Innovation Payments Strategy & Systems

A country once where 90% of transactions done in cash. Kenya appears to have the economic edge over its African rivals, Nigeria, South Africa, and Ethiopia.

M-Pesa, a mobile money transfer service launched in Kenya in 2007 by telecommunications company Safaricom allowed people to send money via mobile messaging such as friends or family, and even to pay for goods and services. The system is simple in concept. In practice this means that carrying out business becomes much easier, contributing to increased productivity.

During the 2008 post-election violence people began to see M-Pesa as a safer place to store their money than mainstream banks. Its service funded by a small commission per transaction allows users to deposit, withdraw, transfer money to other users and non-users. Pay bills, purchase airtime and in some markets, transfer money between the service and a bank account. Mobile money of this kind has begun to diffuse to countries like Tanzania, India, and Afghanistan. Setting up a mobile phone network running M-Pesa becomes possible to distribute and control flows of cash such that affected people. There are significantly more M-Pesa outlets than ATMs and traditional banking system.