By Mohammed Waseem
Kenya in an African nation which has this innovative money transfer service done through mobile phones and is used by approximately 15 million users.
The primary mobile phone operator of Kenya, Safaricom reports that 80% of its customers use M-Pesa. Safaricom controls over 75% of mobile phone market in Kenya. Most of the Kenyans had no bank accounts which urged the innovators to come up with a service that requires no bank accounts for money transfer.
This service is called M-Pesa, which literally means “mobile money” (Swahili). This service was launched to cater to Kenyans having no access to banks and to address their need to send money to other parts of the country, which previously happened by the person traveling to hand over the money or by sending it through a trusted bus driver.
I will talk about the local money transfer elsewhere; in this article, I will focus on international money transfer services using M-Pesa network.
Like any other pioneer in the world, even M-Pesa was chosen to act as a mediator by many money transfer services such as Western Union, MoneyGram and World Remit for transferring money from around 40 countries to Kenya. Of course, they charge a transfer fee like any other international money transfer, but the difference is that this money is sent directly to a mobile phone on Safaricom’s network (Mobile Wallet). The recipient can use this money to make purchases, pay bills and almost everything one does with hard cash, across Kenya.
The subscriber just receives an SMS – which takes normal SMS delivery time – that, funds have been received and are ready for use. If the recipient is not connected to M-Pesa but is on Safaricom’s network, they receive an invitation to connect on M-Pesa within 21 days, after which, money can be used. If they choose not to, or if 21 days elapse, then they would have to visit a Western Union agent and follow normal procedure to collect the money. If one is on a network other than Safaricom, money can be collected from an M-Pesa agent within 7 days.
Not only this, M-Pesa also supports money transfer abroad, from Kenya. For this, they have tied up with Bitcoin which charges them a nominal fee or no fee at all for the transfer. The service is called Kipochi, which means “purse” in Swahili. This service requires internet access and can’t be accessed on a non-web-enabled phone at present. Smartphones using operating systems such as Android, iOS, etc. have an application which can be downloaded to the phones and used.
Many companies in different parts of the world are beginning to adopt the idea of M-Pesa. Let’s see when the entire world will be in a position to transfer funds using their cell phones to any corner of the world.