Meanwhile, the latest figures from my favourite mobile payments scheme, M-PESA in Kenya, continue to amaze. Safaricom added 870,000 new mobile subscribers in the first quarter of the fiscal year to reach 11.1 million by the end of June (a considerable increase in the subscriber base since the introduction of M-PESA). M-PESA itself is still growing and the registered user base increased 50 percent over the quarter from 2 million at 31 March. New registrations continue to exceed an average of 10,000 per day and by the end of July the total registered user base exceeded 3.3 million. Total person-to-person transfers reached KES 6.88 billion in July (about $100 million), representing a growth rate of 220 percent over the March figure. The total value of all transactions during July exceeded KES 21 billion (about $300 million), and the average transaction per user has continued to increase over the last 6 month.
Wow. I guess that the increase in average transaction size has two obvious drivers. First of all, when people come to a new payment system they may initially be uncomfortable with committing large amounts of money to it. So they being by making small payments, but send large payments through existing systems that they know work, even if they are much more expensive (eg, interpersonal money transfer via physical offices. In time, their confidence grows and the larger payments move to the new system as well. The more important driver, though, might be the adoption of new systems by business. Just as PayPal “proved” itself to consumers sending each other the occasional few bucks and then they began to use it for person-to-business payments (through eBay as first), so mobile payments systems that have proved themselves easy, reliable and cost-effective for interpersonal payments (and microfinance payments in the M-PESA case) will soon be adopted by businesses. With more than three million M-PESA users out there, what Kenyan business wouldn’t want to accept mobile payments?