22 Facts About M-Pesa

M-Pesa is a mobile phone-based money transfer service, payments and micro-financing service, launched in 2007 by Vodafone and Safaricom, the largest mobile network operator in Kenya.

M-Pesa allows users to deposit, withdraw, transfer money, pay for goods and services, access credit and savings, all with a mobile device.

M-Pesa is a branchless banking service; M-Pesa customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking agents.

M-Pesa spread quickly, and by 2010 had become the most successful mobile-phone-based financial service in the developing world.

In discussion with other parties, M-Pesa was re-focused and launched with a different value proposition: sending remittances home across the country and making payments.

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M-Pesa is operated by Safaricom and Vodacom, mobile network operators not classed as deposit-taking institutions, such as a bank.

However, these findings on the role of M-Pesa in reducing poverty have been contested in a 2019 paper, arguing that "Suri and Jack's work contains so many serious errors, omissions, logical inconsistencies and flawed methodologies that it is actually correct to say that they have helped to catalyse into existence a largely false narrative surrounding the power of the fin-tech industry to advance the cause of poverty reduction and sustainable development in Africa".

M-Pesa was first launched by the Kenyan mobile network operator Safaricom, where Vodafone is technically a minority shareholder, in March 2007.

M-Pesa quickly captured a significant market share for cash transfers, and grew to 17 million subscribers by December 2011 in Kenya alone.

M-Pesa was launched in Tanzania by Vodacom in 2008 but its initial ability to attract customers fell short of expectations.

M-Pesa has been slow to gain a toehold in the South African market compared to Vodacom's projections that it would sign up 10 million users in the following three years.

M-Pesa was launched in India as a close partnership with ICICI bank in November 2011.

M-Pesa was shut down from 15 July 2019 due to regulatory curbs and stress in the sector, with Vodafone surrendering their PPI licence on 1 October 2019.

In March 2014, M-Pesa expanded into Romania, while mentioning that it may continue to expand elsewhere into Eastern Europe, as a number of individuals there possess mobile phones but do not possess traditional bank accounts.

M-Pesa expanded into Mozambique, Lesotho, and Egypt in May, June, and July 2013, respectively.

M-Pesa sought to engage Kenyan regulators and keep them updated on the development process.

M-Pesa reached out to international regulators, such as the UK's Financial Conduct Authority and the payment card industry to understand how best to protect client information and adhere to internationally recognized best practices.

M-Pesa obtained a "special" license from regulators, despite concerns by regulators about non-branch banking adding to the current state of financial instability.

Safaricom released the new M-Pesa platform dubbed M-Pesa G2 to offer versatile integration capabilities for development partners.

Near-monopolistic providers of the M-Pesa service are sometimes criticized for the high cost that the service imposes on its often poor users.

M-Pesa wrote that credit to business did not improve due to M-Pesa and that credit to the agricultural sector even declined.

M-Pesa concluded in his otherwise very friendly survey that the financial sector benefitted handsomely from the expansion of M-Pesa, while the living conditions of the people were not noticeably improved.