The next battle frontier for banks will be fought on the mobile phone, signalling a widely anticipated drop in banking transaction costs by customers.

It also means that bank customers will enjoy convenience, easy access to their money and more secure services thanks to technology.

Already, Equity Banks' 2.6 million customers can enjoy such benefits after the bank on Wednesday officially launched a mobile phone banking service, Eazzy 24/7, taking its branches to the mobile handset devices and increasing its customer base.

Cost effective and adaptable, the service is expected to bring in more people into the formal banking system that currently has 4.5 million accounts countrywide. "Banking the unbanked has been a challenge for banks and Eazzy 24/7 will help reduce transaction costs and greatly improve the national payment system," said Central Bank of Kenya governor Njuguna Ndung'u.

Most banks charge an average of between Sh150 and Sh200 and EAZZY 24/7 will charge Sh50 to transact within its bank.

Growth

While such a transaction will only take minutes, transferring funds to another bank will follow the normal interbank process and duration.

Two Equity account holders with Safaricom lines can now credit and transfer cash into each other's account using their mobile phones in real time, subject to the availability of funds. Equity bank clients will also be able to pay their utility bills, purchase airtime, request their bank statements and perform 13 other crucial banking enquiries.

"The mobile phone boom has laid down a strong base for low cost banking and the growth of mobile phone solutions in rural Kenya shows that it can attract customers," said the bank's chief executive, Dr James Mwangi.

EAZZY 24/7 was widely expected to run in January though it has been on a test run since last year and will initially rely solely on Safaricom's network with the possibility of roping in other mobile service providers later.

Equity mobile banking technology is similar to Safaricom's popular money transfer service, M-Pesa which has had a successful launch transferring about Sh36 billion since its launch in March last year. This has caused unease in the banking fraternity due to the huge amounts moved by Safaricom in the absence of a law governing mobile money transfer in a clear case of technology overtaking regulation.

"CBK welcomes such innovations by the banking sector and is committed to the creation of an enabling regulatory environment towards this end," said Prof Ndung'u.