Before beginning analysis of this case, watch the following video about the mpesa. In this video, nick hughes, head of international mobile payment solutions, vodafone group, talks about their product mpesa in kenya a mobile payment service which allows customers with a. Aug 12, 2015 m pesa s impact in kenya put mobile money services on the map. While mpesas rails offer the potential, kenya may yet have to wait to realise comprehensive, commercially sound, affordable and effective financial inclusion. You probably are thinking of starting a business and maybe the idea of an m pesa shop has crossed your mind. This was a key factor in moving to the new platform. About this app the fastest and safest way to send money and make digital payments in tanzania. Many studies exist on mpesa, and many others are under way that focus on examining the effects of mpesa at the household. Mobile phone services in kenya have operated as a duopoly with safaricom. Subsaharan africa kenya vodafone and safaricom kenya. In this paper we examine how m pesa is being used in kenya. Actually, when m pesa started, kenya s commercial banks implored the government to impose regulations to impede its development, but the government decided to take a hands.
The most successful of these systems, and the first to operate on a large scale, is mpesa, a joint venture between mobile phone giant vodafone. Clearly, vodafone had failed in its attempt to market mpesa in india even though india is a rapidly growing emerging market with a gross domestic product gdp growth of 8. Mpesas failure in india by jackson lott and mona sinha. Today, as it faces new challenges, it has 30 million users in 10 countries and three continents. M pesa m for mobile, pesa is swahili for money is a mobile phonebased money transfer, financing and microfinancing service, launched in 2007 by vodafone for safaricom and vodacom, the largest mobile network operators in kenya and tanzania. Most part of this documentation is a duplication of safaricoms documentation which is in pdf preamble. Launched in april 2007 by the nations largest mobile provider, safaricom, mpesa has quickly become the worlds fastest growing mobile payment services. Interviews with m pesa agents, financial institutions and key community members were carried out. For m pesa users in kenya, having answers to burning questions centring on the mobile money transfer service is as important as utilizing the service itself. Mpesa is a mobile phone based money transfer system in kenya which grew at a blistering pace following its inception in 2007. In this paper we examine how mpesa is being used in kenya. Practitioners insight mpesa a success story of digital. The lack of financial inclusion in kenya is fueled. Many studies exist on m pesa, and many others are under way that focus on examining the effects of m pesa at the household.
The contribution of m pesa to deepening financial inclusion for the poorest socioeconomic groups in kenya is significant. Like any business, running an m pesa shop is very profitable and with the right knowhow of its operations and with the right approach, this is one business you can make a fortune out of. Safaricom kenya mpesa transfer and withdrawal charges depend on the amount in the transaction. Emoney for enhancing mdgs at bottom of the pyramid. Moving the money from mpesa is free of charge or ledger fee. Mpesa is a mobile money transfer service in kenya, its one of the best online payment options. M pesa is expanding slowly to interior areas, and the volume and number of transactions fluctuate based on.
Equity bank, as the largest bank in kenya by customer base, came close to unlocking this exclusivity when it partnered with safaricom to launch mkesho in 2010. Vodafone said mpesa usage worldwide increased 27 per cent year on year to reach 23. The new m pesa platform dubbed g2 for m pesa 2nd generation platform offers versatile integration capabilities that our development partners can take advantage of, to create excellent m pesa journeys across the different industries they serve. By janet kamana, nairobi mpesa is a mobile money transfer service supported by safaricom, kenyas largest mobile network operator.
Safaricom to effectively deploy the m pesa scheme, and has encouraged millions of users to rapidly adopt the service. Nov 22, 2010 the most successful of these systems, and the first to operate on a large scale, is m pesa, a joint venture between mobile phone giant vodafone and kenya s safaricom. This paper uses a novel, threestep probit analysis to identify the sociodemographic characteristics of, successively, respondents who do not have access to a sim. Study objective this study is the first of its kind to explore the economic effects of m pesa in kenya at the community level.
Within the first month safaricom had registered over 20,000 m pesa customers, well ahead of the targeted business plan. Tonny kerage omwansa is a lecturer at the faculty of information technology at. Equity bank, as the largest bank in kenya by customer base, came close to unlocking this exclusivity when it partnered with safaricom to launch m kesho in 2010. The app delivers a superior m pesa experience, making it possible to send money to loved ones, access your bank account, pay for goods and services, send money. A mobile banking service that allows users to store and transfer money through their mobile phones. The mpesa service allows users to transfer money from their mpesa account, using pinsecured sms text messages, to other users and nonusers, who can then exchange it for real money. But it does give us glimpses of a commercially sound, affordable and effective way to.
