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Mobile Payments Go Viral: M-PESA in Kenya

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  • Mas, Ignacio

    ()
    (Independent Consultant)

  • Radcliffe, Daniel

    ()
    (Bill & Melinda Gates Foundation)

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    Abstract

    M-PESA is a small-value electronic payment and store of value system that is accessible from ordinary mobile phones. It has seen exceptional growth since its introduction by mobile phone operator Safaricom in Kenya in March 2007: it has already been adopted by 14 million customers (corresponding to 68 percent of Kenya’s adult population) and processes more transactions domestically than Western Union does globally. M-PESA’s market success can be interpreted as the interplay of three sets of factors: (i) preexisting country conditions that made Kenya a conducive environment for a successful mobile money deployment; (ii) a clever service design that facilitated rapid adoption and early capturing of network effects; and (iii) a business execution strategy that helped M-PESA rapidly reach a critical mass of customers, thereby avoiding the adverse chicken-and-egg (two-sided market) problems that afflict new payment systems.

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    Bibliographic Info

    Article provided by Capco Institute in its journal Journal of Financial Transformation.

    Volume (Year): 32 (2011)
    Issue (Month): ()
    Pages: 169-182

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    Handle: RePEc:ris:jofitr:1516

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    Related research

    Keywords: mobile; mobile payments; mobile money; Kenya; M-PESA; financial inclusion;

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    Cited by:
    1. Asongu Simplice, 2013. "The impact of mobile phone penetration on African inequality," Working Papers 13/021, African Governance and Development Institute..
    2. Asongu Simplice, 2013. "Mobile banking and mobile phone penetration: which is more pro-poor in Africa?," Working Papers 13/033, African Governance and Development Institute..
    3. Simplice A, Asongu, 2012. "How has Mobile Phone Penetration Stimulated Financial Development in Africa?," MPRA Paper 41198, University Library of Munich, Germany.

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