BANKING & PAYMENT TECHNOLOGIES EAST AFRICA, 2009: CashDingo is about to change the way business is done in East Africa

The World Cup is a key target for CashDingo because Kenya is a tourism hub, and if the country is not ready for efficient e-transactions, the country’s reputation will suffer as much as tourism and trade. Imagine a tour company that loses a booking because they cannot process a card transaction or sell their services online or a merchant that loses a customer because the client does not have cash on hand. “This happens all the time in Kenya,” according to Mark Sibthorpe, CEO of CashDingo, “I tried to book a Safari this past December but backed off when the agent could not process my debit card. Our aim is to solve such problems and many more by implementing a regional switch and payment gateway for banks and merchants. The result will have an impact on the entire economy as transactions will become more efficient, faster and less costly.”

CashDingo’s management team is deeply rooted in Kenya’s banking sector, with Hezbon Mariwa, a former Director at the Central Bank, as chairman of the board. The local team is supported by Canadian directors providing world class expertise. Says Sibthorpe: “This input is vital as Canada is widely regarded as having the soundest banking system in the world according to a recent survey by the World Economic Forum. Even today, Canadian banks are profitable, due in part to their impressive fee generating revenue – which would not possible without regional switches. For example, in Canada transactional switches have powered point-of-sale debit card transactions since 1994 and have helped debit cards to become the preferred payment method, outstripping cash. 2.7 billion card transactions were recorded by 400,000 merchants in Canada in 2004. We will bring these solutions to Kenya in time for the World Cup.”

Greg Marsh, CTO of CashDingo, sees cards as just one of the focal points for CashDingo. As a technology expert with companies such as CIBC(????), credit unions and international financial service companies, Marsh sees efficiencies across the board. For example, “We could help with fund clearing, offer banks white label ATM solutions through our partners, ensure inexpensive transactions and straight through processing for many types of transaction, including regional funds transfers. Imagine the possibility of cheques clearing real time, settlement of international payments within a few days as opposed to about 28 days today. What about easy access to debit cards that work throughout Africa, Europe and North America? We will even improve regional trade, as our plan is to link with or implement switches into the surrounding countries within the next 10 months.”

Sibthorpe and Marsh wax lyrical about the benefits their banking switch will bring to East Africa, including the following:

• The model is that the banks will be connected to one of the most advanced switches in the world currently running banks in countries all over the world including Canada, Australia, Nigeria.

• They will host a pan-African solution in Kenya in a brand new datacentre being built that has fiber optic connections to the rest of world.

• Banks will be able to increase fee-based revenue for services from their own clients and clients for competing banks if they have ATMs and their clients will benefit from having greater access to ATMs and POS devices.

• The banks will receive compensation for each part of the transaction that they participate in, either as the acquirer or the issuer, or both.

• Each partner bank will increase the number of clients because they will be dramatically increasing the number of POS devices first in Nairobi and then rest of Kenya. This will further increase banks’ customer loyalty and revenue stream. They plan to follow strategies used in other markets to ensure that people adopt new payment habits, such as POS. They want to convert everyone to using the cards. Their approach was pioneered in Canada, where it has been extremely successful, being one of the strongest markets in the world for electronic transactions.

• They will be providing a common set of POS devices for all banks so that there is a common platform for all banks.

• They are also going to dramatically reduce the cost of sending money between banks in Kenya and in future to the rest of the world by providing a common electronic funds transfer (EFT) platform between all organizations, including government departments, that need to send money to and from bank accounts.

• CashDingo will also be offering the banks the opportunity to convert their existing cards or add new cards that provide extended functionality and security.

• When their system performs transactions it will be connecting banks to banks via ATMs and providing settlement reports and detailed data files.

• It will also provide a common integrated solution for payments over the web, email money transfers, and a common platform for viewing account information. This means that clients’ interactions will be transformed and many new products will be available that were not possible before.

• Payments from 206 countries (so far) can be deposited directly and at low cost into Kenyan banks through CashDingo’s partnership with AlertPay Inc.

• Independent companies and retail chains can deploy ATMs and issue debit cards as a result of partnerships that CashDingo has with Globalis Technologies and other related partners, such as card manufacturers.

CashDingo will be launching its regional switch at AITEC’s Banking & Payment Technologies East Africa conference in Nairobi over 17-19. February Mark Sibthorpe will make a presentation in the conference on how the CashDingo regional switch will change banking in forever in East Africa: just in time for the 2010 World Cup.