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Essentials
Technology
In Africa, consumers are bypassing the traditional banking system altogether, instead focusing on technology to make payments. M-Pesa, the cellphone-based money transfer and microfinancing service, has become the go-to service for millions of Kenyans.
money transfer and microfinancing
withdraw cash and make payments or
service, has become the go-to service
send money using their cellphones.
for millions of Kenyans. Anne Githinji, 27, a sales assistant at a fashion and clothing boutique in Nairobi,
partnership with Vodafone, a British
says she uses M-Pesa regularly. “I usually
telecommunications company, introduced
use it to purchase my phone airtime and
the system in Kenya in March 2007,
to pay my electricity bills,” she said.
and it has expanded rapidly. Registered
Githinji, who has been using the service
In Sweden, consumers are taking a
customers have a menu on their cellphone
since its inception in 2007, said she
giving them the ability to move money to
preferred M-Pesa to cash or other bank
other phone-based accounts.
transactions owing to its convenience. According to a study released
To withdraw actual currency, customers use a network of M-Pesa agents – 75,000
in January by the Kenya Bankers
of them, scattered across the country,
Association, as many as 60 per cent of
compared with about 1,300 banks in
Kenyans use cellphones to carry out
Kenya as of 2013. Once an M-Pesa agent
financial transactions, for example,
has verified a customer’s identity via the
paying utility bills and school fees. Only
cellphone number, the cash is dispensed.
three of every 10 Kenyans go to bank
renminbi for travel in mainland China.
Safaricom, the country’s largest cellphone service provider, in
Gillian Ndeti, a senior business
offices, while only eight per cent use
development officer for M-Pesa at
ATMs, the report said.
Safaricom, said more than 98 per cent of
The majority of M-Pesa customers have no bank accounts, but they
all mobile money transactions in Kenya were made through M-Pesa. n
different approach. Contactless payment cards are not in wide circulation. Instead, consumers are increasingly making electronic payments with their cellphones as banks, mobile phone providers and startups are offering competing applications to serve as the public’s primary digital wallet. WyWallet, which was started by the nation’s four largest mobile companies, has almost 1.2 million users, or about 20 per cent of the six million mobile phones in use in Sweden, said Jakob Soderbaum, the WyWallet chief executive. That’s impressive considering Sweden as a whole has about 9.6 million residents. “You use your phone everywhere,” Soderbaum said. “That’s the way to really change the habit and the way you’re making payments.” The culture and size of Sweden are driving factors in why consumers are rapidly moving to mobile payments, he said. In Africa, consumers are bypassing the traditional banking system altogether, instead focusing on technology to make payments. M-Pesa, the cellphone-based
Naomi Wanjiku, right, works with a customer at an M-Pesa booth, a Kenyan cellphonebased money transfer service that is changing the face of banking in East Africa. Portfolio