Cashless society
Pastor Dale Morgan
*Cashless society*
Breakthrough mobile phone money transfer service wows Kenyans
Noel Mwakugu
BBC News, Nairobi
Clients are flocking to the new service
The lives of many Kenyans are being transformed by an innovative mobile
phone money transfer service.
The free account - M-Pesa - is offered by Safaricom Kenya, a leading
mobile phone service operator and is a technological breakthrough say
the operators.
It enables subscribers to send large volumes of money in an instant
transaction.
The service, which is in the process of rolling out to most major towns
in Kenya, is also cheap - costing on average about $1 to send or receive
money.
Just a month after launch, M-Pesa is already providing cut throat
competition to existing money transfer agencies, notably the
government-owned Postal Corporation, a market leader with a massive
network of branches.
Statistics at the Communication Commission of Kenya, indicate that there
are more that 6.5 million mobile phone subscribers countrywide.
Safaricom has about 5 million customers, and most are expected to be
hooked up to the new service in the coming months.
The Mobile Commerce Project manager at Vodafone, Susie Lonie, who was in
charge of the M-pesa project, says they are now undertaking a pilot in
Afghanistan before it can be formally launched there too.
Huge response
Kimani Ngaruiya, a representative of Sasanet, an agency conducting the
transfer business on behalf the mobile phone operator says the response
has been overwhelming.
He said: "The roll out has not been completed in Nairobi but the number
of people calling at our shops is very high."
Agency
The new service is being aggressively marketed
Sasanet has even introduced a fleet of vans, located at markets, housing
estates and busy bus stops in the city to reach more subscribers.
A sim card is needed to operate an M-Pesa account. This has a money
transfer menu that allows account funds to be managed.
"Its simple," said Shella Njeri Thiong'o, an agent at a transfer shop in
the central business district.
"You just deposit cash to one of our shop and we issue you with e-value
cash voucher on your M-pesa account.
"The vouchers can be cashed at any appointed agent across the country."
Rural poverty
Many people applying to become M-Pesa account holders are however
concerned over the safety of the whole process, Ms Thiong'o said.
Within two weeks of the launch over ten thousand account holders were
registered and more than $100,000 had been transferred
Micheal Joseph
Safaricom chief executive
"This should not be a worry. Security pin codes are provided and no-one
else can access the voucher in an individuals account," she said.
Samson Tela, one of the many curious mobile phone users who made his way
to the transfer agency, said as much as he was sceptical about the new
cash transfer service, it might prove valuable.
Most Kenyans living in rural areas exist in abject poverty, most on less
than a dollar a day, and have to rely financially on relatives in the
cities.
Mr Tela works in Nairobi, but his brothers live in Luanda in the west of
the country.
He said: "My brothers in a rural area depend on me a lot, so each month
I have to send some money home."
On most occasions, he sends money using postal money orders, but this
can be a slow process, which causes him a great deal of inconvenience.
"Sometimes when I have to send money urgently, I just package in an
envelope as a letter and give it to bus drivers to deliver," he said.
"I have lost cash this way in past but I cannot claim a refund as it's
just a gamble."
Teething troubles
The new M-Pesa service proved to be an instant relief for him when he
sent $20 to his brother who received the cash immediately from an agent
in western Kenya.
Van
A fleet of vans is trying to reach more potential customers
Sasanet's Karanja Ngaruiya admits there have been a few hiccups as some
of the appointed agents in other parts of Kenya have not set up their
offices.
"A couple of times some people have sent money to places where the
appointed agents have not been fully established," he said.
"But the money has not been lost - the clients were able to get it back."
Micheal Joseph, Safaricom's chief executive, said the idea first started
as a trial money transfer service in the micro-finance industry two
years ago.
The success of the trial project drove the company to explore moving
money among individuals across the country.
"Within two weeks of the launch over 10,000 account holders were
registered and more than $100,000 had been transferred," Mr Joseph said.
International transfer
Plans are under way to test this on an international stage in an effort
to tap the large amounts of money transferred to Kenya by its citizens
spread throughout the world, Mr Joseph revealed.
Statistics show $93bn in remittances is sent by migrants overseas to
Africa each year and M-Pesa hopes to tap into this transfer of funds.
Mr Joseph said there were still issues to be addressed, such as currency
exchange rates, and money laundering laws.
"Once this is satisfactory the service will begin," he said.
Safaricom, which recently joined forces with other mobile phone service
operators in Uganda and Tanzania to expand its coverage in the region,
is also looking at expanding the service East Africa to enjoy the service.