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Three Keys to M-PESA’s Success: Branding, Channel Management and Pricing

Journal of Payments Strategy and Systems, Vol. 4, No. 4, December 2010

Posted: 21 Apr 2010 Last revised: 2 Oct 2017

Ignacio Mas

Tufts University

Amolo Ng'weno

affiliation not provided to SSRN

Date Written: July 1, 2010

Abstract

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.

Keywords: mobile banking, electronic payments, micro-savings, microfinance

Suggested Citation

Mas, Ignacio and Ng'weno, Amolo, Three Keys to M-PESA’s Success: Branding, Channel Management and Pricing (July 1, 2010). Journal of Payments Strategy and Systems, Vol. 4, No. 4, December 2010. Available at SSRN: https://ssrn.com/abstract=1593387 or http://dx.doi.org/10.2139/ssrn.1593387

Ignacio Mas (Contact Author)

Tufts University ( email )

Medford, MA 02155
United States

Amolo Ng'weno

affiliation not provided to SSRN ( email )

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