M-PESA
M-PESA is a mobile payments system based on a system of low-value accounts held by a mobile operator and accessible from their subscribers’ mobile phones through a SIM card-resident application. The conversion of cash into electronic value (and vice versa) is performed at a network of retail stores (often referred to as agents) which are paid for by exchanging these two forms of liquidity on behalf of customers. All transactions are authorized and recorded in real time using secure SMS. In 2009, GSMA made a grant to Safaricom to help support the development of a social transfer payment project via M-PESA.
M-PESA was developed by Vodafone and first deployed by its affiliate Safaricom in Kenya, where the uptake has been very high since its launch in April 2007, surpassing 14 million customers by March 2011.
In this section we highlight articles, blog posts and other resources that you might find useful when researching this topic.
- WHAT IS M-PESA?
Designing Mobile Money Transfer Services: Lessons from M-PESA
Author : GSMA
Presents ten key service design features that have facilitated the rapid adoption and active use of M-Pesa in Kenya. These relate to branding and messaging, ease of use, consistency of customer experience, agent monitoring, instantaneous customer registration, free deposits, ability to send money to non-registered customers, and agent channel growth.
This CGAP video explains In 3.5 minutes how M-PESA reached 13 million Kenyans in 3 years.
- WHAT MADE M-PESA SUCCESSFUL?
Three Keys to M-PESA’s Success: Branding, Channel Management and Pricing
Author : Ignacio Mas and Amolo Ng’weno, The Bill & Melinda Gates Foundation
Examines how M-Pesa in Kenya achieved critical mass, thereby defeating the problems of trust, network effects and customer- agent interdependencies that affect all new payment systems. It complements the earlier paper in Innovations by focusing more narrowly on branding, channel management and pricing.
Seeking Fertile Grounds For Mobile Money
Author : Ignacio Mas, The Bill & Melinda Gates Foundation and Amrik Hayer
The apparent difficulty of replicating M-Pesa’s success even in neighboring countries suggests that some contexts may be more receptive to such an innovation than others. In this paper they seek to understand the environmental dynamics affecting the uptake of mobile money
What makes a Successful Mobile Money Implementation? Learnings from M-PESA in Kenya and Tanzania
Author : Emil Sjöblom and Gunnar Camner,Valuable Bits and Caroline Pulver, FSD Kenya
3.HOW IS M-PESA REGULATED?
Regulating New Banking Models that Can Bring Financial Services to All
Author : Claire Alexandre, Ignacio Mas and Dan Radcliffe. The Bill & Melinda Gates Foundation
Technology, and in particular the spread of real-time communications networks, permits banks to delegate ‘last mile’ cash management and customer servicing functions to third-party retail outlets. By making basic deposit, withdrawal, and payment functions available securely through retail shops that exist in every village and neighbourhood, there is an opportunity to dramatically increase the physical footprint of banks and to transform the basic economics of low-balance savings. Banking regulations need to be adapted to these new possibilities of banking beyond bank branches
- WHAT HAS BEEN THE IMPACT OF M-PESA?
Mobile Money: The Economics of M-PESA
Author : William Jack, Georgetown University and Tavneet Suri, MITDate : 2009
Documents the sequencing of adoption across households according to income and wealth, location, gender, and other socio‐economic characteristics, as well as the purposes for which the technology is used, including saving, sending and receiving remittances, and direct purchases of goods and services.
Community Level Economic Effects of M-PESA in Kenya: Initial Findings
Author : Megan Plyler, Sherri Haas, and Geetha Nagarajan. FSADate : 2010
The findings from the first stage of the study indicate that M-PESA affects the economic outcomes of community members, both users and non-users of M-PESA, through direct and externality effects, and identify 11 economic effects within the broad categories of local economic expansion, security, capital accumulation and business environment after 2.5 years of M-PESA’s use in these communities.
Author : William Jack, Georgetown University and Tavneet Suri, MIT
Date : 2010
Date : 2010
Notes From The Field: The Emerging Effects of M-Pesa’s Rural Outreach at the Household Level
Author : Michael Ferguson, Microfinance OpportunitiesDate : 2010
Until now, M-PESA’s service has been reserved mostly for Kenya’s cities and towns, with rural populations incurring the costs of travel from village to town/city in order to deposit or withdraw money. Now, with Safaricom committing to more direct rural outreach, that situation may change. Michael Ferguson provides an early look at the implications of this trend in his Notes from the Field.
5. OTHER RESOURCES
Safaricom M-PESA Resource Centre
Date : 2011
Safaricom’s site with links to press releases, presentations and adverts related to M-PESA.
