Three Keys to M-PESA’s Success: Branding, Channel Management and Pricing
University of Oxford; Tufts University
affiliation not provided to SSRN
July 1, 2010
Journal of Payments Strategy and Systems, Vol. 4, No. 4, December 2010
M-PESA, a mobile-phone based electronic payments system, has been adopted by 8.5 million Kenyans in the relatively short span of 2½ years. Surveys of users show it is a highly valued service, and Safaricom continues to expand the range of applications it can be used for. This paper explores how Safaricom, the mobile operator that commercializes M-PESA, managed to create enough traction with both customers and retail stores, building trust and overcoming the adverse network effects that afflict new payments systems. We focus on three key aspects of M-PESA’s success: (i) creating awareness and building trust through branding; (ii) creating a consistent user experience while building an extensive channel of retail agents offering cash in/cash out services; and (iii) a customer pricing and agent commission structure that focus on key drivers of customer willingness to pay and incentivized early adoption.
Number of Pages in PDF File: 19
Keywords: mobile banking, electronic payments, micro-savings, microfinanceworking papers series
Date posted: April 21, 2010 ; Last revised: March 14, 2011
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