The success of M-Pesa service Essay

M-Pesa success has been mainly due to increase in number of people using mobile phones.
Chapter 5
5.0 How well M-Pesa operates
M-Pesa Equitel Airtel Orange Money
Agents 79% 8% 5% 2%
Customers 99% 5% 9% 1%
Contribution to national GDP 80% 6% 4% 2%
Profits 25% 2% 1.5% 1%
It has enabled users to transfer and receive money from each and make direct payments to business and other service providers. This has led to reduction of corruption by reducing the use of cash in hand. In the process it has empowered people as it has led to start-up of so many small businesses. Years after its launch in 2007, it has transformed Kenya's economy. It has changed the country's banking and telecom sectors, by providing financial inclusion to about 20 million Kenyans. It has been able to tap into the low- income earners population. Data indicates that the percentage of people living below 1.25 dollar using M-Pesa has increased from less than 20 percent in 2008 to 72 percent in 2011, (Morawczynski, 2011).
People with no access to financial institutions like banks have benefitted greatly from the financial support offered by M-Pesa, (Porteous, 2011). For example, the Pay Bill service allows M-Pesa users to pay for goods and services and more importantly to fundraise for services such as medical bills, education and other welfare activities to assist people with problems, (Porteous, 2011). M-Pesa has also empowered business creation-many small companies rely on M-Pesa for nearly all transactions, or provide a service that is a derivative of the platform itself, (Morawczynski, 2011). Moreover M-Pesa caters for all types of person-to person payments including paying of employee's salaries, paying bills such as water and electricity bills, buying goods online and paying school fees.
M-Pesa is time efficient in the sense that people do not have to queue for long as is the case with most Banks and ATMs. This is because M-Pesa has over 20,000 shop outlets and over 40,000 agents who serve customers. Its loan and savings products enable people to save even as little as a dollar. This has enabled the poor people to also have savings. Customers are only charged when they do something with money, therefore charges are incurred only for sending and withdrawing money. There are no charges which are incurred for depositing money. Non-subscribers are not charged for withdrawing money while the sender is more for sending money to non-subscriber this is so that they can encourage the non-subscriber to register to M-Pesa.
Chapter 6
6.0 Management agenda
M-Pesa failed to do well in countries like South Africa and India because in these countries more people have bank accounts. Also banks are everywhere even in rural areas, this is the same also for ATMs. For M-Pesa succeed in these countries it should partner with banks, medical institutions and other institutions. In developed countries the challenge is not access to banks but the ability to use various technologies to support people to send and receive money.