The researchers found that mpesa helped women graduate from subsistence agriculture to small business, perhaps because having an mpesa account gives a woman her own moneyand a greater sense of agency. Specifically, we need to understand if and how mpesa affects households and communities. Safaricom, mpesa has become ubiquitous to everyday life in. In may 2008, 14 months after the launch, mpesa in kenya had 2. Users may freely register at a network of more than 20,000 agents who. Usage and impact from mpesa august 2009 brief despite growing agreement on the potential of technology to expand access to.
Mpesa continues to dominate kenyan market mobile world live. How does the mpesa service work and what are the risks. Mpesa is a money transfer system operated by safaricom, kenyas largest cellular. Google testing replica of m pesa, kenya s mobile banking solution duration. Tailormade for the kenyan society, where many feel formal bank accounts are out of their reach while mobile phone technology has become pervasive, m. Specifically, we need to understand if and how m pesa affects households and communities. Mpesa, a mobilephone based electronic payments system, has been adopted by 8. Tanveet suri shows that a mobilemoney service called mpesa had a longterm impact on poverty in kenya, writes tina rosenberg for the new york times. Mpesa, the largest and most innovative mobile financial service in tanzania has enriched your experience by launching the mpesa app. You probably are thinking of starting a business and maybe the idea of an mpesa shop has crossed your mind. Mpesa is a unique innovation that is rapidly evolving laws must be flexible in order to accommodate new changes and not confine development of new products. Choosing kenya due to the strong penetration of mobile technology within the country, safaricom and vodafone set out to design a mobilebased product, mpesa m for mobile, pesa the swahili word for money, to facilitate customer loan repayment to microfinance institutions. Community level economic effects of mpesa in kenya.
Pesa itself does not constitute financial inclusion. M pesa is a mobile phone based money transfer system in kenya which grew at a blistering pace following its inception in 2007. It costs a little more to send money to nonregistered subscribers. Mpesa is an application that resides on the sim card of a mobile phone. The contribution of mpesa to deepening financial inclusion for the poorest socioeconomic groups in kenya is significant.
In march 2007, kenya s largest mobile network operator, safaricom part of the vodafone group launched m pesa, an innovative payment service for the unbanked. Kindly be patient as the request is processed, check back anytime within this period in order to complete the installation. Feb 21, 2017 the m pesa mobile payment system was launched in kenya in 2007. Productivity, innovation, and entrepreneurship mobile money is a tool that allows individuals to make financial transactions using cell phone technology. In this paper, we report initial results of two rounds of a large survey of households in kenya, the country that has seen perhaps the most rapid and widespread growth of a mobile money product known locally as m.
We combine the 2006 and 2009 finaccess surveys and create a. The maximum one can send using mpesa is ksh 70,000 per transaction. Anyone can send money in all over kenya through mpesa. Mpesa is, in effect, a smallvalue electronic payment and store of value system that is accessible via mobile phone.
The mpesa mobile payment system was launched in kenya in 2007. Introduction mpesa, the mobile banking and payment system in kenya represents the gold standard for innovative financial services. Customers can get emergency loans without producing collateral or fill any paperwork. This latter percentage will undoubtedly have risen by may 2011 when mpesa had over 14 million registered sims. Do not delete browsing history, cookies, cache nor reset your internet explorer settings. Aug 04, 2014 when m pesa was first launched in south africa, it was almost a carboncopy of the mobile money transfer service that had already gained million customers in kenya in the previous three years. We combine data from a number of sources including microlevel survey data the finaccess surveys, transaction data from m pesa agents, price data from money transfer companies, and aggregate data from safaricom and the central bank of kenya. We examine how mpesa is used as well as its economic impacts. Mpesa launched in kenya during 2007 and is often held up as an example of the transformative impact mobile money services can have on a country. The app delivers a superior mpesa experience, making it possible to send money to loved ones, access your bank account, pay for goods and services, send money. Safaricom launched mpesa in kenya in march 2007 and has since become the most famous and probably the most successful implementation of mobile money service to date.
Mpesa was originally introduced in kenya as an alternative way for the unbanked. It is arguably the most developed mobile money transfer system in the world, and has transformed the lives of many kenyans. The success of mpesa in kenya has proven that mobile money services havethe potential to revolutionize access to financial services worldwide where over 2. Factors behind mpesas succes large market share market share of safaricom in kenya was in excess of 80% at the time of launch of the service. Jan 25, 2017 m pesa launched in kenya during 2007 and is often held up as an example of the transformative impact mobile money services can have on a country. A further description of the partners and their complementary roles in this initiative follows below. Mpesa mobile money transfer service in kenya, best. Titled, money, real quick the story of mpesa, the book, credits kenya for the growth of mpesa. Mpesa m for mobile, pesa is swahili for money is a mobile phonebased money transfer service, payments and microfinancing service, launched in 2007 by vodafone group plc and safaricom, the largest mobile network operator in kenya. Prior to mpesa, mobile phone customers had engaged in trading prepaid airtime. Interviews with mpesa agents, financial institutions and key community members were carried out. Mpesas impact in kenya put mobile money services on the map. Surveys of users show it is a highly valued service, and safaricom. Mpesa allows users to exchange cash for efloat on their phones, to send efloat to other cellular phone users, and to exchange efloat back into cash.
