Telecoms and internet
Zaad: Telesom's mobile money service in Somaliland
Zaad is the mobile money service of Telesom, Somaliland's largest phone company. It launched in June 2009 as Somaliland's first mobile money service, is free to use and works in US dollars. By June 2012 almost 40 percent of Telesom's subscribers used it, and in 2013 the GSMA found active users made more than 30 transactions a month, against a world average of 8.5. The GSMA certified Zaad in 2024.
The short version
Zaad is the mobile money service of Telesom, the leading phone company in Somaliland. Telesom launched it in June 2009 as Somaliland's first mobile money service (GSMA, Innovative Inclusion: How Telesom ZAAD Brought Mobile Money to Somaliland, 2013, p. 1). It is free for customers and holds money in US dollars (GSMA).
How it was built
- The company: in 2013 Telesom had close to 1 million mobile connections, about 85 percent of the Somaliland market. It was founded in 2002 and owned by about 1,500 shareholders, all Somalilanders living at home or abroad (GSMA 2013, p. 2).
- The investment: Telesom put about $1 million into the service in its first year. A quarter of that went into building its own platform with its own programmers (same source, p. 3).
- Free to use: the company made the service free from the start, so that it would keep customers on its phone network (same source, pp. 2–3).
- Own shops as agents: instead of signing up outside agents, Telesom used the shops it already owned and staffed, because Somaliland had no banking network or suitable chain of stores (same source, p. 3).
Merchants and salaries
Telesom's aim was to keep money inside the system, not to have people cash out every transfer. When Zaad launched in June 2009, 170 merchants had already agreed to take payments through it (GSMA 2013). The company also persuaded employers to pay salaries into Zaad wallets. In one example from the study, 300 of the 450 staff at Amoud University received their full salary through Zaad (same source). Customers had to show an identity document, such as a passport or driving licence, at a Telesom shop to register (same source).
Usage
- One year after launch, more than 70 percent of Zaad subscribers were actively using the service. The active rate never fell below 70 percent up to the 2013 study (GSMA 2013, section 3).
- By June 2012 almost 40 percent of Telesom's phone subscribers were active Zaad users (same source, p. 1).
- Active users made more than 30 transactions a month on average, against a world average of 8.5 (same source, p. 1).
- The World Bank's Findex survey found that 26 percent of people in Somalia used a phone to pay bills, then the highest rate in the world. The GSMA study said most of this activity came from Zaad (same source, p. 1).
Currency exchange
Most Zaad money is held in dollars, but Somaliland shillings are used for small purchases, so money changers are a key part of the system (GSMA 2013). Telesom later added an exchange service inside Zaad, which the GSMA describes as a way to drive more mobile money use (GSMA).
Certification
In September 2024 Telesom announced that the GSMA had certified Zaad under its Mobile Money Certification programme. The programme, introduced in 2018, checks services against more than 300 criteria (The Standard, 18 September 2024).
For the other services, see EVC Plus, Sahal and eDahab. For the wider picture, see Mobile money in Somalia and Somaliland's economy.
Sources
- GSMA, Innovative Inclusion: How Telesom ZAAD Brought Mobile Money to Somaliland, 2013, p. 1 · gsma.com
- GSMA · gsma.com
- The Standard, 18 September 2024 · standardmedia.co.ke
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Keep reading
- Somali telecoms, internet and media companies: directorySomali phone, internet and media companies, with founding year, head office, owner where public, and source.
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- Hormuud Telecom: Somalia's largest phone and mobile money companyHormuud Telecom in facts: founding, owners, EVC Plus and WAAFI, network coverage, cables, licences, jobs and its foundation.