What is M-PESA?

M-PESA is a hugely successful mobile banking, payments and money transfer service, first launched in Kenya at the beginning of 2007; so successful has M-PESA been in fact, that around 16 million people in Kenya alone – two-thirds of the adult population – have signed up to use the service. It is estimated that the value of transactions processed through M-PESA account for somewhere between 25% and 50% of Kenya’s GDP.

Mobile payment and money transfer is popular in Kenya for many reasons. Not only is it is seen as safer than carrying and using physical money in general, but it allows the unbanked access to a full range of secure financial services. It is estimated that around twice as many Kenyans use M-PESA for financial transactions as have bank accounts. Besides, many Kenyans do not fully trust the traditional banking system which is susceptible to political instability. Much of the money transfer activity involves money being transferred from workers in urban to family in rural areas. Smaller towns and villages may not have a bank but will have a local M-PESA agent, making mobile banking convenient and accessible, with only a small fee being paid for each transaction.

M-PESA, Carrefour (Kenya) and Ogloba

Although M-PESA has begun to expand, with Tanzania being a large and increasing market, progress outside Africa has so far, been slow. One reason is that in Africa, cashiers in most stores, including large multi-lane stores, are provided with a mobile phone instead of ECRs. This creates the perfect eco-system for millions of payments through peer-to-peer mobile communication. In the EU, the use of mobile phones instead of ECRs for in-store transactions is not acceptable, restricting the opportunity for M-PESA to grow.

However, facilitated by a development of Ogloba’s eWallet platform, Carrefour (Kenya) recently became the first retailer to fully integrate the M-PESA payments service with their cash registers, and thus adopt it as a payment channel across its stores. The service offered removes the need for manual verification at the checkout, making the payment process faster and more convenient. To pay, customers go to their M-PESA menu, select Buy Goods and Services, then enter the cash-register number and amount due. After verifying the payment with their unique M-PESA PIN number, customers immediately receive a receipt, the transaction having been securely processed.