More and more companies operating in Kenya are allowing their customers to pay for products and services using the M-Pesa mobile money platform.
Last week airline Virgin Atlantic, owned by Richard Branson’s Virgin Group (51%) and Singapore Airlines (49%), announced that its passengers can now pay for tickets using the popular M-Pesa service. Passengers will be allowed to transfer up to Ksh.140,000 (US$1,537) from one phone number per day. Virgin Atlantic offers flights between London and Nairobi.
“With the launch of the M-Pesa service, we are determined in ensuring that customers pay for their air tickets conveniently and efficiently via their mobile phone,” commented David Rose, Virgin Atlantic country manager for Kenya.
Over 600 companies and organisations in Kenya currently accept bill payments through M-Pesa. Earlier in the year, Deacons, one of east Africa’s largest clothing and household goods retailers with brands such as Woolworths and Mr Price, also announced that customers will be able to pay via M-Pesa. Similar agreements were also signed with supermarkets Uchumi and Naivas.
M-Pesa, which was launched by mobile operator Safaricom in 2007, had over 14 million customers in April 2011. The service does not require users to have a bank account; an important aspect in Kenya, where millions of people do not operate bank accounts. Account holders can buy electronic funds at an M-Pesa agent and send the electronic value to any other mobile phone user in the country, who can then redeem it for conventional cash at any M-Pesa agent. In April this year, there were over 27,000 agent outlets.
In 2010 M-Pesa users transferred an estimated $7 billion, equivalent to 20% of Kenya’s national gross domestic product (GDP).
“Perhaps most demonstratively, M-Pesa’s success has spawned over 60 similar programmes across the globe. Some are already showing signs of comparative success. For instance, since launching mobile money services in partnership with Stanbic Bank in Uganda, MTN has already amassed over 3,000 mobile banking agents across the country. By the end of August 2010, MTN had 1.2 million mobile money subscribers, transferring a monthly average of $60 million, 60% of which was sent from urban to rural areas. In 2010, the Bank of Uganda recorded $400 million worth of mobile money transfers, with registered mobile money customers quadrupling from 552,000 in 2009 to around 2 million by the end of 2010,” said Standard Bank analyst Simon Freemantle in a recent research report.
“From a virtually non-existent base five years ago, it is estimated that there will be upwards of 350 million users of mobile money transfer services in Africa in 2015. Mobile money offers a swifter, safer and more cost effective means to transfer money, and has been revolutionary in the manner in which it has extended financial services to the informal economy,” he added.