Business Daily (Nairobi)
Morris Aron
3 August 2007
Mobile phone service provider Safaricom has launched an international version of its trend-setting electronic money transfer service, M-Pesa.
The service, to be delivered in partnership with Vodafone Plc - the UK telecoms giant with a 40 per cent shareholding in Safaricom, marks the entry of Kenya's top mobile phone firm into the remittances transmission business whose value was estimated at Sh76 billion last year.
Ms Paulin Vaghaun, the head of M-Pesa at Safaricom, told Business Daily that the company had decided to launch the international service to cash in on the growing amount of financial transfers between the two countries.
"Kenyans in the UK deserve an efficient and speedy means of sending money home and this is what we are offering," she said. The pilot phase of the project will last three months before the official roll-out of the service.
"We would be testing security and efficiency with the hope of launching the service fully in the next couple of months," said Ms Vaghaun. Safaricom said it would extend the M-Pesa service to other major sources of Kenya bound remittances such as the United States, France and Germany should the UK service prove successful.
A recent International Monetary Fund report ranked Kenya as the second biggest recipient of foreign remittances - a feat it attributed to the growth of investment opportunities that have attracted the attention of the diaspora.
Vodafone is expected to launch the pilot phase of the service this month with the official roll out planned before end of the year. M-Pesa will allow registered users in the UK to send money to a mobile phone in Kenya using their UK bank debit card on a secure website.
Local recipients of the money will be alerted via an SMS, assessed by agents in Nairobi, registered for the service before being allowed to withdraw the amounts sent.
Safaricom's decision to extend M-Pesa out Kenyan borders is expected to kick off fierce competition against seasoned players in the international money transfer market such as Western Union, Postapay and Moneygram.
The battle is expected on the pricing front with the M-Pesa charges said to be nearly half what the seasoned players charge to transmit equal amounts of money. M-Pesa, which was launched three months ago, allows one with an appropriate SIM card to transfer money to another person in designated areas of the country.
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