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The trailblazer in mobile payments is…Kenya?

Posted: , by Maxwell R.

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The trailblazer in mobile payments is…Kenya?
What if we told you half of the world’s mobile money transactions happen in just one country? It would be easy to think of an established market, or maybe even China, India or maybe a country along the Pacific Rim. It is Kenya of all places, where 80% of mobile phone owners use them for mobile payment and banking.

In fact, more than 60% of Kenyans that earn less than $2.50-per-day have mobile phones. “The idea of mobile banking was born in Kenya,” according to Calestous Juma, Director of Science, Technology, and Globalization at Harvard.

M-Pesa is the service that handles most of these transactions and it is operated by a company called Safaricom which is partly owned by Vodafone. The company launched the service in 2007. Customers add money to their account at any number of outlets located all over Kenya. They then can transfer payments via text message.

Safaricom serves more than 17 million people and about one quarter of Kenya’s gross national product flows through M-Pesa. The country’s economy has been growing at about 5% per year as well. M-Pesa’s success has fueled some of that growth since the service has allowed families to send money from abroad, increasing household incomes in rural areas by as much as 30%.

Because of the technology adoption rate, Kenya’s capital, Nairobi, has become a major tech-hub in Africa. M-Pesa’s success has also created a number of spin off businesses enabling mobile transactions to pay for public transit, school fees, housing, and connectivity to real bank accounts.

The success in Kenya is a model that Vodafone hopes to duplicate as it expands M-Pesa to India, Afghanistan and Tanzania. If Kenya is any indicator, it shows that developing markets are more than just a potential for revenue growth, but they are also potential technology leaders since there is little legacy technology to box thinking in. Kenya’s commerce is proof of building economic infrastructure without traditional barriers that might otherwise slow growth in some areas.

source: TechRepublic

17 Comments
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posted on 23 Mar 2014, 18:06 2

1. fzacek (Posts: 1250; Member since: 26 Jan 2014)


I'm just imagining a family of Kenyans in a little thatched mud cottage, each of them playing on a Galaxy S4 of their own. I know it isn't really like that, but that's what I first thought when I started reading this article...

posted on 24 Mar 2014, 01:10

8. Aplusk (Posts: 86; Member since: 10 Nov 2013)


it sounds good, but you dont need highend device. you can do mobile banking even with basic keypad phones.
Banks provides its app for all platforms like in .jar, .sis, .apk, .xap. . .
am sure no one would like to loose their sim card registered with bank.

posted on 24 Mar 2014, 03:04

10. deewinc (Posts: 155; Member since: 21 Feb 2013)


I am Kenyan dude! I won't take that as a complement. Although in most cases, it happens! Let's just say, the author did not think in your direction at the time of publishing his article.

However, I have to disagree with him. How comes a country where people earn less than $2.50 a day (as he says), are able to transact more money in day than Paypal, Skrill, Western Union and Moneygram combined via Mpesa?

You have to give it up for MPesa. More business schools like Harvard are now learning Mpesa as part of their unit in some subjects. It has truly revolutionized how we do business in Africa.

The same concept is not being adopted in more countries in Africa and Asia. Very soon even Europe and America will catch up with it. Safaricom is currently developing an NFC Simcard to enable the transactions between merchants and users faster and easy.

posted on 23 Mar 2014, 18:45 7

2. Bernoulli (Posts: 1434; Member since: 01 Sep 2012)


And this is to show those ignorant people that think people in Africa are still living in huts, I only know one person from Kenya, from a rural area, but from my friends that are from Nigeria it seems like Nigeria is really urbanized

posted on 23 Mar 2014, 19:17 3

3. kevinhope5 (Posts: 28; Member since: 06 Feb 2014)


" this
has made Kenya’s capital, Nairobi, has become
the tech-hub of Africa."
Seriously PA have you been to Cape town or joburg South Africa.... This shows how clueless people are about Africa

posted on 23 Mar 2014, 21:11

4. androiphone20 (Posts: 1394; Member since: 10 Jul 2013)


Exactly, I just love South Africa. That's why I'll be flying down there this spring

posted on 24 Mar 2014, 01:44

9. alumoyo (Posts: 142; Member since: 26 Aug 2013)


