The trailblazer in mobile payments is…Kenya?

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



1. fzacek

Posts: 2486; Member since: Jan 26, 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...

8. Aplusk

Posts: 120; Member since: Nov 10, 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.

10. deewinc

Posts: 455; Member since: Feb 21, 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.

3. kevinhope5

Posts: 53; Member since: Feb 06, 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

4. androiphone20

Posts: 1654; Member since: Jul 10, 2013

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

9. alumoyo

Posts: 392; Member since: Aug 26, 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.

11. deewinc

Posts: 455; Member since: Feb 21, 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!

5. AppleHateBoy unregistered

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

6. srk_srinivas

Posts: 22; Member since: Dec 27, 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.

7. Aplusk

Posts: 120; Member since: Nov 10, 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.

12. echenze

Posts: 1; Member since: Mar 24, 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?

13. Muche

Posts: 17; Member since: Aug 22, 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

14. pierenyingi

Posts: 1; Member since: Mar 24, 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

15. TisaTsir

Posts: 70; Member since: Jan 06, 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.

16. kevinhope5

Posts: 53; Member since: Feb 06, 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.

17. TisaTsir

Posts: 70; Member since: Jan 06, 2014

it all started in Kenya

18. JennyMarley

Posts: 1; Member since: Sep 04, 2014

Mobile technology latest entries HTC built into them. Vehicles are known to be associated with a number of connection options serve as alternative ways of connecting HTC and others. Mobile beauty and glory of the attractive features of a person fall in love with all of these technologies are not extra-ordinary. Easy to use phones allow people to use any kind of purpose.

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