M-Pesa to cover globe with new transfer service
Kenya’s biggest telecommunications operator, Safaricom, unveiled a new service on its MPesa mobile financial services platform on Tuesday allowing users to send money around the world in a partnership with Western Union.
Started 11 years ago as a basic service to transfer money via mobile phones for Kenyans without access to the formal banking network, M-Pesa has evolved into a fully fledged financial service, offering loans and savings in conjunction with local banks, as well as merchant payments services.
It has also powered Safaricom’s earnings growth in recent years, with revenue from the service growing 18% in the half year to the end of September to 35.52-billion shillings ($349.4m), nearly a third of the total.
The new service will allow M-Pesa’s 21-million active users to send and receive money across the world using their mobile phones, which will be connected to Western Union’s half-a-million agents.
“M-Pesa Global seeks to connect Kenyans to opportunities by making it easy and seamless for them to transact with the world and for the world to transact with Kenyans,” said Sitoyo Lopokoiyit, chief financial services officer at Safaricom.
Western Union Global Money Transfer president Odilon Almeida said the integration of the two platforms will allow users to send and receive money to and from more than 200 countries and territories. “It will become a model for opening a world of global connectivity and economic opportunity for emerging as well as developed economies,” Almeida said.
Eric Musau, an analyst who covers Safaricom at Standard Investment Bank, said M-Pesa Global would help the company get a share of the funds sent home by Kenyans living abroad, which have been averaging $200m a month in the past few months. “It will help them tap into an existing market, which is a significant market so this is a positive,” Musau said.
Users will be able to send money to bank accounts in the UAE, Germany and Britain immediately, with more countries being added in the coming weeks, Safaricom said.
Although Safaricom, part owned by Vodacom and Vodafone, has 30-million subscribers and a commanding lead among Kenya’s three operators in other services such as voice calls, short messages and data, it sees M-Pesa as offering a real competitive advantage due to its reach and experience.
Users of M-Pesa will be able to access an overdraft facility on their accounts next week to enable them to pay for goods and services and repay later, Safaricom said last week.