The M-PESA service lets users send money to other people from their mobile phone
In the last five years, Africa has had the fastest telecoms growth in the world.
Eight years ago, when your phone buzzed you knew it was probably a text message. But then Kenyans started sending money to each other on their mobile phones – and everything changed. This mobile money revolution, brought about largely by a popular money transfer system called M-PESA, wowed other African countries and economies around the world.
In the last five years, Africa has had the fastest telecoms growth in the world. A chunk of that growth has been in Kenya, where roughly 80% of the population subscribe to a mobile service.
“People will often sacrifice on the quality and the quantity of the food they eat, but will not sacrifice on how much they spend on the mobile phone,” says Bob Collymore , the CEO of Kenya’s largest telecoms company Safaricom which launched M-PESA in 2007. “It’s an essential part of their daily lives.”
Nowhere is mobile money more effective than in the “micro economy” or what Kenyans call the kidogo economy – it’s people buying things one cigarette at a time.
Keeping costs small has attracted 21 million subscribers who make a million transactions a day, says Safaricom. And the overwhelming majority of that business happens in East Africa. It’s because of the geography of mobile money that M-PESA has moved its servers from Germany to Kenya, resulting in transaction times plummeting to just three seconds.
And as more Kenyans get online, more services are going mobile.
“Today in Kenya, you can check your account with the national social security fund very easily from the comfort of your house,” says Fred Matiangi, Kenya’s ICT cabinet secretary. “That M-Revolution as it were is the focal point around which innovation has grown in our country and continues to thrive.”
But Safaricom is showing no signs of slowing down. Indeed the company says it is investing $315 million into building new features.
“Government is invested heavily in building the infrastructure and working with private sector players to ensure that we support digital broadcasting,” says Matiangi. “Players like Safaricom have a whole world of opportunity to invest in digital broadcasting.”