Jul 6, 2012

M-PESA enhancing,not replacing banks


Safaricom has been battling  for low income earners with the commercial banks in Kenya since the launch of M-PESA in 2007. The aggressive expansion of M-PESA forced banks to eliminate charges on their customers when transferring cash.  Banks tried to block M-PESA. An investigation by Central Bank of Kenya showed that Kenyans were not using M-PESA as an alternative bank account.

Banks have been slow to leverage M-PESA but recently they have intensified their efforts .Many banks have made it possible for their customers to access their banks wherever they in Kenya via M-PESA. Kenya Commercial Bank (KCB) is particularly pushing their mobile banking product aggressively. As Moses Kemibaro notes on his blog, KCB mobile banking product could be a game changer.

Card-less transactions at an ATM have been happening in Kenya for the past five years. Kenya became the first country in the world where card-less transactions at an ATM became available for users of mobile money. In 2008 Safaricom partnered with Pesa Point, a third party ATM network provider in Kenya,to enable M-PESA users to withdraw cash from Pesa Point ATM machines.

Many people here in Kenya, and else where, thought in the early days of M-PESA, that branches and ATMs would eventually go away. But over time we have learned that M-PESA is just another banking channel, and like ATMs and online banking, it simply adds a new layer without supplanting the other channels.

 M-PESA is not replacing banks but enhancing their operations.M-PESA has made banking available, affordable and accessible.In my opinion, bank branches and ATMs will be around for a long time to come.

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