Mobile cash transfer platform makes life easier for Kenyans

When Safaricom’s M-Pesa platform was launched in 2007, it completely changed the way Kenyans transacted financially especially when it came to transferring money.

People no longer used matatus or other transport means to drop an envelope at the nearest shopping centre when they wanted to send money to their loved ones back in the village.

But with the advent of the M-Pesa, all this changed. Consumers were, however, required to go to the bank or to an automated teller machine, withdraw money, and deposit it with an M-Pesa agent, transfer it to the other person and then the other person would go to an agent and withdraw the money.

Over the years, this has changed as commercial banks have linked up with this mobile phone money transfer platform, making it possible for consumers to deposit funds directly from their bank accounts to the M-Pesa or other platform, then transfer it directly to a recipient or perform other transactions.

Most of the mobile money platform providers which have since launched similar products have also added new features to the platforms making it possible for individuals to perform everyday money transactions such as paying bills, school fees, insurance premiums, salaries and buying groceries and airtime among many others.

What this means for the individual is that you no longer have to spend valuable time queuing in a bank or anywhere else to get your money or pay your bills respectively.


As a result, the amount of money being moved between individuals and businesses has steadily gone up to the extent that between January and September this year, a whopping Sh1.117 trillion had been transferred in this manner locally translating into a 34.76 per cent from Sh829.62 billion transferred over the first nine months of last year.

Moses Kimani, a 25-year-old businessman in Nairobi, who deals in software development, is one of the 19.71 million customers who, according to the Central Bank of Kenya, are using mobile money platforms to perform all his business transactions.

“I use my phone maybe three or four times a week to transact my business. I use it to buy things like templates, software and transfer money between accounts. This mode of transaction is not only secure but also instant,” he says.

Kimani says that he started using his bank’s mobile platform that is connected to the M-Pesa platform about one a half years ago and the number of times that he uses it has increased.

Airtel also has its own money transfer platform dubbed Airtel Money, Yu has one called yuCash, Orange has one called Orange Money while other entrants like Tangaza, Mobikash and many others are connected to banking platforms, with most of the banks having a platform that is linked to the mobile money transfer operators.

Using a mobile phone to transact also helps save on time because one does not need to spend time on a queue and it also leaves a trail that allows you to monitor how you use your money.

Bob Collymore, chief executive officer Safaricom, last week told the Business Daily that 25 banks have so far linked up with the M-Pesa platform and more banks are offering mobile banking which interfaces with money transfer services all of which have contributed to greater penetration and reach of the service.

Mark Adoyo, KCB Group senior manager money transfer services, explains that these platforms which have been integrated with M-Pesa have increased the value of transactions particularly because in the past, one had to go to a bank or ATM to withdraw funds, then look for an M-Pesa agent to deposit the funds but now all these money transfers can be done directly from one point and without leaving your seat.

“Integrating with M-Pesa has increased transfers from bank accounts to customers making it easier for them to transfer money directly from their accounts to M-Pesa and vice versa,” says Adoyo.

The largest lenders KCB Group, Equity, Barclays, Cooperative, Standard Chartered, CfC Stanbic and others such as NIC, Diamond Trust, National Bank among others have made it easy for their customers to access their accounts and perform transactions through their mobile phones.

Anne Mungai, who runs a clothes shop in a Mall on the outskirts of the city says she can’t imagine how she would survive without the facility.”

“These days, I pay for almost everything through my phone. The good news is that I’m able to access my bank account from my shop or home and keep track of my balance at all times. Then I also use the facility to pay all my bills since all I need to know is the pay bill number of the outlet I’m dealing with. In some outlet, you can shop then pay the bill directly using M-Pesa. I can’t tell you how easy this has made my life because I no longer need to carry money around with me,” she adds.


According to Anne, this platform makes it easy and secure to send money especially to parents in the village.

Not only is the method secure, but other people do not need to know how much is in the mobile phone account because her parents only withdraw what they need every time they need money.

However, it is not just mobile transactions that are on an upward trend as Kenyans have also picked up on shopping with their debit cards and Central Banks data shows that the value of transactions done through point of sale (POS) machines which are located at retail shopping places is also trending up.

Habil Olaka, chief executive officer of the Kenya Bankers Association said even though traditionally plastic money was treated as a status symbol, it is now accepted by ordinary customers as a means of conducting transactions.

“This uptake of technology by large retails supermarket chains and retailers that have incorporated cards either as loyalty or branded cards for their shopping customers has helped greatly,” said Olaka.

According the CBK data, the number of POS machines stood at 17,702 as at the end of September compared to 16,209 as at the end of September 2011.

The growth in plastic money transactions and mobile money transfers means that the society is beginning to accept the use of alternative methods of payment which are also more efficient, fast and secure.

It is much easier to carry a large amount of money in a virtual account using a phone than in one’s pockets.

James Mwangi chief executive officer of Equity Bank, during an investor briefing at the beginning of this month disclosed that mobile Equity Bank’s mobile banking customers had increased to 1.99 million as at the end of September this year from 417,194 in January last year and that use of the banks platform had increased.

In the month of September alone, consumers countrywide transferred a total of Sh130.69 billion according to the CBK data and at Safaricom’s investors briefing early this month the telecommunications provider disclosed that customers using its platform transferred Sh80 billion in transactions during that one month.

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