Digital banking service M-Pesa, coined from two Swahili words for mobile money in which ‘M’ stands for mobile and ‘pesa’ stands for money is now undoubtedly the biggest Fintech platform in Africa.
M-Pesa is an incredibly popular and successful mobile phone-based payment service founded in 2007 by the Vodafone Group and Safaricom, the mobile network operators in Kenya.
The service allows mobile phone subscribers to deposit and withdraw money from a wide network of over million agents.
They can also pay for goods and services, access credit and savings accounts and make and receive international money transfers. The fees charged for the service are very small and that has helped millions in the developing world to move away from a cash-based society and to be able to manage their own financial affairs for a minimal cost. It has had a remarkable effect on individuals, businesses and national and regional economies.
Meanwhile, M-Pesa has spread and is now available in the Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Lesotho, Mozambique, South Africa and Tanzania. It was also available in Afghanistan but how long that might continue to be the case remains to be seen due to the recent happenings in the country.
By giving so many people access to official, structured and regulated banking and financial systems, M-Pesa’s digital ecosystem greatly reduced the incidence of muggings, robberies and violent crime that were a constant feature of daily existence when almost all transactions were conducted in cash.
Popularity of M-Pesa
M-Pesa’s popularity meant it very spread quickly. There were some 17 million active users in Kenya by 2012. In 2016, there were 7 million active users in Tanzania where the service was run by Vodacom. Now, the number of active M-Pesa customers has doubled in the past five years, a feat that was achieved just a year and a half following the launch of Safaricom’s and Vodacom’s ‘M-Pesa Africa’ joint venture.
Moreover, M-Pesa transaction volumes grew 44 per cent year-on-year between April and June, 2021, Vodacom’s current financial year. The number of M-Pesa transactions also hit 4.5 billion in the second quarter and total transaction value was 1 trillion rand (UK£50 billion plus).
Though, the figures are impressive, Vodacom Group CEO, Shameel Joosub, says M-Pesa is still taking “preliminary steps”. He also noted M-Pesa has been a financial lifeline for millions of people during the Covid-19 pandemic.
M-Pesa Changing Lives
In addition, Nick Read, CEO of the Vodafone Group, sated that upon all the achievements of M-Pesa, it is still in the early stage. He also expressed his commitment to changing lives.
“M-Pesa has helped millions of people to access financial services for the first time and millions more to improve their lives, start businesses and gain control of their finances. We are still in the early stages of M-Pesa’s development and will continue to invest to capture this significant opportunity – building value for shareholders.”
Nick Read
Meanwhile, three months ago, M-Pesa introduced its ‘Super App’ across all its markets. It is described as one of M-Pesa’s ‘key service innovations’ and comes in the form of an overarching service that enable subscribers to complete a wide variety of tasks. This range from shopping to accessing government services – without having to download different apps for each task.
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