Mobile Payments Go Viral: M‐PESA in Kenya

Posted by MohiniBhavsar on Sep 02, 2010
Mobile Payments Go Viral: M‐PESA in Kenya data sheet 1825 Views
Ignacio Mas and Dan Radcliffe
Publication Date: 
Mar 2010
Publication Type: 
Report/White paper

M‐PESA is a small‐value electronic payment and store of value system that is accessible from ordinary mobile phones. It has seen exceptional growth since its introduction by mobile phone operator Safaricom in Kenya in March 2007: it has already been adopted by 9 million customers (corresponding to 40% of Kenya’s adult population) and processes more transactions domestically than Western Union does globally. M‐PESA’s market success can be interpreted as the interplay of three sets of factors: (i) pre‐existing country conditions that made Kenya a conducive environment for a successful mobile money deployment; (ii) a clever service design that facilitated rapid adoption and early capturing of network effects; and (iii) a business execution strategy that helped M‐PESA rapidly reach a critical mass of customers, thereby avoiding the adverse chicken‐and‐egg (two‐sided market) problems that afflict new payment systems.

What is the M-PESA of Mobile Health?

Posted by dsasaki on Jul 30, 2008

Mobile banking has been touted as such a wild success story for one simple reason: mobile phones have penetrated the market in rural areas of developing countries in the last five years more successfully than traditional banks have been able to over the past 100 years. You can travel to any remote village just about anywhere in Sub-Saharan Africa and it is rare that you will find a bank; far rarer that you will find an ATM. (I remember waiting three and a half hours to use an ATM once in Namibia.) But you are guaranteed to hear ringtones.

Once banks realized that basic financial transactions (deposit, withdrawal, payment, check balance) can all be done over a mobile phone, they understood that the banking services they offer can finally reach customers in places where just a few years earlier they had never dreamed of doing business.