Story says A MAJOR tech hub - not THE tech hub. And even so, simply having the latest gadgets does NOT make you the hub. SA tech is overly restricted. You can't get an unlocked phone in SA for example, the networks basically control the devices market as well, or are impossible to separate from device sales. So when you go to the mall, the variety of devices is ABSOLUTELY PATHETIC. The tech landscape also ONLY SERVES the upper classes. There are basically ZERO tech based solution for the masses, which is what m-pesa is. SA has none of that. That's why they are saying Nairobi is now a major hub. This is a solution which has managed to include EVERYBODY into the tech economy. Even those who don't use a smartphone. The closets SA came to an ALL INCLUSIVE tech service/product was MXIT a few years ago - but that's been brutally murdered by whatsapp.

posted on 24 Mar 2014, 03:09

11. deewinc (Posts: 155; Member since: 21 Feb 2013)


He has said the truth. A lot of banking business in Europe are now using softwares developed by Kenyan entrepreneurs.

Also, the technology of using your phone to control your car remotely was developed by a Kenyan.

The only technology Kenya has imported from SouthAfrica is the use of a freezing screensaver of your image on a phone. But that was long ago on a Nokia 3310!

posted on 23 Mar 2014, 21:46 1

5. AppleHateBoy (unregistered)


I was wondering what the "m-pesa" ad was about. Now I know.

posted on 24 Mar 2014, 00:25

6. srk_srinivas (Posts: 21; Member since: 27 Dec 2010)


They don't have proper banking services, no bank is offering online services, ATMs mostly they don't work on weekends. That's the reason they are using mobile banking.

posted on 24 Mar 2014, 01:00

7. Aplusk (Posts: 86; Member since: 10 Nov 2013)


but still mobile banking is better than visiting atm you just need a phone which support mobile banking app even nokia s40 and nokia asha series. and for internet banking you just need laptop or a good tab since you need to visit banks website. features are awesome in mob/internet banking like you can pay light bills, mobile recharges, pay life insurances, transfer money to other bank account, enquire your balance lots and lots . .

i use all services like hell.

posted on 24 Mar 2014, 04:51 2

12. echenze (Posts: 1; Member since: 24 Mar 2014)


You have a very ignorant and misinformed view of Kenya. "They don't have proper banking services". Please verify that. "no bank is offering online services". Also verify this. "ATMs mostly they don't work on weekends." Duuude! We get money from clay dispensers or what? I'm a Kenyan and these things work!!!!! Mobile banking was introduced back in 2007 to reach out to the unbanked masses not because banking services like online banking or ATMs have issues. This and other comments here are totally misinformed. Kenyan dailies are online, you can Google and get this information first hand. Where were you when M-PESA was picking awards for innovation consecutively at MWC in the last few years?

posted on 24 Mar 2014, 05:10

13. Muche (Posts: 14; Member since: 22 Aug 2012)


People are so ignorant and misinformed! Oh Yeah! we live in thatched houses, you should also see the ostrich I've just parked outside my house

posted on 24 Mar 2014, 05:16

14. pierenyingi (Posts: 1; Member since: 24 Mar 2014)


Interesting that in this day and age , Internet, Google maps etc, folks still exhibit such level of ignorance. Mpesa is all about convenience... @srk_srinivas Our banks , ATM's + Online Banking systems work

posted on 24 Mar 2014, 06:05

15. TisaTsir (Posts: 54; Member since: 06 Jan 2014)


Kenya is my country...out of 10 mobile owners 8 have m-pesa services in the phones.'PESA' is a swahili word for money.

posted on 24 Mar 2014, 06:52

16. kevinhope5 (Posts: 28; Member since: 06 Feb 2014)


@9 alumoyo am sorry but it sounded like you said one can't get an unlocked phone in SA. please clarify. This mobile banking is also a big hit in Zimbabwe. All carriers are now offering the service. Its seems people are fed nonsense about Africa ^the comments above say it all.

posted on 24 Mar 2014, 08:46

17. TisaTsir (Posts: 54; Member since: 06 Jan 2014)


it all started in Kenya

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