The Money Transfer Service – Competition in the global market

In any given market a lusty business is angiotensin-converting enzyme that looks for a strategy that will give it a competitive advantage over the rest of the players in the industry. This is key in lancinate the market and ensuring that it stays a notch above the others in the delivery of a good or service to its clientele. In many cases competition is kind of healthy, as articulated below with regard to the wars between Coke and Pepsi Companies in the United States The warfare must be perceived as a act battle without blood. Without Coke, Pepsi would defecate a tough time being an original and lively competitor.The more successful they are, the sharper we have to be. If the Coca-cola company didnt exist, wed pray for someone to invent them. And on the other side of the fence, am sure the folks at Coke would say that nothing contri barelyes as a great deal to the present day success of the Coca Cola Company than Pepsi. All types of businesses, however small they are, have had competition in one way or another. A mama mboga business will definitely have competition from the neighbours selling the product. At the beginning in that respect might seem to be none, but over time the competition emerges.Historical Background. The traditional electronic currency transfer services include but not limited to the following electronic Funds Transfer (EFT) service offered by banks, where monetary resource take one day to be transferred to the recipient. Real Time Gross Service (RTGS) here funds are transferred between banks within a span of two hours upon the instructions being issued by a client. This is a much faster approach than the EFT module, fortune as a big boost mainly to business people who need to seal deals faster. Telegraphic Transfers (TTs) this relates to the sending of funds from one country to another, and takes nearly four working hours.money Orders. These methods listed above require that one operates a bank account something considered a lu xury in many parts of the growing countries. Likewise in Kenya this proves a challenge especially for the people in the rural areas and the informal settlements. As mentioned above, this listing is not conclusive as there are other known conventional means of sending money that include the following Western Union Money Transfer Service Money Gram Money Transfer Service These two are phenomenon in sending of funds globally. Mobile Money Transfer Service No one ever envisaged that some day it would be possible to send funds using nomadic call offs.However Kenya has now been get intod to the foundation arena as a result of pioneering the mobile money transfer service, Safaricom synonymous with the m-pesa product. The mobile money transfer refers to the movement of money from one destination to another by put on of the mobile phone as a means of transfer. In essence this refers to translocation of e-money from one point to another without the involvement of physical translocation. The journey of mobile money transfer began in the early years of 2000, with the launching of Sokotele by the then Celtel mobile company.The service enabled one to send funds via mobile, where the transaction was initiated through a financial institution to the recipients mobile. The recipient then would walk to a branch of the financial institution and be paid. The m-pesa product worked on the said(prenominal) module but enhanced the same, by putting the power of money transfers in the hands of the cellphone owner. This meant the bank link was removed from the equation, with the people relations with each other through agents spread all over the country including the remote rural areas.The invention of the money transfer service has seen all the mobile companies in Kenya running the service, not ready to be left behind by the competitors. The facility is now spreading fast to other countries globally, albeit under diametric names. Competition The invention of the mobile money tr ansfer has brought about a revolution in the financial sector, affecting the forms of funds transfer as mentioned above. This is slowly permeating the global scene, with Kenya serving as the home of mobile money transfer. The new product has great implications on the financial sector, both positive and negative.Banks have since taking advantage of this technology to bring on board clientele that have adopted mobile money transfer. They have relied on this platform to introduce mobile banking to their clients, empowering them to have their bank accounts in their hands whereby they can withdraw funds from their accounts by use of the mobile phones and vice versa. On the downside of it, a greater portion of the population is now saving their money on the mobile money transfer facilities. The facility seems to be growing fast into an e-bank, which affects the deposits that are traditionally found in banks.This has seen banks aggressively move to the public in search of deposits, thereby giving large interest rates n the deposits, contrary to the outgoing where interest rates paid on deposits by banks were very low. The diversity of added provides on the main mobile money transfer service is making conclusion tight on banks. The adoption of M-Shwari encourages clients to save with the intention of borrowing, with the collateral being the savings as opposed to known collaterals such as land appellation deeds. The use of Western Union and Money Gram locally has declined due to the convenience of M-pesa, Airtel Money, Yu Cash and Orange Money in Kenya.With the spread of these facilities across the world (e. g. Airtel money in many African countries and India). With reduced demand for the formally established products, some of the providers have opted to partner with the money transfer service providers in order to tap into the great technology e. g. Western Union partnered with Safaricom, whereby funds can be send from overseas direct to ones phone in Kenya. The mo ney transfer service has also seen the introduction for card transfer services such as Nation Hela, whereby money can be dent from abroad direct to ones visa card, with a notification direct to the recipients phone.Currently payment of a fleck of bills is made direct from the phone as opposed to going to queuing to make payments e. g. electricity bills, water bills etc. Conclusion Kenya is fast becoming home to a number of world accredited money transfer services that are equally spreading across the globe. These are expected to bring about bad but healthy competition on the financial front. These great innovations shall force financial institutions to rethink their strategies find the best way to take competitive advantage.