How Mobile Money has Taken Root in the Kenyan Market  

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Mobile money is an electronic money service that allows users to store, send, and receive money quickly, securely, and as a plus, with no internet. There are many mobile money providers in Kenya, but the most popular is  M-Pesa.

What is M-Pesa?

M-Pesa is a short form of Mobile Money; the ‘M’ in M-Pesa stands for mobile, while ‘Pesa’ is a Swahili  word for money.

M-Pesa service  and popularity is made possible by thousands of agents spread over the country who make withdrawals and deposits accessible to millions of users. Since it’s inception, M-Pesa growth and success is a constant reminder of the untapped potential of African technological market.

History of Mobile Money in Kenya

M-Pesa was piloted in 2005 and officially launched in March 2007 by Safaricom, a telecommunications company owned by Vodaphone. Initially, it was meant for microfinance borrowers’ receipt and repayment of loans using the Safaricom network of airtime resellers.According to the Central Bank-Kenya, as of August 2021, there are 68.09 million registered mobile accounts in Kenya and 304,822  active agents. Recently, the total transaction value of M-Pesa grew to KShs 22.04 Trillion while the volume of transactions rose to 11.68Billion.

Currently, M-Pesa operates in Kenya, Tanzania, South Africa, Afghanistan, Lesotho, DRC, Ghana, Mozambique, Egypt, Ethiopia, India, and Romania.

Reasons Why Mobile Money is Popular

Using mobile money is very simple. For instance, to have an electronic account, a person only needs to purchase a SIM card and a phone and register it with a retail agent using a national identity card. It is also quick since transactions take place in seconds. And it is very reliable, unlike traditional banking which involves standing in long queues before accessing your money.

Where is M-Pesa used?

Over the years, Safaricom has expanded the services offered by mobile money. Apart from receiving and sending money, an M-Pesa user can;

  1. Pay utility bills such as water and electricity.
  2. Pay for services or purchase goods using a pay bill or a till number.
  3. Get credit through fuliza, which allows customers to complete their transactions when insufficient funds are in their M-Pesa account.
  4. Save and take loans through their M-Shwari account.
  5. Online Banking- Many banks in Kenya have integrated mobile money into their services. Customers can therefore transfer money from their bank accounts to their mobile wallets or to other users.


Safaricom has partnered with many money transfer services to ensure no costs when users receive money from the US, UK, Europe, and UAE. These partners are:

  • Skrill
  • SkyForex
  • Western Union
  • WorldRemit
  • XendPay
  • Xpress Money
  • MoneyGram Azimo
  • Transfer Galaxy
  • Vodacom Tanzania
  • MTN Rwanda
  • MTN Uganda
  • Dahabshiil

It has also linked up with Paypal and hopefully soon with Amazon as there are talks about integrating M-Pesa as a payment option.

Challenges Facing Mobile Money in Kenya

Despite the apparent success story, mobile money charges are constantly increasing, preventing some customers from using the service. It is also worth noting that higher amounts of money attract higher charges.

There are also some security concerns- Cons who rob people of their money on this platform have increased over the years. For example, they pretend to offer jobs to desperate unemployed youth in exchange for ‘something small’ and disappear once they receive the money. Others collect parents’ information from schools and call them claiming their children require supplies or urgent medical attention.

Apart from the cons, there have been blatant robberies of agents’ shops providing mobile money services. These shops move high volumes of cash and expose criminals looking to make a quick buck. It is sad to note that some agents have lost their lives in the process.

There are risks of sending money to the wrong number. Millions are lost every day when users input the wrong phone numbers when sending money through M-Pesa. However, Safaricom has introduced the reversal service, and just recently, a man was found guilty of withdrawing and spending money sent erroneously.

The Future and Beyond.

It will be interesting to see what mobile money providers come up with to improve their services and get an edge over their competitors. Hopefully, we will see broader coverage, better security systems, and more integrated services at a cheaper cost.












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