The Age of M-Pesa

[adz_6891]

Interesting take the mpesa back story. For those interested in the current state of the mobile money industry in Africa and other developing countries I can recommend GSMA [1].

While I think the "send money home" value proposition story in Kenya was crucial, it doesn't really explain why mobile money works (or doesn't work) as a service. This is basically all to do with massive agent networks. The business model isn't as easy to get going as people assume, and most telcos failed to pull it off. Regulation (or lack of it) was also very critical for Kenya's success.

In general mobile money is fascinating to examine though. And it's an absolute game changer in Kenya!

[1] https://www.gsma.com/sotir/

[samvher]

I think one important component to the success of M-Pesa is Safaricom's near-monopoly on the mobile telephony market. If you are not the only big player in the market it's going to be much harder to get your mobile money network running straight away because you have to think of support by other telcos and competition on pricing.

I spent some time in Kenya and M-Pesa is very practical, I used it regularly for small payments. One thing that I found a bit frustrating is the very high transaction costs - way higher than you would ever pay with regular banking. The (poor) users don't really have a choice though, so Safaricom is able to make massive profits.

[hckr_news]

Interesting thanks for sharing that link. Slightly unrelated but what are some potential opportunities for business in Kenya for those living abroad but want to return?

[JuanTono]

M-Pesa is a great project. Back in 2016 my team and I tried to replicate M-Pesa in Mexico for bank the unbanked people in rural areas, financial assistance and give them a type of basic income. Only Cisco México and Susie Wee supported us, the government wasn't interested in implementing that.

Here is a short description of the project:https://mundocontact.com/dinero-movil-ganador-del-solutions-...

[GreeniFi]

Hi Juan, I was part of a team which built a mobile money (MPesa) only microfinance bank in Kenya. I now live in Mex (for family reasons). I’d love to chat to exchange experiences and what I’m working on now, which is related.

[owenmarshall]

Money transfer systems in developing countries are fascinating. Hawala[1] is one notable example – a remarkably fast, efficient and cost-effective system based on interpersonal relationships and trust.

[1]https://en.wikipedia.org/wiki/Hawala

[pradn]

Hawala is a pretty common way for people to send large sums of money between the USA and India. Amounts on the order of $100,000+ are not unheard of.

[hckr_news]

Absolutely. As one of the poorest countries in the world, remittances are crucial to Somalia’s economy.

[yboris]

The top-rated charity[1] Give Directly [2] uses M-Pesa to do unconditional cash transfers to some of the world's poorest families! Without this technology, the challenges of cash distribution would be very high.

[1] https://www.givewell.org/charities/top-charities [2] https://www.givedirectly.org/

[dang]

Links for the curious: https://news.ycombinator.com/item?id=22115542

2015: https://news.ycombinator.com/item?id=10612723

https://news.ycombinator.com/item?id=10458071

2014: https://news.ycombinator.com/item?id=7249492

2013: https://news.ycombinator.com/item?id=6035054

[prisonguard]

i live in kenya and frequently use m-pesa, this service is too expensive, a charge for both sending and receiving money just won't fly, sadly it's backed by powers that be who constantly stiffle innovation in the payment space,

kenya is still in dark ages in fairness and plurality of payment systems.

[coderintherye]

I think, while your view point is valid, it ignores that, at the time, M-PESA was a huge leap forward. They were doing mobile money before pretty much anyone. Now, yes, Safaricom has monopolized it and is falling behind and overcharging, but that doesn't negate the initial innovation having been world-changing.

[joseph]

When I visited Kenya in 2012, I was fascinated to discover that this existed, and had been going strong for years already. Meanwhile in the US, money transfer seems dated by comparison. Crypto offers some hope, but the ecosystem is so fragmented and dominated by shady people.

[solotronics]

If you look at Google search trends for the last year African countries have been the top searchers for "bitcoin". This is something people in the West usually don't understand, having a secure money that's accessible with only a phone.

[GreeniFi]

Thanks to the poster, thanks to the writer. Super interesting.