Mobile Payments Go Viral: M-PESA in Kenya
University of Oxford; Tufts University
Bill and Melinda Gates Foundation
March 1, 2010
Capco Institute’s Journal of Financial Transformation, No. 32, p. 169, August 2011
YES AFRICA CAN: SUCCESS STORIES FROM A DYNAMIC CONTINENT, P. Chuhan-Pole and M. Angwafo, eds., World Bank, August 2011
M-Pesa is a Small-Value Electronic Payment and Store of Value System that is Accessible from Ordinary Mobile Phones. It Has Seen Exceptional Growth Since its Introduction by Mobile Phone Operator Safaricom in Kenya in March 2007: It Has Already Been Adopted by 9 Million Customers (Corresponding to 40% OKenya's Adult Population) and Processes More Transactions Domestically than Western Union Does Globally. M-Pesa's Market Success Can Be Interpreted as the Interplay of Three Sets of Factors: (I) Pre-Existing Country Conditions that Made Kenya a Conducive Environment for a Successful Mobile Money Deployment; (Ii) a Clever Service Design that Facilitated Rapid Adoption and Early Capturing of Network Effects; and (Iii) a Business Execution Strategy that Helped M-Pesa Rapidly Reach a Critical Mass of Customers, Thereby Avoiding the Adverse Chicken-and-Egg (Two-Sided Market) Problems that Afflict New Payment Systems.
Number of Pages in PDF File: 15
Keywords: mobile banking, e-payments, microfinanceAccepted Paper Series
Date posted: April 21, 2010 ; Last revised: September 20, 2011
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