other issue is awareness. Only a few people are aware of the service and for those who know it exists, they find it more convenient to transact on their bank accounts using mobile money.

The banking service, run by Meta,  is designed to send and receive money within the chat app. Meta launched WhatsApp banking in India and Brazil four years ago. In 2018, Absa became the first African bank to launch the service, rolling it out in South Africa.

Adoption was not immediate as it only registered 10,000 customers in the first four months with 54% of users asking for account statements on the first day of registration.

Absa, I&M and WhatsApp banking

In August last year, Absa unveiled WhatsApp banking in Kenya, a more tech savvy market, hoping to capitalize on the high smartphone and internet penetration in the country to recruit new customers.

“WhatsApp banking by Absa Kenya has grown immensely since last year with over 200,000 active users. We have registered over 500,000 interactive banking conversations,” Andrew Mwithiga, head of digital channels at Absa told Quartz.

While many Kenyans initially used the platform to perform queries about their bank accounts, Absa later enabled a bank transaction feature on the app which it said is gaining momentum.

“Bill payments and account to account transfers are the most common transactions now,” Mwithiga said without disclosing the actual transaction volumes and value.

I&M bank, which has operations in Tanzania, Uganda, Rwanda and Mauritius, is seeing a huge potential in banking Africa’s young population through WhatsApp and has recently launched the service in Tanzania and Rwanda.

After launching, live data the bank shared with Quartz shows that it has recorded 23,500 transactions with a value of $4 million in Tanzania. Absa had to make translations into the banking language on the app for the Swahili speaking nation.

In Rwanda, it onboarded 1,576 users who did 2,000 transactions in the second quarter of the year with a transaction value of $100,000.

Banks are chasing customers where they’re more concentrated

Chief executive of I&M bank Kihara Maina told Quartz that digital revolution is pushing service providers to social media channels with high concentration of potential clients, in this case WhatsApp.

“We want to be as customer centric as possible. We are taking our services to online channels with high ease of access, and where users are comfortable and familiar with. WhatsApp banking will be live in Kenya by the end of this year.”

The bank said it not only wants to help people to make payments faster, but also help them with data analytics on their expenditure patterns.

“This type of banking will penetrate as much as WhatsApp itself,” Maina added. Kenya is ranked top in the World in terms of WhatsApp usage penetration at 97%, followed by South Africa (96%) and Nigeria (95%).

Last February, Malawi’s MyBucks Banking Corporation introduced WhatsApp banking in its bid to make banking more convenient and simpler.

“We discovered that most of our clients use WhatsApp and we thought it wise to make available the services that would normally require them to visit the banking halls accessible at their fingertips,” the bank’s head of retail and SME banking, Mayamiko Kalizang’oma told Nyasa Times.

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