An Alternative to M-PESA? Orange and Equity Bank Launch Iko Pesa

There’s been news of several new mobile money launches over the last few weeks. Digicel in Haiti has just launched its TchoTcho Mobile service. Its main competitor Voila has launched its service for use by relief organizations throughout the country.

In Kenya, Orange Money, branded Iko Pesa (Swahili for “there’s money”), was recently launched in partnership with Equity Bank. Orange Money has already launched in several countries in West Africa, including Cote d’Ivoire, Senegal, Mali and Niger; as well as in Madagascar. And Equity Bank has already partnered with mobile operators to launch products like M-KESHO. Clearly given the stronghold of M-PESA in the Kenyan market, Orange needed to be creative. So has it differentiated its product from others already in the market?

There are two ways to approach this question. First, we should ask how the Orange Money offering is different in Kenya than in other countries; and second how is the Orange-Equity Bank partnership different from the M-KESHO product that resulted from the Safaricom-Equity Bank partnership?

First, the Orange Money product in other countries offers a simple mobile wallet, similar to M-PESA. But in Kenya, there is no Orange Money wallet. The Orange Money account is a full bank account with full bank functionality. The front end of the Orange Money account is simply Equity Bank’s mobile banking platform rebranded as Orange Money. Orange (Telkom Kenya) brought the channel to the partnership in the form of a STK application loaded onto the SIM.

As a result, Iko Pesa is a classic mapped bank account where a normal account is fully integrated with a mobile channel. As such, all money transfers are account to account transfers. Because Orange Money is governed by banking rules (unlike the other mobile money services in Kenya) Orange Money has a higher initial limit of Ksh 100,000 (US$1,250) and allows multiple transactions per day. There are also plans for a cobranded Orange Money Mastercard.

Second, unlike M-KESHO customers, Orange Money customers in Kenya do not need to first transfer money into their Orange Money wallet and then subsequently transfer money into their Equity account. The M-KESHO set-up not only proves cumbersome at times, but it also adds another layer of transaction fees whereby customers first pay for a cash-in to load money into their M-PESA accounts, and then pay a transfer fee to move that cash to their M-KESHO accounts. In contrast, since technically there is no Orange Money wallet, this two-step approach between wallet and account is not necessary with Iko Pesa. That’s why some view this as the most versatile service in the market so far.

Time will tell if the Kenyan consumer will value these differentiating factors. Simply given Orange’s small market share in Kenya, it will be difficult to gain a lot of ground against M-PESA. But Orange and Equity Bank clearly have their sights set beyond Kenya. One report indicates that Orange and Equity have already signaled their intention to launch a similar product in neighboring Uganda next month before entering the Tanzanian and Rwanda markets next year. This expansion may quickly meet the untapped market demand for safe and convenient ways to send cross-border transfers among East African countries.

Beyond this vision for East African expansion, it seems to me that the main story here is how the mobile money market in Kenya has once again produced a different business model for us all to watch and analyze.


- Sarah Rotman


31 August 2012 Submitted by Sarah Rotman (not verified)

These are very good questions about how the “account to account” functionality affects the level of outreach and financial inclusion that Iko Pesa can have in the Kenyan market.

I asked Equity Bank for clarity on this issue. As it turns out, with Iko Pesa a customer can do an inter-bank transfer (any Equity account including Orange Money Account or M Kesho), an intra-bank transfer (using RTGS), a transfer to YU CASH or M PESA, or even a money transfer to any mobile phone number with the funds being collected at any of the Equity Bank channels (Branch, ATM, POS, Agent) or at an Orange agent.

Sounds pretty comprehensive to me!

31 August 2012 Submitted by Aamer Syed (not verified)

Hi Sarah,
Thanks for posting this article. Interesting news. A unique and differentiated product offering yet again from Kenya! Does this imply that Orange Money can only be used by Equity Bank account holders (since it can only facilitate account to account transfers)? If this is the case, then Orange Money will leave out the largely unbanked masses in Kenya. Or does it also include the M-Kesho customers who are technically Equity Bank account holders too?

31 August 2012 Submitted by Nils Clotteau (not verified)

Hi Sarah,

This is a very interesting development. One of your last point raises a question though. You’re mentioning that this service “may quickly meet the untapped market demand for safe and convenient ways to send cross-border transfers among East African countries”.
If this is a pure banking product, with account-to-account transfer from one bank to another (even if the delivery channel is a mobile phone), we still have 2 problems:
- bank transfers are relatively slow
- the pricing of bank transfers is not always adequate
Do you know how these issues have been addressed? Is there a specific pricing?

Thanks in advance


18 January 2016 Submitted by BMW (not verified)

Can Orange have their own Orange money system as safaricom mpesa: which has nothing to do with banks. I don't like equity bank and i can have any of my money in that bank. The day orange money will have nothing to do with equity bank, that's the time Orange money will be relevant!

Add new comment