ABSTRACT
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. In May 2008, 14 months after the launch, M-PESA in Kenya had 2.7 million users and almost 3,000 agents. M-PESA uses a branchless banking model (Ivatury and Mas 2008) to enable the service to reach previously unserved communities. Today, over seven years since its launch, M-PESA has gained 20 million registered customers and has 10,000 agents spread across the country. This exceeds the reach of any other financial service in Kenya. Finacces 2009 showed that M-PESA has become the most popular method of money transfer in Kenya with 40% of all adults using the service. The same Kenyan survey also shows a dramatic increase in national remittances; from 17% in 2006 to 52% in 2009, which may be attributed to the ease of money transfer through ubiquitous M-PESA agents. Many mobile network operators have been eager to repeat M-PESA’s success in Kenya, but the formula for this success is not yet clear. One year after the Kenyan launch, Vodacom launched M-PESA in April 2008 in Tanzania. The user uptake of the service in Tanzania has been much slower compared to its northern neighbor. In June 2009, 14 months after the launch, M-PESA in Tanzania had 280,000 users and 1,000 agents (Rasmussen 2009).M-Pesa is a branchless banking service, meaning that it is designed to enable users to complete basic banking transactions without visiting a bank branch. The continuing success of M-Pesa in Kenya has been due to the creation of a highly popular, affordable payment service with only limited involvement of a bank.M-Pesa customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking agents. M-Pesa is operated by Safaricom, a mobile network operator (MNO), which is not classed as a deposit-taking institution (such as a bank).The service enables its users to:
• Deposit and withdraw money
• Transfer money to other users and non-users
• Pay bills
• Purchase airtime
• Transfer money between the service and a bank account (in some markets)
• Pay salaries
• Banking services (many banks have partnered with mpesa)
• Purchases
• Insurance