M-PESA Money-transfer System

Exhibition: Cities | October 11, 2011 by

Urban workers traditionally send money home to their families in rural villages by post, unreliable couriers, or by delivering it themselves, which can take days of travel and makes them vulnerable to robbery. Since 2007, when Kenya’s M-PESA was launched, recipients can receive money with a simple text message on their mobile phone. The ease, speed, and safety of this mobile money transfer have led to its unprecedented success—over two million users in the first year, growing to thirteen million over the following two and a half years.

The M-PESA (the M is for mobile, and pesa means “money” in Swahili) system includes a grassroots network of over 22,000 agent outlets throughout Kenya, where users exchange M-PESA money for cash. Kenya’s leading mobile-network operator, Safaricom, in partnership with Vodaphone, designed M-PESA so that people could use the SMS service installed on their SIM cards. M-PESA is flexible and works across platforms or operating systems. First, a mobile money account is created and linked to the user’s phone number. A simple menu allows the user to securely send money to any mobile phone subscriber in Kenya, who is added to an M-PESA account or by voucher if on another network. Using this code and the recipient’s phone number, an M-PESA agent will be able to verify the transaction and pay the correct cash amount.

This simple, person-to-person, mobile-payment method has evolved into a financial tool for both individuals and businesses. Over one million people now pay their monthly bills through the Pay Bill function, larger corporations have started paying their workers’ salaries through these accounts, and it has proved a safer option for informed traders dealing with cash. There are plans to expand the program to Tanzania, Afghanistan, India, Egypt, and South Africa.

Initiated by Safaricom, Vodafone, and Commercial Bank of Africa. Kenya, 2007–present



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