[Dave Birch] M-PESA, one of our favourite payment systems, is going from strength to strength and now has an international dimension.

Kenyans can now receive remittances from family and friends in the United Kingdom via their mobile phones through a service called M-PESA. This follows a successful pilot project with selected outlets in the UK over the last three months.

[From AfricaNews – Kenya: Forex remittances via mobile phones – Articles]

It’s amazing how the scheme has developed since we were first asked by Vodafone to help with a feasibility study on a money transfer scheme for microfinance loans and remittances. Just take a look at the current figures below, assembled with the help of Forum friend Igancio Mas from the Gates Foundation.

The following figures are taken from Safaricom’s published half-year results for the period ending September 2009 and Central Bank of Kenya reports. Note in particular that Safaricom are making a profit from M-PESA:

  • 8.3 million registered customers, of which the majority are deemed to be active. This corresponds to a penetration of 57% in Safaricom’s customer base and 21% of the entire population or 40% of adults.[
  • 14,000 retail stores at which M-PESA users can cash in and cash out.
  • USD 300 million per month in person-to-person (P2P) transfers. On an annualized basis, this is equal to roughly 10% of Kenyan gross domestic product (GDP). Although transactions per customer have been on a rising trend, they remain quite low, between 1-2 transactions per month.
  • USD 650 million per month in cash deposits and withdrawal transactions at M-PESA stores. The average transaction size is around USD 33, but Vodafone notes that half the transactions are for a value of less than USD 10.
  • In the 2009 FinAccess survey, one quarter of M-PESA users reported using their phones for storing money. The average balance reported in following a government audit of M-PESA in August 2009 revealed that the average balance on M-PESA accounts was only $3.
  • USD 7 million in monthly revenue (based on the six months to September 2009). This is equal to 8% of Safaricom revenues.
  • 19% of Safaricom airtime purchases are conducted through M-PESA.
  • There are 27 companies using M-PESA for bulk distribution of payments. Safaricom itself used it to distribute dividends on Safaricom stock to 180,000 individual shareholders who opted to receive their dividends into their M-PESA accounts, out of a total of 700,000 shareholders.
  • Since the launch of the bill pay function in March 2009, there are 75 companies using M-PESA to collect payments from their customers. The biggest user is the electric utility company, which now has roughly 20% of their one million customers paying through M-PESA.

As these figures show, the growth of M-PESA is astonishing. But it’s also important to see how the usage trends and customers’ revealed preferences indicate the potential for other new services that can be developed on the platform. Incidentally…

While M-PESA moves an estimated Sh500 million within its system per day, this figure pales against Sh60 billion that commercial banks move between themselves in a day.

[From The Standard | Online Edition :: Why Central Bank position on mobile banking attracts wrath]

It always helps to have some context, doesn’t it! Although M-PESA is an incredible success at the retail level, it handles less than 1% of interbank funds transfers (so there’s plenty of room for growth!).

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public
[posted with ecto]

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