M-Pesa is a mobile phone-based money transfer, financing, and micro-financing service that provides a fast, secure, and convenient way to transact on mobile devices. It is a registered trademark of Vodafone and its operations cut across Kenya, Tanzania, Afghanistan, South Africa, India, Romania and Albania.
M-Pesa has 33.5 million wallets In Kenya, 66% (22.6 million) of which is used MONTHLY. It started as an unregulated payment facility and it got to 20.2 million wallets before the regulators kicked in. However, what is fascinating is that its growth was already unstoppable.
Their goal is to become a payment lifestyle company. For this, it started by leveraging data to build services on top like micro-lending and micro-savings platform – M-Shwari (having 27.3 million clients) or another micro-lending platform in collaboration with Kenya Commercial Bank (which has 12.7 million customers). Currently, they have enabled over 90 startups on their platform, using API for third parties to build top services.
M-Pesa wallets are fully interoperable with all 43 banks of the country as well as with all the other wallets. My friend Paul Kavavu, Head of New Business Ventures for Safaricom, posits that interoperability works best where there is a uniformed distribution of the wallets. It is for this reason that its impact in Kenya was not as huge as it could be in other countries like Egypt.
In 12 years, financial Inclusion rate in Kenya went from 26% to 83%, making the country the third most financially enabled in Africa. The company is making new strides and seeking to further enhance the operability of its systems. Its next challenge is geared towards making money by empowering customers. Instead of simply charging them, it plans to leverage transactional and personal data to build growth-enabled services.
Theirs is an amazing story and one we should all be on the lookout for.