Payments are just a phone call away

Service allows Kenyans to store and transfer money using mobile phones

An increasingly popular mobile payment service called M-Pesa is turning Kenya into a potentially lucrative e-commerce market in Africa.

Launched by telecom giants Vodafone and Safaricom in conjunction with the Central Bank of Kenya in 2007, M-Pesa allows any Kenyan with a mobile phone to store and transfer their money. Funds can be exchanged between users through SMS messages. There are about 18.5 million active M-Pesa customers.

Nzioka Waita, director of corporate affairs at Safaricom, says revenue for the service grew by 25 percent last year

"Currently in Kenya we are seeing an average 121.3 billion KSh ($1.4 billion) in real-time payments per month, with person-to-person payments growing by 20 percent; person-to-business transfers growing at 64 percent; and business-to-person payments growing at 83 percent last year."

The mobile payment service does not have to be installed on a smartphone, and a bank account is not required, making it potentially accessible for millions of people who are living in poverty in the country.

With the service, users can deposit cash in exchange for electronic money, allowing for efficient payments of water, electricity, phone and other bills.

"M-Pesa has emerged as the most efficient, safe and convenient way to send money across the country, and now beyond, without the need for a formal bank account. This has played a significant role for many Kenyans who would ordinarily been locked out of the formal banking sector," says Waita.

This shift meant that consumers would not have to wait for public service vehicles to send money upcountry; they can do it from the comfort of their neighborhood outlet and be assured that the money will arrive safely and instantly, says Waita.

Currently, there are 40 banks that have extended the M-Pesa service to their customers, more than 2,000 M-Pesa Pay Bill partners and 139,000 M-Pesa merchants.

Though Safricom's M-Pesa has no operations beyond Kenya, the telecom company has partnerships with Western Union and MoneyGram International that allow the companies' customers to send money directly to M-Pesa users, Waita says.

"There remains a lot of room for growth in Kenya, particularly given that nine out of 10 transactions in Kenya are still made using cash. Despite the relatively low uptake, data has the power to transform African economies.

We believe that mobile is the future of payment platforms. M-Pesa is already becoming one of the preferred payment solutions," he adds.

Kariuki Maina, marketing director of Kilimall International, an online shopping mall, says a mobile payment "solves quite a lot of problems".

"It can be very important, because in a country like ours, a lot of people don't have knowledge about alternative payment options, such as an account payments system. They even don't have access to Visa. But almost everyone has access to M-Pesa. As long as you have a phone, you have access to M-Pesa."

Zhou Bin, director of Sino-Africa Future Corp, lauds the M-Pesa mobile payment service.

"It makes East Africa a fertile ground for e-commerce development. People trust this payment model."

Safaricom recently launched its own online shop that mostly sells electronics such as mobile phones and tablets.

houliqiang@chinadaily.com.cn

(China Daily Africa Weekly 03/06/2015 page7)