The study finds ambiguity in defining agents with several layers of operators providing m pesa services. M pesa, the largest and most innovative mobile financial service in tanzania has enriched your experience by launching the m pesa app. Extending financial services to the poor in rural kenya 3. We examine how m pesa is used as well as its economic impacts. Mobile financial services such as m pesa in kenya are said to promote inclusion.
Mpesa is expanding slowly to interior areas, and the volume and number of transactions fluctuate based on. From safaricoms website the new mpesa platform dubbed g2 for mpesa 2nd generation platform offers versatile integration capabilities that our development partners can take advantage of, to create excellent mpesa journeys. Pdf an analysis of mpesa use in international transactions. The maximum daily mpesa transaction limit is ksh 140,000. Mpesa as network standard as of late 2011, more than 14 million kenyans were registered users of mpesa, a popular mobile money service of a local mobile network operator, safaricom. It has since expanded to tanzania, mozambique, drc, lesotho, ghana, egypt, afghanistan, south africa, india, romania, and albania. The study finds ambiguity in defining agents with several layers of operators providing mpesa services. Questions like their charges for withdrawing from an agent, cost of transferring money to an unregistered safaricom number, and rates are always in the spotlight. Do the mpesa rails contribute to financial inclusion. Vodafone launches mpesa in ghana mobile world live. In may 2008, 14 months after the launch, m pesa in kenya had 2. Titled, money, real quick the story of m pesa, the book, credits kenya for the growth of m pesa. Jun 29, 2012 in this video, nick hughes, head of international mobile payment solutions, vodafone group, talks about their product m pesa in kenya a mobile payment service which allows customers with a.
Mpesa in kenya is run by the countrys largest operator safaricom, of. Mobile financial services such as mpesa in kenya are said to promote inclusion. In 2015, kenya commercial bank partnered with mpesa to start a mobile based savings account, kcb mpesa. Mpesa and the rise of the global mobile money market.
Mobile financial services such as mpesa in kenya are said to promote. Browse here for more information regarding m pesa statistics, history of m pesa, access trust deed forms and next of kin claim procedure. In essence, mpesa is a persontoperson p2p money transfer system that allows individuals to make payments and send remittances. Financial services for the underbanked contributed. Financial services for the underbanked contributed by. This indicates that the exceptional growth rate of m pesa in kenya is a unique phenomenon that may not be repeated in another country. M pesa was originally introduced in kenya as an alternative way for the unbanked.
We combine data from a number of sources including microlevel survey data the finaccess surveys, transaction data from mpesa agents, price data from money transfer companies, and aggregate data from safaricom and the central bank of kenya. This is the unoffocial documentation for the mpesa api. In what can be seen as good business foresight, mpesa had made its agency contract with mpesa agents exclusive, meaning mpesa agents were off limits to banks as agency banking outlets. Like any business, running an mpesa shop is very profitable and with the right knowhow of its operations and with the right approach, this is. Study objective this study is the first of its kind to explore the economic effects of mpesa in kenya at the community level. When mpesa was first launched in south africa, it was almost a carboncopy of the mobile money transfer service that had already gained million customers in. Questions like their charges for withdrawing from an agent, cost of transferring money to an unregistered safaricom number, and rates are. Vodafone launched mpesa in india in 20, but by mid2019 it had announced its plans to merge its mobile wallet business with an associate company or a third party. Mpesa is a money transfer system operated by safaricom, kenyas largest cellular phone.
In what can be seen as good business foresight, m pesa had made its agency contract with m pesa agents exclusive, meaning m pesa agents were off limits to banks as agency banking outlets. As a result, this paper recommends that service providers move away from importing the. Safaricom launched m pesa in kenya in march 2007 and has since become the most famous and probably the most successful implementation of mobile money service to date. For mpesa users in kenya, having answers to burning questions centring on the mobile money transfer service is as important as utilizing the service itself. It has since expanded to afghanistan, south africa, india and in 2014 to romania and in 2015 to albania. Browse here for more information regarding mpesa statistics, history of mpesa, access trust deed forms and next of kin claim procedure. Actually, when mpesa started, kenyas commercial banks implored the government to impose regulations to impede its development, but the government decided to take a. The mobile money platform has now grown, from a basic money transfer tool to a mobile money facility. Mpesa mobile money transfer service in kenya, best online.