Since its launch in 2007 by mobile-phone giant Vodafone and local partners, M-Pesa has taken East Africa by storm. Today more than 18 million users, most in Kenya and Tanzania, use the mobile-phone wallet to transfer billions of dollars a month. The technology has brought new financial options to places where banks and credit cards are scarce and cash has long been king, promising a faster, cheaper, more secure way to pay for things and send money.
The service enables cell-phone owners to essentially use their mobile device like a bank card. After registering as a user with an M-Pesa agent, a customer can upload money onto the phone. Those funds can then be used for many transactions, from grocery purchases to paying utility bills.
According to the Central Bank of Kenya, the value of M-Pesa transactions in Kenya jumped 30 percent, to $12 billion, in the first six months of 2014 compared with the same period in 2013. In Tanzania, a country half as populous, monthly M-Pesa transactions are valued at $820 million.
But despite this remarkable record, M-Pesa has found that moving the technology into a different market can be a challenge. Though the service is now available in 10 countries, more than 100,000 of M-Pesa’s 186,000 authorized agents worldwide are still in Kenya.
For clues to how M-Pesa can find broader acceptance, many are watching its 2014 relaunch in South Africa, where an initial introduction in 2010 fell far below expectations, signing up 100,000 users instead of the 10 million anticipated.
The 2010 version was a “carbon clone” of its Kenyan counterpart, not well suited to South African customers, says Herman Singh, the managing executive for mobile commerce at Vodacom, who is responsible for the South Africa relaunch. (Vodacom is 65 percent owned by Vodafone.) The rollout also suffered because there weren’t enough agents to help customers upload and download.
Now M-Pesa has simplified the registration process for agents and increased their numbers in South Africa from 800 to 8,000. Users can use their mobile wallet at all retailers. And there is now a voucher system similar to the prepaid mobile-phone credit system most South Africans use to pay for cell time.
Vodacom is betting that M-Pesa’s low cost will win over consumers. There are no monthly account fees, and most services, like cash deposits and electronic transfers from bank accounts, are free of charge.
Early results are encouraging. In the first four months following the relaunch, the number of users grew from 100,000 to 650,000, and more transactions have been processed than in M-Pesa’s first four years in the country combined, Singh says.
A Roomba recorded a woman on the toilet. How did screenshots end up on Facebook?
Robot vacuum companies say your images are safe, but a sprawling global supply chain for data from our devices creates risk.
A startup says it’s begun releasing particles into the atmosphere, in an effort to tweak the climate
Make Sunsets is already attempting to earn revenue for geoengineering, a move likely to provoke widespread criticism.
10 Breakthrough Technologies 2023
These exclusive satellite images show that Saudi Arabia’s sci-fi megacity is well underway
Weirdly, any recent work on The Line doesn’t show up on Google Maps. But we got the images anyway.
Get the latest updates from
MIT Technology Review
Discover special offers, top stories, upcoming events, and more.