M-PESA, why it works

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Nice commentary from Ryan Hahn on Nick Hughes’ (head of Vodafone‘s international mobile payment solutions) talk at CGAP regarding the success of M-PESA, a mobile banking solution

Why it works;

  1. They focused entirely on offering a single service, and doing it well; transferring money between 2 people using a mobile phone.
  2. M-PESA is simple and easy to use and to set up. All a person needs is a Safaricom SIM and National ID/Passport.
  3. No bank account is needed, which immediately allows a large percentage of Kenyans to avoid the difficulty and complexity of using a bank.
  4. Overcoming this hurdle has led to increased user acceptance; over 4 million subscribers.
  5. M-PESA makes its money by charging commissions on money transfers rather than on investing money. Alternative business model.
  6. Vodafone is looking to replicate that success in other markets. Scalable.
  7. Research done by Olga Morawczynski shows that migrant workers are the early adopters who influence other people to use the service.
  8. The value? Time and money is saved by people having to travel long distances to the nearest bank.
  9. 3,500 frontline agents countrywide means even rural communities are benefiting economically.

M-PESA  delivers a simple valuable service using available resources that is understood and accepted.

I know M-PESA has been around for a while, but successful case studies are proven over time.

Posted by email from Design in Africa (posterous)

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3 Responses to “M-PESA, why it works”

  1. Noxolo Says:

    This is similar to what Shoprite does in South Africa, it is a good idea and a new way of “banking”

  2. m.jallow Says:

    can m-pesa be introduce to other african contries especially west africa
    i understand w.union is using ini in nigeria what about other countries.

  3. Kruno Says:

    Security issues?

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