M-PESA (translated as mobile money) is a payment system that allows you to use a mobile phone to manage finances
How does M-Pesa work?
In 2007, Kenya had 740 bank branches throughout the country (10 times less than today). Bank accounts were not common - only 19% of the population used accounts. For the rest of the people, this service was too expensive or not available at all. People had to transport large amounts of cash or risk transferring them through intermediaries (such as bus drivers).
The solution to the problem was found by the local mobile operator Safaricom (a subsidiary of the British Vodafone). Considering that 50% of Kenyans by that time already used mobile phones (and therefore kept their money on the balance sheet), it was decided to use this infrastructure to develop financial services. As part of the Mobile Finance special project, PaySpace Magazine will tell you how M-PESA works today.
M-PESA is not just money on your mobile account
Explaining what the essence of the service is, it is often simplified to settlements from the balance of a mobile account. But things are a little more complicated. The client cannot simply top up the account and, instead of spending money on calls and SMS, start using them to make payments.
He needs to open and put money into a special account by contacting an M-PESA agent. The client transfers cash to him, and the agent transfers the required amount from his mobile wallet minus the commission.
Payments in M-PESA are not anonymous - you need to present your passport to register an account. And the account itself is protected by a PIN.
In addition, not all Safaricom SIM cards support mobile payments. To use the service, you need to purchase a chip with a pre-installed M-PESA menu.
Not only residents of Kenya can pay with M-PESA - tourists also open an account in this system, even if they come to the country for a couple of days. You only need to buy a Safaricom SIM card. They are sold everywhere from the airport to the hotel lobby. The cost of the card ranges from 50 cents to 2 dollars. Maximum - $ 5 at airports. Registration and replenishment of the card will take no more than 10 minutes.
M-Pesa Agent Point
Cash top-up
M-Pesa compatible SIM card
How M-PESA Works: Features Not Everyone Knows About
Today M-PESA is no longer only a money transfer service on push-button telephones. Over the 11 years of its existence on the market, the solution has become a universal tool for managing funds, up to the launch of contactless cards. How M-Pesa has changed - shown in the infographic.
We propose to consider unusual formats for using mobile money:
In which countries is the service presented?
M-PESA is represented in 10 countries under different brands. The service is most actively used in Kenya (19.3 million people) and neighboring Tanzania, Congo, Lesotho and Mozambique (13.9 million). In addition, there are similar solutions that have been launched based on the expertise of Vodafone (for example, M-Paisa in Afghanistan) or simply other mobile operators.
Attempts to launch
In August 2015, Vodafone received a patent for registration of the M-PESA trademark. Then they were just expecting the rebranding of the mobile operator MTS. However, even after Vodafone replaced MTS, the patent was not useful - mobile money under the M-Pesa brand was not launched.
Despite the fact that 37% still do not have access to bank accounts, there is no certainty that payments from a SIM card account will help solve this problem.
This partly confirms the experience of Kyivstar, which five years ago launched a mobile money service for online payments, which has not yet become widespread.
How does M-Pesa work?
In 2007, Kenya had 740 bank branches throughout the country (10 times less than today). Bank accounts were not common - only 19% of the population used accounts. For the rest of the people, this service was too expensive or not available at all. People had to transport large amounts of cash or risk transferring them through intermediaries (such as bus drivers).
The solution to the problem was found by the local mobile operator Safaricom (a subsidiary of the British Vodafone). Considering that 50% of Kenyans by that time already used mobile phones (and therefore kept their money on the balance sheet), it was decided to use this infrastructure to develop financial services. As part of the Mobile Finance special project, PaySpace Magazine will tell you how M-PESA works today.
M-PESA is not just money on your mobile account
Explaining what the essence of the service is, it is often simplified to settlements from the balance of a mobile account. But things are a little more complicated. The client cannot simply top up the account and, instead of spending money on calls and SMS, start using them to make payments.
He needs to open and put money into a special account by contacting an M-PESA agent. The client transfers cash to him, and the agent transfers the required amount from his mobile wallet minus the commission.
Payments in M-PESA are not anonymous - you need to present your passport to register an account. And the account itself is protected by a PIN.
In addition, not all Safaricom SIM cards support mobile payments. To use the service, you need to purchase a chip with a pre-installed M-PESA menu.
Not only residents of Kenya can pay with M-PESA - tourists also open an account in this system, even if they come to the country for a couple of days. You only need to buy a Safaricom SIM card. They are sold everywhere from the airport to the hotel lobby. The cost of the card ranges from 50 cents to 2 dollars. Maximum - $ 5 at airports. Registration and replenishment of the card will take no more than 10 minutes.
M-Pesa Agent Point
Cash top-up
M-Pesa compatible SIM card
How M-PESA Works: Features Not Everyone Knows About
Today M-PESA is no longer only a money transfer service on push-button telephones. Over the 11 years of its existence on the market, the solution has become a universal tool for managing funds, up to the launch of contactless cards. How M-Pesa has changed - shown in the infographic.
We propose to consider unusual formats for using mobile money:
- M-Shwari is a bank account that offers a combination of deposits and loans. The service was developed in collaboration with Commercial Bank of Africa and is available only to M-PESA customers. They can remotely open a bank account by running a few commands from their mobile phone. Then arrange a deposit at 2-5% or a loan at 7.5% per month. Such accounts are used by 4.5 million Kenyans.
"Your loan application will soon be reviewed" - Lipa na M-Pesa allows merchants to accept payments from buyers. Any M-PESA user can use the service. To do this, go to the M-PESA menu on your phone, enter the seller's number and follow the instructions. Merchants must, in turn, issue a special SIM card and assign a certain number (Till) to their outlet.
Supermarket Vendor Numbers - M-Tiba is a kind of health insurance. M-PESA account holders can deposit money into their M-Tiba account (or a relative's account) to be used to pay for medical services if needed.
- mySafaricom offers M-PESA services on modern smartphones. It simplifies payments thanks to a user-friendly interface.
MySafaricom Application Menu - M-Pesa 1tap is a contactless payment service. You can bind a card, NFC tag or bracelet to a mobile operator's account. And pay with them at outlets that accept M-PESA. The money will be withdrawn from the mobile account.
In which countries is the service presented?
M-PESA is represented in 10 countries under different brands. The service is most actively used in Kenya (19.3 million people) and neighboring Tanzania, Congo, Lesotho and Mozambique (13.9 million). In addition, there are similar solutions that have been launched based on the expertise of Vodafone (for example, M-Paisa in Afghanistan) or simply other mobile operators.
Attempts to launch
In August 2015, Vodafone received a patent for registration of the M-PESA trademark. Then they were just expecting the rebranding of the mobile operator MTS. However, even after Vodafone replaced MTS, the patent was not useful - mobile money under the M-Pesa brand was not launched.
Despite the fact that 37% still do not have access to bank accounts, there is no certainty that payments from a SIM card account will help solve this problem.
This partly confirms the experience of Kyivstar, which five years ago launched a mobile money service for online payments, which has not yet become widespread.
