Connect with us

Hi, what are you looking for?


M-PESA is becoming a virtual bank

NAIROBI, July 25 – Sixteen months after its launch, Safaricom’s mobile phone money transfer service M-PESA, is already providing cut-throat competition to existing money transfer agencies.

Currently, there are over three million M-PESA users translating to 26 percent of Safaricom’s subscriber base, which is currently standing at 10 million.

According to Pauline Vaughan, the head of M-PESA, the service, which started on a rather slow uptake as few people were conversant with the technology, is becoming vital for people who need to make various payments other than just sending and receiving money for their personal use. Many were also jittery of how safe the service was.

She says though the service initially targeted the unbanked population, who are involved in numerous micro payments, M-PESA is now being used to transfer colossal sums of money even among the banked.

“M-PESA has closed some of the gaps that other money transfer services have not been able to fill in,” Vaughan says.

This has led to a decline in the ancient money transfer systems. She says there was a time when 58 percent of Kenyans used friends and family while 27 others used public service vehicles to transport or transfer money.

M-PESA’s growth value of money as at the end of the first quarter of the year stood at Sh110 million. Vaughan noted that the average transaction value stands at over Sh2, 400.

Vaughan who was speaking during the launch of the Growing Inclusive Markets Report: Creating value for all, Strategies for doing business with the poor, noted the service has become a mobile bank for many especially the un-bankable particularly in the rural and slum areas.

Vaughan noted that there are 3,000 appointed agents up from 300 which initially offered the service, a sign that M-PESA has been embraced by many Kenyans. 

Advertisement. Scroll to continue reading.

In the future, Vaughan says, M-PESA will be able to offer what the company refers to as cash-in cash-out services which include more person to person transactions, utilities, merchants and social payments, airtime top up and international money transfers.

Reports indicate that the company has for some time been conducting money transfer tests from an international perspective in an effort to tap the large amounts of money transferred to Kenya from the diaspora.

Statistics show that US $93 billion is sent by immigrants from overseas to Africa each year and M-Pesa hopes to tap into this transfer of funds.

Vaughan noted that the success of M-PESA in Kenya has seen the introduction of the same service in Tanzania under the name Vodafone-M-PESA as well as in Afghanistan where the service is known as M-paisa.

Other money transfer services available in the country include Posta Pay owned by Postal Corporation of Kenya, Western Union, Money Gram as well as Celtel’s Sokotele.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...