M-Pesa: Kenya’s Bank For The Masses?

Given that most Kenyan’s don’t have a bank account, can the mobile phone based e-banking firm M-Pesa already claim the title as Kenya’s “Bank for the Masses?

By: Ringo Bones

To the uninitiated, M-Pesa is a money transfer service and it is how most Kenyan citizens send and receive money and pay their utility bills using the country’s established mobile phone or cellular phone network. Currently, there are 28,000 M-Pesa shops across Kenya and given that only a few Kenyans have bank accounts and yet almost all of them have mobile and cellular phones or have ready access to the internet, it is no wonder why M-Pesa, as a service provider, is a runaway success throughout Kenya.

M-Pesa is the brainchild of Safaricom and was launched 5 years ago and is made possible by the introduction of high-speed internet in Kenya. Despite its popularity, service interruption still occurs – even days at a time – because cable theft is still a big problem in Kenya that could shut down the local internet service for days. Despite of the disadvantages, Kenyans swear by M-Pesa because it is the securest form of on-line and mobile phone based money transfer they have so far. Competing systems have yet to gain a foothold in the country.

And by October 2012 – M-Pesa could become more secure when Kenya’s communications commission will start a comprehensive ban on counterfeit mobile phones to avoid fraud that could compromise the country’s famed mobile phone based money transfer service. Mobile phone users will then be required to enter their authentication code to make sure that they are a genuine M-Pesa client and not someone out to defraud money from legitimate users. Are taxis, buses and hotels in Nairobi already accepting fares via M-Pesa? Some prospective tourists already want to know.