Mobile money
March 20th, 2007

The Guardian reports “in what is being touted as a world first, Kenya’s biggest mobile operator is allowing subscribers to send cash to other phone users by SMS.Known as M-Pesa,or mobile money,the service is expected to revolutionise banking in a country where more than 80% of people are excluded from the formal financial sector.Apart from transferring cash – a service much in demand among urban Kenyans supporting relatives in rural areas – customers of the Safaricom network will be able to keep up to 50,000 shillings (£370) in a “virtual account” on their handsets”.Further,”M-Pesa’s is simple.There is no need for a new handset or SIM card. To send money you hand over the cash to a registered agent – typically a retailer – who credits your virtual account.You then send between 100 shillings (74p) and 35,000 shillings (£259) via text message to the desired recipient – even someone on a different mobile network – who cashes it at an agent by entering a secret code and showing ID.A commission of up to 170 shillings (£1.25) is paid by the recipient but it compares favourably with fees levied by the major banks,whose services are too expensive for most of the population.Mobile phone growth in Kenya, as in most of Africa, has been remarkable, even among the rural poor.In June 1999 Kenya had 15,000 mobile subscribers.Today it has nearly 8 million out of a population of 35 million”.

Kenya sets world first with money transfers by mobile

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