The new agreement will enable customers from 90 countries across the globe to send money directly to subscribers on the M-PESA network in Kenya.
Speaking during the partnership, MoneyGram CEO Pamela Patsley said the company – which has a presence in 52 African countries – decided to partner with a Kenyan firm to grow its services due to a vibrant and strong mobile money transfer sector in the country.
“Kenya’s mobile money transfer progress is a global phenomenon and a great success story; a story that we are proud to be part of. We want to be a part of even more stories like this and support economic development,” Patsley who is in the country for the first time, said.
To access the service, consumers can visit MoneyGram locations in the 90 countries or MoneyGram online to be able to send funds to an M-PESA customer in Kenya.
The customer will then receive an SMS immediately to confirm that the funds have arrived and ready for withdrawal at any agent in the country.
“Over the last eight years M-PESA has enabled nearly 70 percent of the adult population in Kenya to access financial services. This new relationship with MoneyGram enables us to tap into remittances coming in from Kenyans living in other countries,” Safaricom CEO Bob Collymore said.
Remittances from Kenyans abroad are now part of the top contributors to Kenya’s Gross Domestic Product, apart from sectors like tea, horticulture and tourism.
According to the Central Bank of Kenya (CBK), the annual inflows from Kenyans in the Diaspora officially recorded from banks’ returns rose from Sh30.2 billion in 2004 to Sh116 billion 2013.
“The Kenya government recognises the role and importance of remittance in boosting economic development. In this regard CBK has worked closely with stakeholders in mobile phone money transfer industry in implementing regulatory reforms aimed at guiding the market prosperity,” CBK Governor Professor Njuguna Ndung’u said.
He however emphasised the need for the private sector to come up with more simpler and cheaper products for international money transfer, to curb money laundering.
“The questions remains… how do we provide services for international money remittances at competitive costs?” Ndung’u challenged.
The partnership between Safaricom and MoneyGram comes a few months after the latter opened its East Africa regional office in Nairobi.