The Rise and Rise of M-Pesa

M-PESA started out as a big experiment, an idea that people would trust a digital currency over physical tin coins. Well, M-PESA turned out to be even larger than that. It went far beyond just Kenya and Tanzania. The idea went on to be implemented across Africa and parts of Eastern Europe. The M-Pesa platform grew from just 11 agents in 2005, and currently has millions of agents across the world. Since Kenya, Safaricom has rolled out M-Pesa in Tanzania and South Sudan.

The success of M-Pesa paved the way for mobile banking and microfinancing in these countries, ultimately improving the quality of life for those who had access to this technology.

Why M-Pesa is So Successful in Kenya

M-Pesa has been a huge success in Kenya, and it’s easy to see why.

First of all, M-Pesa was created by Safaricom, one of Kenya’s biggest telecommunications companies. The company already had millions of customers who were using its mobile phone services, so they had an existing customer base that was ready to try out this new product.

Second, there were no other options for sending money electronically at the time—no other mobile payment service, no PayPal or Venmo or anything like that. So M-Pesa was filling a real need for Kenyans who needed to send money quickly without having to go through banks or other institutions that would charge them fees for the privilege.

Thirdly, the fact that M-Pesa is run by a private company means that it can make decisions quickly and adapt easily if necessary—something that would be harder if it were run by government officials or some other institution where change takes longer (and where corruption might also be more common).

If you walk within a radius of 300 meters in a busy public space you will not miss an Mpesa shop. The Mpesa business has dominated the financial market in Kenya but its success stories has proven that Mpesa even a more viable to a common Mwananchi.
Both small and medium traders have adapted the use of Mpesa as the best payment solution when dealing with their clients. The use of Mpesa till has made it easy for individuals to send money and transact in a fraction of a second.
Bigger institutions have not been left behind. You walk into any bank in Kenya and you will find Mpesa services. Banks have made it possible for individuals to send and withdraw money from their accounts via Mpesa.
The ever increasing digital market in Kenya has continued to give Mpesa a fair share in almost all sectors. The growth of betting companies has thrived leveraging on Mpesa and on the other hand Mpesa has continued to cement its dominance in mobile money transactions sector.
A recent report by the Communications Authority of Kenya revealed that M-Pesa commands an incredible 98.9% of the mobile money market share in Kenya, leaving the remaining 1.2% to the likes of Airtel Money and Telkom T-Kash.

Why Mpesa continues to thrive

But at the centre of its growth and dominance are Mpesa sub agents that makes it possible for Mpesa clients to deposit and withdraw funds from anywhere.
As at June 2020, there were 223,184 mobile money agents in the country, most of whom work for Safaricom and M-Pesa. An M-Pesa outlet helps people register new M-Pesa accounts, deposit and withdraw cash, and process many other transactions.
The M-Pesa business has become hugely popular because of the ease with which it is set up, and the high profitability of the venture. Relatively to some other business, M-Pesa requires little capital, and generates very high profits.
Almost all services in companies and government institutions have Mpesa payment option as the first priority payment option. Making payments for bills such as water bills, Electricity bills and payment of school fees has been made possible by the use of Mpesa.
Also Read:Sportpesa  put on hold by the Government shortly after making a comeback
Mpesa has largely created employment for many both directly and indirectly.
While Safaricom telecommunication company which runs Mpesa services has employed quite a number of people. The number of people who have gained employment indirectly is far much bigger that those employed directly by Safaricom.
Business people have grabbed the opportunity for indirect employment through offering Mpesa agent services across the country and beyond.
Sales of safaricom and Mpesa products such as smartphones airtime and SIM cards have also propelled many to greater heights.
With adoption of digital solutions in the recent days being on the rise, it is no secret that Mpesa will continue to thrive.