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M-PESA
M-PESA is a brand that has become synonymous with mobile money transfer services in sub-Saharan Africa. Launched in Kenya in 2007 by Safaricom, M-PESA quickly gained popularity among Kenyans who did not have access to traditional banking services, as it offered a convenient and secure way to send and receive money using their mobile phones.
M-PESA additionally operates in Tanzania, Egypt, Lesotho, the Democratic Republic of Congo (DRC), Ghana and Mozambique.
Over the years, M-PESA has steadily solidified itself as its parent company’s most profitable service, contributing nearly half of Safaricom’s total
gross earnings. By the end of 2022, its revenue had recorded a growth of 30.3 percent to KES 107.7 billion.
M-PESA is widely known for its simplicity, convenience, and reliability. It has maintained these values even as it continuously expands its portfolio of products and services to include bill payments, airtime topups, access to easy credit, and loans, serving both personal and business needs. The brand dominates the Kenyan mobile money market with a whopping 96.8 percent share.
The mobile money platform’s success has led to the introduction of similar services in other countries across Africa and beyond. For instance, M-paisa was launched in Afghanistan when Vodafone, one of Safaricom’s major shareholders, partnered with Roshan, Afghanistan’s primary mobile operator, to provide the service in 2008. Consumers are afforded the ability to pay for goods and services at registered merchants, as well as pay for utilities, school fees and other services through their mobile phones using the Lipa na M-PESA product.
Today, there are just below 500,000 Lipa na M-PESA merchants. In 2020, Pochi La Biashara was introduced, a product that allows M-PESA registered customers who own informal businesses to receive and separate business funds from personal funds on their M-PESA number.
M-PESA also offers various savings and loan products, such as M-Shwari (through its partnership with Commercial Bank of Africa (CBA), now NCBA) and KCB M-PESA (through its partnership with KCB Bank) that enable users to save and instantly borrow money via their mobile phones. Both loan platforms earn consumers interest of up to 6.3 percent per annum on their savings balance.
In addition, Fuliza was introduced in 2019 as an overdraft service that allows M-PESA users to complete transactions even when they have insufficient funds in their accounts. Through M-PESA Global, M-PESA customers are able to send funds within East Africa, to Rwanda, Tanzania and Uganda; and globally, to millions of bank accounts and over 500,000 Western Union locations.
Moreover, users can receive international money transfers through both Western Union and PayPal. Investment options are equally available among the services offered by M-PESA. For example, government bonds, such as M-Akiba specifically designed for small investors, can easily be bought, sold and monitored through one’s mobile phone. Unit trusts and money market funds offered by diverse financial institutions are also viable options that can be invested in and tracked using M-PESA.
In 2022, M-PESA Go, a new financial product which targets teens and preteens aged between 10 to 17 years, was launched. The product allows subscribers to enjoy M-PESA services, under the supervision of their parents or guardians, in a bid to raise a financially healthy generation.
Some of the qualities that make up M-PESA’s indelible character include: Innovation, evident from its wide array of products offered; Accessibility, portrayed through its vast network of over 200,000 agents and outlets across Kenya; Security, assured by the fact that all M-PESA transactions are protected by a personal identification number (PIN); Affordability, as charges are relatively low; and Flexibility, in terms of the amounts that can be transacted.
Through its philanthropic arm, the M-PESA Foundation, M-PESA uses technology to drive social transformation in Kenya and the larger African continent, with a focus on education, health, environment and economic empowerment.
The visionary and futuristic leadership offered by Sitoyo Lopokoiyit, the Managing Director (MD) of M-PESA, heavily accounts for the disruptive leading technology that the mobile money service has embedded itself as.
M-PESA is a powerful, customer- obsessed brand that has revolutionised the way people in sub-Saharan Africa conduct financial transactions. Its success is a testament to the power of innovation, and its impact on financial inclusion in the region cannot be overstated.
