Banks, telcos fight for teenage customers before they turn 18
At the end of last year giant telco Safaricom launched M-PESA Go for 10- to 17-year-olds in a bid to capture an emerging teenage customers that remains largely untapped. This year, banks have revealed plans to step up issuing pre-paid cards to students, claiming it will help them stem theft while allowing them to make purchases in school canteens and supermarkets.
The banks are betting on pre-paid cards for students to help deal with the historic cases of insecurities around pocket money given to students per term while at the same time shoring up their customer bases.
KCB Bank’s Head of Digital Channels Strategy, Product and Business Development Johnson Ondicho, said they have already made significant strides. With over 391 schools and 386,000 students on-board their pre-paid card option, KCB is wooing a new customer base. The lender targets 3.7 million secondary students across the country in the plan.
Rival Coop Bank is pursuing a strategy where it is luring learners’ parents into the bank. Whether one has accounts in the bank or not, Coop Bank is seeking to onboard them. The parents only need to provide their National ID and KRA PIN numbers and the child’s birth certificate and passport size photo to access Coop Bank’s service.
Kenya is a young country with almost half of the population below the age of 15, making this constituency the most coveted.
Telcos and lenders expect that in addition to listing of millions of young learners as future customers, they will also help deepen financial inclusion and increase financial literacy among the youth.
Read also: Safaricom, TerraPay deal takes M-PESA to Pakistan, Bangladesh
Teenage customers using mobiles
While talking to Safaricom CEO Peter Ndegwa last year, he emphasized they had noticed a large number of young Kenyans with mobile handsets. The telco, however, lacked visibility of this constituency because the young ones use their parents details to register and operate the gadgets.
This, he said, provided a unique opportunity to begin learning their customers at a young age. Once onboarded early, the firms will have enough details of them by the time they acquire their own profiles at 18.
Mr Ndegwa said the new offering also gives parents control over what the kids are doing. They also provide a learning opportunity to teach financial literacy in schools. He said there are ways you can use that kind of product to enable young people to understand and also start to deal with some of the issues that show up in the industry such as doing the wrong things on the internet, and social media.
“So if you are below 18, most people, I would buy a phone for my son but under my name. In the future, it would be under his name but under parent control. So, there are sites they can’t go in, I see all the transactions that they undertake,” Mr Ndegwa said.
“When they are 18, they switch over as an adult without having to change the KYC. So, previously it was very cranky when someone gets to 18, and they have been using their parent’s phone, or at least a phone that’s registered by the parent. They have to go back to the shops and get the KYC, go through it from scratch, and we have about one million people turning 18 every year,” he explained.
